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Sherwin-Williams Reports Steady Sales Increases

Friday, October 26, 2018

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Consolidated net sales were up in the third quarter of 2018 for The Sherwin-Williams Company (Cleveland), a 5 percent increase over the same quarter in 2017, totaling $4.73 billion. The uptick was largely attributed to higher paint sales volume in the Americas and consumer brands groups, along with selling price increases.

Diluted net income per share also saw an increase from 2017’s $3.33 per share to $3.72 per share. Each share included charges of $1.09 and $.87 from the costs associated with California litigation and acquisition. According to Sherwin, the pre-tax charge for the $136.1 million California litigation is one-third of the lead abatement fund.

Report by Segment

Sherwin also reported a 5 percent increase in net sales for the Americas group, totaling $2.67 billion for the quarter. This was largely due to higher architectural paint sales volumes across end market segments as well as selling price increases. Net sales from company stores in the U.S. and Canada increased 5.2 percent this quarter. Segment profit also increased by $52.2 million to $577.7 million.

M.O. Stevens, CC BY-SA 3.0, via Wikimedia Commons

Consolidated net sales were up in the third quarter of 2018 for The Sherwin-Williams Company (Cleveland), a 5 percent increase over the same quarter in 2017, totaling $4.73 billion. The uptick was largely attributed to higher paint sales volume in the Americas and consumer brands groups, along with selling price increases.

Consumer Brand Group net sales also experienced an uptick, increasing 6.5 percent to $770.5 million for the third quarter. A new customer program and selling price increases are responsible for the segment’s positive trend, though this was slightly offset by lower volume sales to some of the group’s retail customers.

The new revenue standard also reduced group net sales by 4.7 percent, with segment profit increasing to $83.9 million from last year’s $70.4 million due to selling price increases and reduced impacts of purchase accounting. This was offset by the increased costs of raw materials and the incremental supply chain, both of which occurred due to the demand of the new customer program.

The Performance Coating segment reported a 4.2 percent increase in net sales, totaling $1.29 billion for the quarter. The third-quarter uptick was attributed to selling price increases along with the continuation of the trend of demand in most of Sherwin’s North American businesses.  

Currency translation rate changes also decreased segment net sales by 1.1 percent. Segment profit also partook in the generally positive trend, clocking in at $104.9 million, up from 2017’s $59.6 million due to reduced impact of purchase accounting and selling price increases, also offset by the costs of raw materials. In terms of percent to net external sales, segment profit increase from 4.8 percent last year to 8.1 percent this year.

Looking Ahead

John G. Morikis, Chairman, President and Chief Executive Officer noted that in the fourth quarter, the company anticipates that consolidated net sales will increase a mid-single-digit percentage in comparison with last year’s results from the same period.

“For the full year 2018, we expect our consolidated net sales will increase by a high teen percentage, including incremental Valspar sales of $1.85 billion for the first five months of 2018, compared to the full year 2017,” Morikis noted.

   

Tagged categories: Business matters; Earnings reports; Finance; Sherwin-Williams

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