Sherwin-Williams shares fall 3.6% on earnings, revenue miss
Investing.com | Editor Rachael Rajan
Published Apr 23, 2024 14:24
CLEVELAND - The Sherwin-Williams Company (NYSE: NYSE:SHW) reported a miss in earnings and revenue for the first quarter of 2024, with a 3.6% fall in share price following the announcement.
The company's adjusted earnings per share (EPS) came in at $2.17, which was $0.05 below the analyst estimate of $2.22. Revenue for the quarter was also below expectations, at $5.37 billion compared to the consensus estimate of $5.5 billion.
Despite the shortfall in the first quarter, Sherwin-Williams' net sales saw a slight decrease of 1.4% compared to the same quarter last year. The diluted net income per share increased by 7.1% to $1.97 per share, and adjusted diluted net income per share rose by 6.4% to $2.17 per share. The company's EBITDA for the quarter increased by 2.0% to $896.2 million or 16.7% of net sales.
The Paint Stores Group reported a modest increase in net sales of 0.5%, with same-store sales remaining approximately flat. The Consumer Brands Group experienced a 7.1% decrease in net sales, primarily due to lower sales volumes in North America and the divestiture of the China architectural business in the previous year. However, segment profit in this group surged by 63.5% due to higher fixed cost absorption and moderating raw material costs. The Performance Coatings Group saw a 1.6% decrease in net sales, though segment profit improved by 8.6%.
President and CEO Heidi G. Petz commented on the results, highlighting the company's sales within the guided range, gross margin expansion, and growth in earnings per share and EBITDA. She noted the slight increase in Paint Stores Group sales and the above-market growth in Residential Repaint, as well as improvements in the Consumer Brands Group's segment margin.
Looking ahead, Sherwin-Williams reaffirmed its full-year 2024 adjusted diluted net income per share guidance in the range of $10.85 to $11.35, which is below the analyst consensus of $11.45. The company expects second-quarter 2024 consolidated net sales to be flat to up a low-single digit percentage compared to the second quarter of 2023.
Ms. Petz remains confident in the company's strategy and its position as the painting season begins, despite uncertainties in the macroeconomic environment. She expressed optimism about the opportunities ahead and the company's commitment to delivering strong performance going forward.
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