The Sherwin-Williams Company announced its financial results for the second quarter ended June 30, 2024. All comparisons are to the second quarter of the prior year, unless otherwise noted.

Summary

• Consolidated net sales increased 0.5% in the quarter to $6.27 billion.
  • Net sales from stores in the Paint Stores Group open more than twelve calendar months increased 2.4% in the quarter.
• Diluted net income per share increased 14.0% to $3.50 per share in the quarter compared to $3.07 per share in the second quarter 2023.
  • Adjusted diluted net income per share increased 12.5% to $3.70 per share in the quarter compared to $3.29 per share in the second quarter 2023.
• Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in the quarter increased 12.1% to $1.44 billion, or 22.9% of net sales.
• Increasing full year 2024 diluted net income per share guidance to a range of $10.30 to $10.60 per share, including acquisition-related amortization expense of $0.80 per share.
  • Increasing full year 2024 adjusted diluted net income per share guidance in the range of $11.10 to $11.40 per share.

"Led by strong performance in the Paint Stores Group, we continued to execute on our proven strategy across the company to deliver consolidated sales within our expectations, gross margin expansion, EBITDA growth, and a 12.5% percent increase in adjusted diluted net income per share," said President and Chief Executive Officer, Heidi G. Petz. "We generated strong cash flow and continued to execute our disciplined capital allocation strategy, including returning $1.34 billion to our shareholders through dividends and share repurchases during the year.

"Paint Stores Group sales were up, at the midpoint of our guidance, against a double-digit comparison. Volume increased by a low-single digit percentage, and price realization increased from first quarter levels as expected. We are clearly seeing a return on last year's growth investments in residential repaint, where volume increased by a mid-single digit percentage in a down market. We're also encouraged by growth in new residential, where we expect continued momentum over the back half of the year. Consumer Brands Group sales continued to be impacted by soft North America DIY paint demand. Performance Coatings Group sales were led by growth in Industrial Wood and Coil. Auto Refinish sales increased by low-single digits in North America but were offset by softness in Latin America. Packaging sales were down less than expected, and General Industrial demand was soft in all regions. Despite the continued choppiness in the overall demand environment, all three of our reportable segments delivered sequential and year-over-year margin improvement."

Second Quarter Consolidated Results

Consolidated Net sales increased primarily due to higher sales volumes in the Paint Stores and Performance Coatings Groups, partially offset by lower sales volumes in the Consumer Brands Group, inclusive of the impact from the divestiture of the China architectural business in 2023.

Income before income taxes increased primarily due to benefits from moderating raw material costs and higher Net sales, partially offset by continued investments in long-term growth strategies and digital technologies.

Diluted net income per share included a charge of $0.20 per share for acquisition-related amortization expense in both the second quarter of 2024 and 2023. In the second quarter of 2023, diluted net income per share also included a net charge of $0.02 per share related to activities associated with the Company's restructuring plan.

Second Quarter Segment Results

Net sales in PSG increased primarily due to low-single digit sales volume growth and continued realization of higher selling prices implemented earlier in the year. Net sales grew in all end markets, led by residential repaint, new residential, commercial and protective and marine, with the exception of property maintenance which declined modestly year-over-year. PSG Segment profit increased primarily due to higher Net sales and moderating raw material costs, partially offset by continued investments in long-term growth strategies, including higher employee-related costs.

Net sales in CBG decreased primarily due to a mid-single digit percentage sales volume decline as a result of soft DIY demand in North America, an approximate 2% impact from the divestiture of the China architectural business in 2023 and an approximate 2% impact from unfavorable currency translation. These decreases were partially offset by selling price increases in Latin America, which impacted Net sales by a low-single digit percentage. CBG Segment profit increased primarily due to higher fixed cost absorption in the manufacturing and distribution operations within the segment and moderating raw material costs, partially offset by lower Net sales and higher employee-related costs. Acquisition-related amortization expense reduced Segment profit as a percent of Net sales by 190 basis points in the second quarter of 2024 and 2023. Restructuring costs and impairment charges also reduced Segment profit as a percent of Net Sales by 140 basis points and 70 basis points, respectively, in the second quarter of 2023.

Net sales in PCG increased primarily due to incremental sales of 1.7% from an acquisition, partially offset by 1.0% unfavorable currency translation. Sales volume varied by region and business. Performance was led by Industrial Wood, Coil and Automotive Refinish in North America, partially offset by a decrease in General Industrial across all regions. PCG Segment profit increased primarily as a result of moderating raw material costs and higher Net sales, partially offset by higher employee-related costs. Acquisition-related amortization expense reduced Segment profit as a percent of Net sales by 270 basis points in the second quarter of 2024, compared to 280 basis points in the second quarter of 2023.

An archived replay of the results overview webcast will be available at https://investors.sherwin-williams.com/financials/quarterly-results/. The results can also be viewed here: https://mma.prnewswire.com/media/2466513/SHW_2Q_2024_Earnings_Slides_vFINAL.pdf?p=original. 

*Graphics courtesy of Sherwin-Williams.