Why this paint maker is being forced to jack up prices by 12% on consumers
We don't make stock recommendations at Yahoo Finance but we can offer up this bit of advice — if you are in the market for a can of Sherwin-Williams (SHW) paint to spruce up the house this spring it's best to buy it now.
The paint maker said Friday it will be taking an eye-popping 12% price increase on Feb. 1 inside its Americas segment as inflationary pressures in raw materials and labor continue to wreak havoc on the company's business.
"As we enter 2022, demand remains strong across the majority of our end markets, though we expect raw material availability and COVID-related issues to persist through the first quarter. Raw material and other costs remain elevated, and we continue to respond with pricing actions in every group to offset higher costs," said Sherwin-Williams CEO John Morikis.
Sherwin-Williams' decision to raise prices on consumers comes after the realities of the pandemic led to a disappointing end to 2021.
The company pre-announced 2021 earnings Friday, forecasting an adjusted $8.15 a share for the full year. Previously Sherwin-Williams predicted $8.35 to $8.55 a share.
On a call with analysts, Morikis pinned the profit shortfall on lower than expected paint sales and the Omicron variant causing staff shortages at stores and plants.
Pressures on the company's business appear to have continued into 2022.
"January is off to a slow start," Morikis added. The CEO declined to share guidance for 2022, pointing to the company's Jan. 27 full earnings release.
Sherwin-Williams shares fell 3.3% on the session. The news also led to selling pressure on fellow paint maker PP Industries, whose stock dropped 2.2%.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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