Sherwin-Williams Beats and Raises Guidance

The Federal Reserve begins its two-day meeting today. The policy statement will come out tomorrow afternoon. We have two Buy List earnings reports today. AFLAC (AFL) reports after the closing bell and Sherwin-Williams reported earlier today.

For Q2, Sherwin-Williams (SHW) earned $7.10 per share. That easily beat Wall Street’s estimate of $5.85 per share. Sales fell 5.6% to $4.60 billion.

For Q2, diluted net income increased to $6.48 per share. That’s up from $5.03 per share a year ago. However, there’s also 62 cents for “acquisition-related amortization expense.” That brings us up to $7.10 per share.

CEO John G. Morikis said:

While sales were down by a mid-single digit percentage overall, favorable customer and product mix, lower input costs and strong spending controls enabled us to deliver significantly improved performance compared to last year’s second quarter. Gross margin expanded 330 basis points to 48%, and adjusted earnings per share increased 8.1% to $7.10 per share. Adjusted EBITDA grew 6.2% to $979.0 million, or 21.3% of sales, compared to 18.9% in second quarter last year.

The best news is that Sherwin is increasing its full-year range to $19.21 – $20.71 per share which includes $2.54 per share in acquisition-related amortization expense. That previous range was $16.46 per share to $18.46 per share, including $2.54 per share acquisition-related amortization expense. For Q3, the company sees net sales up or down in the low single digits.

Posted by on July 28th, 2020 at 8:54 am


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