Sherwin-Williams Company (SHW) released its first-quarter financial results on Tuesday, revealing lower-than-anticipated earnings and revenue. Adjusted earnings per share stood at $2.17, falling short of the Wall Street estimate of $2.21. Quarterly revenue amounted to $5.367 billion, below the analyst consensus of $5.505 billion.
Consolidated net sales decreased by 1.4% in the quarter, attributed to delayed capital expenditure (capex) projects that impacted Property Maintenance sales. Net sales from stores in the Paint Stores Group open more than twelve calendar months remained roughly flat.
Despite lower sales, the company’s gross profit increased to $2.531 billion from $2.420 billion a year ago. The gross margin expanded to 47.2% from 44.5% a year ago, indicating effective cost-cutting measures.
During the quarter, Sherwin-Williams returned $728 million to shareholders through dividends and share repurchases. As of the quarter’s end, the company held $179.9 million in cash and equivalents.
President and Chief Executive Officer Heidi G. Petz commented, “We also continued to execute our capital allocation strategy by investing $546 million in share repurchases and increasing our dividend 18.2% in the quarter.”
Sherwin-Williams reaffirmed its 2024 adjusted EPS guidance of $10.85-$11.35, which is lower than the $11.44 estimate. The company expects consolidated net sales to grow in the low to mid-single digits compared to 2023. Petz added, “We expect second quarter 2024 consolidated net sales to be flat to up a low-single digit percentage compared to the second quarter of 2023.”
The company will provide a further update on its full-year guidance during its second-quarter results announcement in July.
In the pre-market trading session, SHW shares declined by 3.2% to $299.37, reflecting investor disappointment with the weaker-than-expected financial performance.
