Sherwin-Williams Releases Third-Quarter Results
October 21, 2009
CLEVELAND - The Sherwin-Williams Co. announced its financial results for the third quarter and nine months ended September 30, 2009. Compared to the same periods in 2008, consolidated net sales decreased $271.7 million, or 12.0 percent, to $1.997 billion in the quarter and decreased $784.5 million, or 12.5 percent, to $5.495 billion in nine months due primarily to weak paint sales volume. Unfavorable currency translation rate changes decreased consolidated net sales 1.6 percent in the quarter and 2.3 percent in nine months while acquisitions added less than 1 percent to consolidated net sales in the quarter and nine months.
Diluted net income per common share increased in the quarter to $1.51 per share from $1.50 per share in 2008 and decreased in nine months to $3.17 per share from $3.57 per share last year, including asset impairment charges of approximately $.12 per share recorded in the second quarter last year. Third quarter gross profit margins recovered to a more normal level versus last year’s third-quarter depressed gross profit margins caused by rapidly escalating raw material costs.
Net sales in the Paint Stores Group decreased 13.5 percent to $1.221 billion in the quarter and 13.4 percent to $3.289 billion in nine months due primarily to continuing weak residential and commercial architectural paint sales volumes and lower sales in industrial coatings and non-paint categories partially offset by improving DIY customer sales. Net sales from stores open for more than twelve calendar months decreased 13.5 percent in the quarter and 13.3 percent in nine months versus last year’s comparable periods. Paint Stores Group segment profit decreased to $230.2 million in the quarter from $241.0 million last year and to $480.3 million in nine months from $534.7 million last year due primarily to lower sales volume partially offset by higher gross profit margins and reductions in selling, general and administrative expenses.
Net sales of the Consumer Group decreased 7.1 percent to $330.5 million in the quarter and 4 percent to $985.1 million in nine months due primarily to lower volume sales to most of the Group’s retail customers. Segment profit increased to $56.5 million in the quarter from $26.3 million last year and to $152.8 million from $127.9 million last year for nine months.
The Global Finishes Group’s net sales stated in U.S. dollars decreased 11.3 percent to $444.1 million in the quarter and 16.2 percent to $1.216 billion in nine months due primarily to lower paint sales volume and unfavorable currency translation rate changes that were partially offset by acquisitions and selling price increases. In the quarter and nine months, unfavorable currency translation rate changes decreased net sales of the Global Finishes Group in U.S. dollars by 6.4 percent and 8.4 percent, respectively, and acquisitions increased net sales by 1.4 percent and 1.8 percent, respectively.
Commenting on the third quarter and nine months financial results, Christopher M. Connor, Chairman and Chief Executive Officer, said, “While we remain disappointed with our sales, we are pleased with our earnings performance in the quarter resulting from the actions that have taken place within our operating segments to control costs, improve efficiencies, and maintain superior customer service. We have seen limited improvements in DIY and other end-user areas of our business but not to an extent that indicates any significant recovery or sustainable growth from the depressed markets of the past year. We continue to focus on growing volume and opportunities to leverage our controlled distribution network and strong brands to drive sales.”