Financial Data and Key Metrics Changes - Sherwin-Williams reported a consolidated sales increase of 2.6% to $4.15 billion for Q1 2020, with a gross margin improvement to 45.6% from 42.9% [15][17] - Profit before tax rose by $93.4 million to $392.3 million, and diluted net income per share increased to $3.46 from $2.62 [15][16] - Adjusted diluted earnings per share increased by 13.3% to $4.08 from $3.60 [16] - Adjusted EBITDA increased by $48 million to $623.1 million, representing 15% of sales [17] Business Line Data and Key Metrics Changes - The Americas group achieved same-store sales growth of 7.4% and improved segment margin by 140 basis points [18] - The Consumer Brands Group and Performance Coatings Group also reported improved segment margin performance [18] Market Data and Key Metrics Changes - The company noted a significant near-term demand pause across most end markets due to the pandemic, with DIY markets being less affected [9][28] - In residential repaint, demand is expected to return gradually as social distancing measures ease [29] - New residential construction starts were strong at the beginning of the year, but cancellations have increased due to the pandemic [30] - The protective and marine segment saw a sharp decline in sales tied to oil and gas, which represents about 40% of its sales [34] Company Strategy and Development Direction - The company plans to continue strategic investments in stores, products, and e-commerce despite the pandemic [12] - Sherwin-Williams anticipates opening approximately 50 new stores in 2020 while focusing on enhancing productivity and innovative products [35] - The company is executing a comprehensive response to the pandemic, including cost reductions and adjustments to operations [11][24] Management's Comments on Operating Environment and Future Outlook - Management believes the current demand situation is a pause rather than a destruction of demand, with confidence in long-term fundamentals [12][26] - The second quarter is expected to be challenging, with a projected sales decrease of low to mid-teens percentage compared to Q2 2019 [45] - Full-year sales guidance has been revised to reflect uncertainties, with expectations of flat to low single-digit percentage decrease if conditions improve in Q3 [46] Other Important Information - The company has a strong balance sheet with $239 million in cash and $2.5 billion of unused capacity under its revolving credit facility [51] - Capital expenditures for 2020 have been reduced from $320 million to $180 million due to the pandemic [55] - The company has committed to maintaining its dividend increase of 18.6% to $1.34 per share [54] Q&A Session Summary Question: Key trends in the Americas group and DIY sustainability - Management noted that the DIY boost is largely due to customers spending more time at home, but expects a gradual shift back to professional services as social distancing measures ease [58][64] Question: Demand pause versus disruption - Management expressed confidence that the current demand situation is a pause, citing fundamental needs in housing and ongoing relationships with major builders [69][70] Question: Raw material costs and trends - Management expects lower year-over-year raw material costs due to declines in crude oil prices, with a focus on the petrochemical side impacting pricing [83] Question: Sales dip during curbside pickup - Management indicated that while sales dipped when transitioning to curbside pickup, there has been a week-to-week improvement in sales as the company adapts to the new environment [85][87] Question: CapEx reduction details - The significant CapEx reduction is primarily due to paring back capacity projects and monitoring demand trends, with plans to reinvest as conditions improve [108]

The Sherwin-Williams Company (NYSE:SHW) Q4 2019 Earnings Conference Call January 30, 2020 11:00 AM ET Company Participants Jim Jaye - Senior Vice President, Investor Relations John Morikis - Chairman & Chief Executive Officer Al Mistysyn - Chief Financial Officer Conference Call Participants Christopher Parkinson - Credit Suisse Stephen Byrne - Bank of America Merrill Lynch Jeff Zekauskas - JPMorgan Ghansham Panjabi - Baird John McNulty - BMO Capital Markets Arun Viswanathan - RBC Capital Markets Kevin McCa ...

