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Sherwin-Williams (SHW) Q1 Earnings and Revenues Beat Estimates
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The Sherwin-Williams Company (SHW - Free Report) recorded first-quarter 2023 earnings of $1.84 per share, reflecting a rise of 30.5% from the year-ago quarter's $1.41.
SHW posted adjusted earnings of $2.04 per share, up 26.7% from the year-ago quarter figure of $1.61. It surpassed the Zacks Consensus Estimate of $1.84.
The company’s net sales in the first quarter were $5,442.4 million, which surpassed the Zacks Consensus Estimate of $5,147.6 million. Net sales increased 8.9% from $4,998.7 million reported in the prior-year quarter. The upside was driven by higher selling prices in all segments and increased architectural sales volumes in the Paint Stores Group segment, partly mitigated by lower sales volumes in the company’s Consumer Brands Group and Performance Coatings Group units.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
Paint Stores Group: Net sales from this segment were $2,859.1 million in the first quarter, up 14.8% from the year-ago quarter. The increase in sales was primarily due to higher selling prices and a rise in sales volume in all end markets. Profit increased as higher prices and a rise in paint sales volumes were partly offset by continued investments in long-term growth strategies and increased employee-related costs in the quarter.
Consumer Brands Group: Net sales from this segment were $872.7 million in the first quarter, up 2.4% from the year-ago quarter. The increase in sales is primarily due to selling price rise and strong growth within Latin America, partly offset by reduced sales volumes in all other regions.
Performance Coatings Group: Net sales from this segment were $1,709.8 million in the first quarter, up 3.4% from the year-ago quarter. The upside was mainly supported by higher selling prices in all end markets and incremental sales from acquisitions but was partly offset by lower sales volume in Asia and Europe. Higher selling prices offset by increased costs related to employees led to a rise in segment profits.
Financials
At the end of the first quarter, Sherwin-Williams had cash and cash equivalents of $151.4 million, down around 62% year over year. Long-term debt increased 11.6% to $9,593 million.
Sherwin-Williams generated $88.2 million in net operating cash during the quarter. The company also repurchased 1.3 million shares of its common stock during the quarter.
Outlook
SHW sees a challenging demand environment in the second half of 2023. The company is witnessing weak demand in new residential and the Consumer Brands Group DIY. On the industrial side of the business, it is seeing more pressure in North America while Europe and China are yet to fully recover.
The company expects consolidated net sales growth to be up or down a low-single-digit percentage year over year in second-quarter 2023. For full-year 2023, it envisions consolidated net sales to be down a mid-single-digit percentage to flat year over year.
Sherwin-Williams also sees earnings in the range of $6.79-$7.59 per share for full-year 2023. Adjusted earnings have been forecast in the range of $7.95-$8.65 per share for the year.
Price Performance
SHW’s shares are down 4.7% over a year compared with an 4.4% fall recorded by its industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
SHW currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Constructions space include Watsco, Inc. (WSO - Free Report) , Eagle Materials, Inc. (EXP - Free Report) and Comfort Systems USA, Inc. (FIX - Free Report)
Watsco currently carries a Zacks Rank #1 (Strong Buy). The stock has gained 16.5% in the past year. The Zacks Consensus Estimate for WSO’s current-year earnings has been revised 1.5% upward in the past 60 days It delivered a trailing four-quarter earnings surprise of 5.3% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Eagle Materials, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 29.4% for the current year. The Zacks Consensus Estimate for EXP’s current-year earnings has been revised 1.7% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 4.1%, on average. The stock has gained 16.9% over the past year.
Comfort System currently carries a Zacks Rank #1 and has a projected earnings growth rate of 20.04% for the current year. Shares of FIX have gained 54.5% in the past year. It delivered a trailing four-quarter earnings surprise of 9.9% on average.
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Sherwin-Williams (SHW) Q1 Earnings and Revenues Beat Estimates
The Sherwin-Williams Company (SHW - Free Report) recorded first-quarter 2023 earnings of $1.84 per share, reflecting a rise of 30.5% from the year-ago quarter's $1.41.
SHW posted adjusted earnings of $2.04 per share, up 26.7% from the year-ago quarter figure of $1.61. It surpassed the Zacks Consensus Estimate of $1.84.
The company’s net sales in the first quarter were $5,442.4 million, which surpassed the Zacks Consensus Estimate of $5,147.6 million. Net sales increased 8.9% from $4,998.7 million reported in the prior-year quarter. The upside was driven by higher selling prices in all segments and increased architectural sales volumes in the Paint Stores Group segment, partly mitigated by lower sales volumes in the company’s Consumer Brands Group and Performance Coatings Group units.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
The Sherwin-Williams Company price-consensus-eps-surprise-chart | The Sherwin-Williams Company Quote
Segment Highlights
Paint Stores Group: Net sales from this segment were $2,859.1 million in the first quarter, up 14.8% from the year-ago quarter. The increase in sales was primarily due to higher selling prices and a rise in sales volume in all end markets. Profit increased as higher prices and a rise in paint sales volumes were partly offset by continued investments in long-term growth strategies and increased employee-related costs in the quarter.
Consumer Brands Group: Net sales from this segment were $872.7 million in the first quarter, up 2.4% from the year-ago quarter. The increase in sales is primarily due to selling price rise and strong growth within Latin America, partly offset by reduced sales volumes in all other regions.
Performance Coatings Group: Net sales from this segment were $1,709.8 million in the first quarter, up 3.4% from the year-ago quarter. The upside was mainly supported by higher selling prices in all end markets and incremental sales from acquisitions but was partly offset by lower sales volume in Asia and Europe. Higher selling prices offset by increased costs related to employees led to a rise in segment profits.
Financials
At the end of the first quarter, Sherwin-Williams had cash and cash equivalents of $151.4 million, down around 62% year over year. Long-term debt increased 11.6% to $9,593 million.
Sherwin-Williams generated $88.2 million in net operating cash during the quarter. The company also repurchased 1.3 million shares of its common stock during the quarter.
Outlook
SHW sees a challenging demand environment in the second half of 2023. The company is witnessing weak demand in new residential and the Consumer Brands Group DIY. On the industrial side of the business, it is seeing more pressure in North America while Europe and China are yet to fully recover.
The company expects consolidated net sales growth to be up or down a low-single-digit percentage year over year in second-quarter 2023. For full-year 2023, it envisions consolidated net sales to be down a mid-single-digit percentage to flat year over year.
Sherwin-Williams also sees earnings in the range of $6.79-$7.59 per share for full-year 2023. Adjusted earnings have been forecast in the range of $7.95-$8.65 per share for the year.
Price Performance
SHW’s shares are down 4.7% over a year compared with an 4.4% fall recorded by its industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
SHW currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Constructions space include Watsco, Inc. (WSO - Free Report) , Eagle Materials, Inc. (EXP - Free Report) and Comfort Systems USA, Inc. (FIX - Free Report)
Watsco currently carries a Zacks Rank #1 (Strong Buy). The stock has gained 16.5% in the past year. The Zacks Consensus Estimate for WSO’s current-year earnings has been revised 1.5% upward in the past 60 days It delivered a trailing four-quarter earnings surprise of 5.3% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Eagle Materials, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 29.4% for the current year. The Zacks Consensus Estimate for EXP’s current-year earnings has been revised 1.7% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 4.1%, on average. The stock has gained 16.9% over the past year.
Comfort System currently carries a Zacks Rank #1 and has a projected earnings growth rate of 20.04% for the current year. Shares of FIX have gained 54.5% in the past year. It delivered a trailing four-quarter earnings surprise of 9.9% on average.