Sherwin-Williams Shares Drop After Reporting Q2 Earnings Below Street View

Sherwin-Williams Shares Drop After Reporting Q2 Earnings Below Street View
  • Sherwin-Williams Co SHW reported second-quarter FY22 sales growth of 9.2% year-on-year, to $5.87 billion, missing the consensus of $6.03 billion.
  • The company attributed the sales growth to selling price increases in all segments, higher professional architectural sales volume in North America paint stores, and higher sales volumes in packaging and coil businesses.
  • Segment Sales: The Americas Group increased 8% to $3.3 billion, Consumer Brands Group grew 0.9% to $737.9 million, and Performance Coating group jumped 15.2% to $1.8 billion.
  • Gross profit margin contracted 310 basis points Y/Y to 41.7%.
  • Selling, general and administrative expenses rose 5.7% Y/Y to $1.5 billion.
  • The company held $312.6 million in cash and equivalents as of June 30, 2022.
  • Adjusted EPS of $2.41 missed the analyst consensus of $2.78.
  • Adjusted EBITDA fell 7.2% Y/Y to $976.1 million.
  • Outlook: Sherwin-Williams cut its FY22 adjusted EPS outlook to $8.50 - $8.80 (previously $9.25 - $9.65), versus the consensus of $9.38.
  • It expects FY22 sales to increase in high-single to low-double-digit percentage.
  • SHW expects Q3 consolidated net sales to increase by a low to mid-teens percentage.
  • Dividend: Sherwin-Williams board recently declared a regular quarterly dividend of $0.60 per common share payable on September 9, 2022, to shareholders of record on August 19, 2022.
  • Price Action: SHW shares are trading lower by 12.36% at $222.86 on the last check Wednesday.

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