Sherwin-Williams Q3 Profit Misses Estimates

By Pooja Menon

(Reuters) – Industrial paintmaker Sherwin-Williams (NYSE: SHW) missed third-quarter profit estimates on Tuesday, affected by lower sales in housing, automotive, and aerospace sectors. This caused shares to drop over 4% before the market opened.

The company forecasts fourth-quarter net sales to remain flat or rise in low single-digit percentages, amid potential shutdowns by industrial customers during the holiday season. Sherwin-Williams also reported having to temporarily close about 225 stores during the fourth quarter due to Hurricane Milton.

Why It’s Important

U.S. automakers reported a decline in third-quarter sales due to fewer selling days and weaker consumer spending, impacting demand for coatings and furnishings materials. Additionally, sales of new single-family homes in the U.S. fell in August.

Key Quote

CEO Heidi Petz announced a 5% price increase in the paint stores segment, effective January 2025, attributing this to "continued choppiness in the demand environment."

Analysts at KeyBanc Capital Markets noted that the stores closed represented nearly 5% of the total in the paint stores segment and are expected to significantly affect the quarter’s performance.

Context

Sherwin-Williams supplies paints, coatings, and specialty materials under brands like Valspar, Minwax, and Purdy. Its peer, PPG Industries (NYSE: PPG), also missed profit expectations last week due to lower sales in its industrial coatings segment.

By the Numbers

Sherwin-Williams reported an adjusted profit per share of $3.37 for the quarter, below the analysts' estimate of $3.54.

Net sales stood at $6.16 billion, also missing estimates of $6.20 billion.

Sales in the consumer brands segment fell 7.5%, impacted by softness in the do-it-yourself market in North America, while sales in the performance coatings segment slightly declined to $1.72 billion. The paint stores segment noted a 3% rise in net sales during the period.