Sherwin-Williams Lowers Guidance

This morning, Sherwin-Williams (SHW) said that it’s lowering its sales and earnings estimates for Q3 and the full year.

For net sales, Sherwin sees Q3 coming in flat to down slightly. For earnings, the company expects earnings to range between $1.80 and $1.90 per share, including 20 cents for acquisition costs.

For all of 2021, Sherwin expects sales to be “up by a high single digit percentage.” Sherwin sees 2021 earnings between $7.21 to $7.41 per share. That figure includes “$0.80 per share for acquisition-related amortization expense and a loss of $0.34 per share on the Wattyl divestiture.”

CEO John G. Morikis:

“As demand remains robust across our pro architectural and industrial end markets, we continue to make investments in our strategic growth initiatives, including bringing 50 million gallons of additional architectural production capacity online over the next two quarters,” said Chairman, President and Chief Executive Officer, John G. Morikis. “At the same time, the persistent and industry-wide raw material availability constraints and pricing inflation we have previously reported have worsened, and we do not expect to see improved supply or lower raw material pricing in our fourth quarter as anticipated. As a result of these headwinds, we are narrowing our third quarter sales expectations and establishing third quarter earnings guidance. For the full year, we now expect sales to be up by a high single digit percentage and adjusted diluted net income per share guidance to be $8.45 at the midpoint of the range.

“Our suppliers are now reporting that the impacts of Hurricane Ida are more severe and will be longer lasting than initially thought. Production of several key resins, additives and solvents, expected to resume by late September, has been pushed out. We now expect raw material availability issues to negatively impact our consolidated sales by a high-single digit percentage in the fourth quarter. This follows the high-single digit impact in the third quarter we previously communicated.”

Shares of SHW initially gapped down but are now higher.

Posted by on September 29th, 2021 at 12:59 pm


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