The Sherwin-Williams Company posted solid gains in sales and net income in the second quarter, led by sales to the professional market for home repainting and stronger industrial maintenance activity, the company said.
Sales for the quarter were $2.1 billion, up 10% from the second quarter of 2009, while net income rose 15%, to $181.7 million. For the first half, sales were $3.7 billion, a 6% increase from the first half of 2009, while first-half net income rose nearly 10%, to $214.3 million. In addition to stronger volumes, sales benefited from favorable currency translations, which added 1.3% to second-quarter sales and 1.9% to first-half sales, the company said. Acquisitions accounted for a sales gain of 1.9% for the quarter and 1.1% for the first half.
The company said stronger sales in its sprawling Paint Stores business segment were the result of "improving domestic architectural paint sales primarily to residential repaint contractors and improving industrial maintenance product sales." Sales for the Consumer Group segment also registered significant increases, "due primarily to improving demand at some of the segment's retail, industrial and institutional customers," the company said.
Chairman and CEO Christopher M. Connor said sales and earnings improvements were achieved despite an "uncertain" economic environment and increases in raw-material costs, as the company's business segments "continue to control costs" while implementing price increases.
Connor said the Paint Stores Group opened 13 new locations in the first half, while closing seven "redundant" locations. For the year, the Paint Stores Group is expected to open 40 to 50 new stores and slow the rate of closings of redundant store locations.
Business Segment Results
For the company's Paint Stores Group, sales rose 6.4%, to $1.2 billion for the quarter, and 1.3%, to $2.1 billion, for the first half compared to 2009. Segment profit rose to $212.0 million in the quarter from $193.5 million in 2009, and rose slightly, to $259.7, for the first half from $250.1 million in 2009.
For the Consumer Group, sales rose 11.9%, to $410.2 million, for the quarter and 7.3%, to $702.4 million, for the first half. Segment profit increased to $80.7 million in the quarter from $66.1 million in 2009, while segment profit for the first half increased to $118.2 million from $96.3 million the year before.
For the Global Finishes Group, net sales in U.S. dollars rose 18.8%, to $486.5 million, for the quarter, and for the first half increased 17.5%, to $907.6 million, compared to 2009. Sales rose primarily due to acquisitions, favorable currency translations, and higher paint-sales volume. Segment profit increased to $40.0 million from $31.2 million for the quarter, and rose to $63.0 million from $36.5 million for the first half compared to 2009.
'Cautiously Optimistic' Outlook
Connor said the company remains "cautiously optimistic about the stability of end-market demand," and thus is forecasting a sales increase in the "mid-to-high single digits" in the third quarter compared to 2009. Net income per share for the third quarter is expected to be in the range of $1.55 to $1.70, compared to $1.51 per share in 2009.
For the full year, Connor said sales are expected to post an increase in the "mid-to-high single-digit percentage" range, while net income per share for the year is forecast to be in the range of $4.12 to $4.52, compared to $3.78 per share in 2009.