CLEVELAND - The Sherwin-Williams Co. announced its financial results for the year and fourth quarter ended December 31, 2014. Compared to the same periods in 2013, consolidated net sales increased $944.0 million, or 9.3%, to $11.13 billion in the year due primarily to higher paint sales volume in the company’s Paint Stores Group and acquisitions. Consolidated net sales increased $112.4 million, or 4.6%, to $2.57 billion in the quarter due primarily to higher paint sales volume in the company’s Paint Stores Group. Acquisitions increased consolidated net sales 3.1% in the year and had no impact on sales in the quarter. Unfavorable currency translation rate changes decreased consolidated net sales 1.4% in the year and 2.3% in the quarter.
Net sales in the Paint Stores Group increased 14.2% to $6.85 billion in the year and increased 8.0% to $1.58 billion in the quarter due primarily to higher architectural paint sales volume across all end market segments. Acquisitions increased net sales 4.5% in the year. Net sales from stores open for more than 12 calendar months increased 8.8% in the year and 7.5% in the quarter over last year's comparable periods. Paint Stores Group segment profit increased to $1.20 billion in the year from $990.5 million last year due primarily to higher paint sales volume partially offset by the loss from acquisitions. Segment profit increased to $247.5 million in the quarter from $168.5 million last year due primarily to higher paint sales volume. Acquisitions had an unfavorable impact on segment profit of $32.3 million in the year. Segment profit as a percent to net sales increased in the year to 17.5% from 16.5% in 2013 and increased in the quarter to 15.6% from 11.5% last year.
Net sales of the Consumer Group increased 5.9% to $1.42 billion in the year due primarily to acquisitions and higher volume sales to most of the group's retail customers. Net sales increased 1.6% to $276.9 million in the quarter due primarily to higher volume sales to most of the group's retail customers. Acquisitions increased net sales 3.4% in the year. Segment profit increased to $252.9 million in the year from $242.1 million last year due primarily to higher volume sales and operating efficiencies. Segment profit in the quarter decreased $5.7 million to $30.3 million from $36.0 million last year due primarily to increased operating costs in the quarter in advance of the HGTV HOME® by Sherwin-Williams paint program at Lowe's. Acquisitions had no significant impact on segment profit in the year. As a percent to net external sales, segment profit decreased in the year to 17.8% from 18.0% in 2013 and decreased in the quarter to 11.0% from 13.2% last year due to increased operating costs incurred related to the paint program at Lowe's.
The Global Finishes Group's net sales stated in U.S. dollars increased 3.8% to $2.08 billion in the year and increased 1.1% to $502.4 million in the quarter due primarily to selling price increases and higher paint sales volume partially offset by unfavorable currency translation rate changes. Unfavorable currency translation rate changes decreased net sales 1.6% and 4.1% in the year and quarter, respectively. Stated in U.S. dollars, segment profit in the year increased to $201.1 million from $170.6 million last year due primarily to improved operating efficiencies, selling price increases and the $6.3 million gain on the early termination of a customer agreement in the third quarter 2014 partially offset by unfavorable currency translation rate changes. Segment profit increased in the quarter to $39.0 million from $37.7 million last year due primarily to improved operating efficiencies and selling price increases partially offset by unfavorable currency translation rate changes. Unfavorable foreign currency translation rate changes decreased segment profit $13.5 million in the year and $10.2 million in the quarter. As a percent to net external sales, segment profit was 9.7% in 12 months 2014 compared to 8.5% in 2013 and 7.8% in the quarter versus 7.6% last year.
The Latin America Coatings Group's net sales stated in U.S. dollars decreased 7.3% to $771.4 million in the year and decreased 6.7% to $207.4 million in the quarter due primarily to unfavorable currency translation rate changes partially offset by selling price increases. Unfavorable currency translation rate changes decreased net sales by 12.3% and 13.5% in the year and quarter, respectively. Stated in U.S. dollars, segment profit in the year increased to $40.5 million compared to $38.6 million last year due primarily to the Brazil tax assessments incurred in the second and third quarters 2013 and the 2014 selling price increases partially offset by unfavorable currency translation rate changes. Charges of $31.6 million were recorded for the Brazil tax assessments in the 12 months 2013. Stated in U.S. dollars, segment profit decreased to $13.0 million in the quarter from $17.9 million last year due primarily to unfavorable foreign currency translation rate changes and lower volume sales partially offset by selling price increases. Foreign currency translation rate changes reduced segment profit $15.7 million in the year and decreased segment profit $4.9 million in the quarter. As a percent to net external sales, segment profit was 5.2% in twelve months compared to 4.6% in 2013 and 6.3% in the quarter versus 8.1% in the fourth quarter last year.
The company acquired 1.60 million shares of its common stock through open market purchases in the quarter bringing its total purchased to 6.93 million shares in the year.
Commenting on the financial results, Christopher M. Connor, Chairman and Chief Executive Officer, said, "We are pleased to report another year of record performances in sales, earnings per share, and earnings before interest, taxes, depreciation and amortization, which surpassed $1.5 billion for the first time.
"Over the past year, our Paint Stores Group grew architectural sales volume across every end market segment and delivered strong operating results. We made great progress during 2014 on the integration of the U.S. and Canadian Comex stores, which performed better than expected in 2014. In December, our Consumer Group announced a new agreement to sell architectural paint under the HGTV HOME® by Sherwin-Williams brand through Lowe's stores nationwide. The Global Finishes Group improved segment profit as a percent to sales through greater operating efficiencies and good cost control. The Latin America Coatings Group minimized the impact of declining currency on its core operating margins through selling price increases and good cost control. Sales in local currency were positive in both the quarter and full year.
"We continue to generate significant cash from operations allowing us to invest in the business and return a substantial portion to our shareholders. In 2014, we generated net operating cash flow of $1.08 billion. Our working capital ratio (accounts receivable plus inventories less accounts payable to sales) at December 31, 2014 was 10.1% compared to 10.5% last year. In 2014, we added 95 net new stores passing the 4,000-store milestone, finishing the year with 4,003 stores in operation. During the year, we continued to buy our stock on the open market and increased our annual cash dividend 10% to $2.20 per common share. Our balance sheet remains flexible and is positioned well for future acquisitions and other investments in our business.
"In the first quarter of 2015, we anticipate our consolidated net sales will increase in the mid single digit percentage range compared to the first quarter of 2014. At that anticipated sales level, we estimate diluted net income per common share in the first quarter of 2015 will be in the range of $1.30 to $1.45 per share compared to $1.14 per share earned in the first quarter of 2014. For the full year 2015, we expect consolidated net sales to increase a high single digit percentage compared to full year 2014. With annual sales at that level, we have raised our expectation for diluted net income per common share for 2015 to a range of $10.90 to $11.10 per share compared to $8.78 per share earned in 2014."
