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Sherwin-Williams Releases Q4, 2019 Numbers

Friday, January 31, 2020

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Global coatings firm The Sherwin-Williams Company (Cleveland) released its fourth-quarter and year-end earnings report for 2019 on Thursday (Jan. 30) announcing an increase in net sales for the year by 2.1% for a record $17.9 billion.

The company attributed the gain to higher paint sales volume in The Americas Group as well as selling price increases. On the quarter, consolidated net sales increased $50.2 million, or 1.2%, to $4.11 billion.

Diluted net income per share in the year increased to $16.49 per share from $11.67 per share for 2018.

Report

“Sherwin-Williams delivered record results in 2019, driven by above-market growth in our North American paint stores and margin improvement in all of our segments,” said John G. Morikis, Chairman and Chief Executive Officer at Sherwin.

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

Global coatings firm The Sherwin-Williams Company (Cleveland) released its fourth-quarter and year-end earnings report for 2019 on Thursday (Jan. 30) announcing an increase in net sales for the year by 2.1% for a record $17.9 billion.

“Sales grew to $17.90 billion as the strength of our stores, platform and growth with our largest North American retail partners more than offset softness in certain industrial end markets and choppiness in our international businesses. Gross margin expanded to 44.9% as our pricing initiatives enabled us to gain ground on the raw material inflation we have experienced since 2017. Adjusted EBITDA grew 8.3% to more than $3.0 billion, and adjusted earnings per share increased 14% to $21.12, both of which are full year records. Net cash from operations was more than $2.32 billion, which enabled us to invest in organic growth initiatives, repurchase over 1.6 million shares of our common stock, reduce debt, increase our dividend 31% from the prior year and execute on selected acquisition targets.”

In the Americas Group, net sales increased 5.7% to $10.17 in the year, due to higher paint sales and selling price increases, as mentioned before. For the fourth quarter, net sales increased 4.8% to $2.36 billion. Segment profit also increased to $2.06 billion, or 20.2% of net sales, from $1.9 billion. On the quarter, profit increased to $449.4 million from $413.4 million.

Net sales in the Consumer Brands Group decreased 2.3% to $2.68 billion in the year, which the company attributes to the divestiture of the Guardsman insurance business and lower sales outside of North America. For the quarter, net sales slightly increased 0.9% to $539.4 million. Segment profit increased, however, to $373.2 million, or 13.9% of external sales, from $261.1 million last year. In the quarter, segment profit increased to $29.7 million.

Lastly, in the Performance Coatings Group, net sales decreased 2.3% to $5.05 billon in the year and also decreased 5% to $1.21 billion in the quarter. The company attributes this to softer sales outside of North America as well as unfavorable currency translation rate changes. Segment profit also decreased for both the year and the quarter. On the year, profit decreased $73 million to $379.1 million compared to $452.1 million in the prior year, primarily due to non-cash impairment charges related to recently acquired trademarks, the company noted. For the quarter, segment loss was at $7.4 million.

Despite the last group’s performance, Morikis had positive comments on the 2019 year and Q4 earnings.

“Our global team delivered significant accomplishments in each of our operating segments,” he said.

“In The Americas Group, we reached the milestone of more than $10 billion in annual sales. In the Consumer Brands Group, we completed a very successful first full year of our exclusive partnership with Lowes. And in the Performance Coatings Group, we continued to execute on integration efforts that we expect will accelerate growth and margin expansion over the long term.

“Turning to our 2020 outlook, we currently see a similar environment to last year, with North American architectural demand remaining solid and industrial demand remaining variable by geography and end market. We will continue to focus on providing our customers with solutions based on innovation, value-added service and differentiated distribution.”

   

Tagged categories: Asia Pacific; Business matters; Earnings reports; EMEA (Europe, Middle East and Africa); Finance; Good Technical Practice; Latin America; North America; Sherwin-Williams; Z-Continents

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