Yahoo Finance Sherwin-Williams' (SHW) Q1 Earnings & Sales Lag Estimates
The Sherwin-Williams Company SHW logged first-quarter 2024 earnings (as reported) of $1.97 per share, up around 7.1% from $1.84 in the year-ago quarter.
Barring one-time items, adjusted earnings in the reported quarter were $2.17 per share, which missed the Zacks Consensus Estimate of $2.25.
Sherwin-Williams posted revenues of $5,367.3 million, down around 1.4% year over year. The figure missed the Zacks Consensus Estimate of $5,508.5 million. Consolidated net sales declined mainly due to a decrease in volumes in the Consumer Brands Group and the Performance Coatings Group in North America.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
The Sherwin-Williams Company price-consensus-eps-surprise-chart | The Sherwin-Williams Company Quote
Segmental Review
The Paint Stores Group segment registered net sales of $2,873 million in the first quarter, up around 0.5% year over year. The figure missed the consensus estimate of $2,957.6 million. Net sales in the segment grew primarily due to a minor impact from the recently announced price rise, with sales volume remaining relatively steady year over year.
Net sales in the Consumer Brands Group segment declined 7.1% year over year to $811 million, missing the Zacks Consensus Estimate of $856.6 million. Net sales at the unit fell primarily due to a mid-single-digit percentage sales volume fall and a 2.6% impact from divestitures in 2023. The fall in sales volume in North America was largely offset by sales volume growth in Europe, as well as selling price increases in Latin America and Europe, which affected net sales by a low-single-digit percentage.
Net sales in the Performance Coatings Group decreased roughly 1.6% year over year to $1,681.9 million in the reported quarter, missing the Zacks Consensus Estimate of $1,683.8 million. Net sales fell primarily owing to reduced sales volumes in North America and Latin America, which were somewhat offset by increased sales volumes in Europe, including the impact of acquisitions and Asia. The Industrial Wood and Coil businesses gained, offset by the decline in the General Industrial and Packaging.
Financials
SHW used $58.9 million in net operating cash in the reported quarter, predominantly due to seasonal increases in working capital requirements, which were somewhat offset by net income. In the first quarter of 2024, the company returned $728 million in cash to its shareholders through dividends and the repurchase of 1.7 million shares of common stock. As of Mar 31, 2024, SHW had the remaining authorization to buy back 37.9 million shares of its common stock in open-market transactions.
Outlook
The company forecasts its consolidated net sales for the second quarter of 2024 to be flat to up a low single-digit percentage year over year and up a low to mid-single-digit percentage for full-year 2024. It expects full-year 2024 earnings per share to be in the range of $10.05 to $10.55. Full-year 2024 adjusted earnings per share is projected to be in the band of $10.85 to $11.35. The company expects an effective tax rate of low 20% for 2024.
Price Performance
Shares of Sherwin-Williams have gained 30.7% in the past year compared with a 30.5% rise of the industry.
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Zacks Rank & Other Key Picks
Sherwin-Williams currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the basic materials space include Denison Mines Corp. DNN, Carpenter Technology Corporation CRS and Ecolab Inc. ECL.
Denison Mines sports a Zacks Rank #1 (Strong Buy). DNN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared 95.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #2. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have soared 60.5%% in the past year.
The Zacks Consensus Estimate for Ecolab’s current-year earnings is pegged at $6.43 per share, indicating a year-over-year rise of 23.4%. ECL, a Zacks Rank #2 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 1.7%. The company’s shares have rallied roughly 31.3% in the past year.
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