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Sherwin-Williams Reports Strong 2015

Friday, January 29, 2016

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Sherwin-Williams' new president and CEO delivered a "gratifying" full-year and fourth quarter earnings report released Thursday (Jan. 28).

The Cleveland-based coatings giant said net income per share increased 27.1 percent to reach $11.16 per share for 2015. Sales also were up, reaching $11.34 billion—a 1.9 percent increase.

For the last quarter of its fiscal year—which ended Dec. 31—net sales were $2.60 billion, a 4.1 percent increase compared to the same time last year, according to the company’s financial report. For the quarter, net income per common share increased $2.12 per share compared to $1.37 per share in 2014.

John Morikis
Photos: Sherwin-Williams

The Sherwin-Williams Company President and CEO John G. Morikis says the full-year results are "gratifying."

“It is gratifying to report another year of record performance in sales, net income, which surpassed $1.0 billion for the first time, earnings per share, earnings before interest, taxes, depreciation and amortization and net operating cash,” commented John G. Morikis, president and CEO of Sherwin-Williams.

The company reported the following business segment results.

Stores Ring Up

“Over the past year, our Paint Stores Group grew architectural sales volume across every end market segment and delivered positive operating results,” Morikis noted.

The business unit posted net sales of $7.21 billion for the year, an increase of 5.2 percent over the prior year. For the quarter, net sales increased 5.9 percent to reach $1.68 billion.


Sherwin-Williams rolled out ColorSnap, a new color selection tool in 2015.

Net sales from stores open for more than 12 calendar months increased 4.2 percent in the year and 5.1 percent the quarter of last year’s comparable periods.

Paint Stores Group segment profit increased to $1.43 billion in the year from $1.20 billion last year and increased to $316.1 million in the quarter from $247.5 million last year due primarily to higher paint sales volume.

Morikis said the company added 83 net new stores, finishing the year with a fleet of 4,086 stores in operation.

Consumer Group Gains

The company’s Consumer Group posted net sales of $1.58 billion, an 11.1 percent increase over the prior year. For the quarter the unit posted sales of $314.6 million, a 13.6 percent increase from the same period a year before.

A key factor for the increase was the sales of HGTV Home by Sherwin-Williams paint to the Lowe’s home improvement stores, the company noted.

Segment profit rose to $308.8 million in the year from $252.9 million last year. For the quarter, the unit saw a profit of $50.9 million, up from $30.3 million seen in the fourth quarter of 2014. The profit increase was driven by improved operating efficiencies.

Global Finishes Mixed

Meanwhile, the company’s Global Finishes Group posted a sales decrease of 7.9 percent for the year, to reach $1.92 billion.  In the fourth quarter, the company saw a decrease of 9.5 percent to $454.8 million compared to the same period a year ago.

Unfavorable currency translation took a toll, decreasing net sales 7.5 percent and 7.1 percent in the year and quarter, respectively.

Sherwin-Williams said profit for the segment was essentially flat—$201.9 million for 2015, compared to $201.1 million last year—due primarily to decreasing raw material costs and good cost control partially offset by unfavorable currency translation rate changes and a gain on an early termination of a customer agreement in the third quarter 2014.

Industrial applications

Sherwin-Williams' Protective and Marine Coatings business released two ulta-high-solids urethane floor coatings for commercial and industrial projects in 2015.

For the quarter, however, the Global Finishes Group saw profits rise to $50.6 million from $39 million last year.

Foreign currency translation rate changes decreased segment profit $26.5 million in the year and $4.9 million in the quarter.

Latin America Group Takes Hit

The company’s Latin America Coatings Group saw the largest decreases in sales and profit.

“The [segment] continues to manage through the negative effects of currency devaluation and weak end market demand in some geographies by raising selling prices and good cost control,” according to Morikis.

The segment’s net sales were $631.0 million for the year, a dip of 18.2 percent. For the quarter, sales were $158.7 million, a decrease of 23.5 percent from the same year-ago period.

Profit for the Latin America Coatings Group was $18.5 million compared to $40.5 million posted last year. The fourth quarter profit was $2.8 million, down from $13.0 million last year.


In a forecast for its first quarter of 2016, Morikis said the company anticipates a sales increase in the “low single-digit percentage” range compared to the first quarter of 2015.

He forecast net income per share for the first quarter of $1.50 to $1.65 per share, compared to $1.38 per share in 2015.

For its full-year 2016, the company is anticipating a sales increase in the “low single-digit percentage range.” The forecast for net income was raised to a range of $12.20 to $12.40 per share, up from $11.16 per share earned in 2015.


Tagged categories: Asia Pacific; Business matters; Coatings manufacturers; Earnings reports; Economy; EMEA (Europe, Middle East and Africa); Finance; Latin America; North America; Program/Project Management; Sherwin-Williams

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