OPERATING SEGMENTS ADJUSTMENTS TO SEGMENT PROFIT 4Q AND FULL YEAR 2019 Consolidated | --- | --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------------------------|-------|----------------------------------|-------|-------|--------------|-------------------------------------------|------------|-------| | | | | | | | | | | | (in millions) | | | | | Consolidated | | | | | | | Three Months Ended December 31, | | | | December 31, | Year Ended | | | | | 2019 | | 2018 | | 2019 | ...

Financial Data and Key Metrics Changes - Consolidated sales in Q3 2019 increased by $136.2 million, or 2.9%, to $4.87 billion, with currency translation rate changes decreasing sales by 0.9% [8] - Consolidated gross profit dollars increased by $215 million, or 10.7%, to $2.23 billion, with gross margin rising to 45.7% from 42.5% year-over-year [9] - Selling, general and administrative expenses increased by $72.1 million, or 5.7%, to $1.35 billion, with a slight increase in percentage of sales to 27.6% from 26.9% [10] - Diluted net income per share increased to $6.16 from $3.72 year-over-year, with adjusted diluted earnings per share rising by 17.1% to $6.65 [12][14] Business Line Data and Key Metrics Changes - The Americas Group sales increased by $232.5 million, or 8.7%, to $2.90 billion, with comparable store sales in the U.S. and Canada up by 8.1% [15] - Consumer Brands Group sales decreased by $92.1 million, or 11.9%, to $678.5 million, with sales from continuing operations down approximately 6% [17] - Performance Coatings Group sales decreased by $4.3 million, or 0.3%, to $1.29 billion, with currency translation reducing sales by 1.6% [19] Market Data and Key Metrics Changes - Sales in North America and Latin America increased by mid-single digits, while softness was noted in Asia and Australia [26] - Sales were positive in all North American customer end markets, with residential repaint up low double digits and commercial and DIY up high-single digits [27] Company Strategy and Development Direction - The company remains committed to achieving a long-term gross margin target of 45% to 48%, with a focus on integrating operations and leveraging synergies from acquisitions [23] - The company plans to open approximately 80 to 100 new stores for the year, with 31 net new stores opened year-to-date [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand outlook from North American professional painting contractors, expecting growth in The Americas Group to be in the mid to high single-digit range [37] - The company anticipates consolidated net sales to increase by a low single-digit percentage in Q4 2019, with adjusted full-year diluted net income per share guidance increased to $20.90 to $21.30 [39] Other Important Information - The company returned over $892 million to shareholders through cash dividends and share repurchases, an increase of 46% year-over-year [35] - The company refinanced and extended the maturity of its debt to improve liquidity and lock in favorable interest rates [21] Q&A Session Summary Question: Update on margin expansion opportunities post-Valspar integration - Management indicated that there is still significant work to be done on the Valspar integration, with ongoing efforts to leverage synergies and improve margins [46][47] Question: Insights on Performance Coatings sub-segments - Management highlighted strong growth in the coil business and positive momentum in packaging, while noting softness in the industrial wood business [51][53] Question: Raw material cost trends and pricing strategy - Management expects raw material costs to improve sequentially and year-over-year, with ongoing reviews of pricing strategies [60][62] Question: Same-store sales growth and market dynamics - Management attributed the strong same-store sales growth to a combination of pent-up demand and effective execution, with a focus on maintaining momentum [70][72] Question: Cash flow priorities and capital allocation - Management emphasized a balanced approach to capital allocation, focusing on share buybacks and organic growth opportunities, while remaining open to M&A [119]

The Sherwin-Williams Company (NYSE:SHW) Q2 2019 Results Earnings Conference Call July 23, 2019 11:00 AM ET Company Participants Jim Jaye - Senior Vice President of Investor Relations & Corporate Communications John Morikis - Chairman, Chief Executive Officer Al Mistysyn - Senior Vice President of Finance and Chief Financial Officer Conference Call Participants Jeff Zekauskas - JPMorgan Ghansham Panjabi - Baird Robert Koort - Goldman Sachs Christopher Parkinson - Credit Suisse Steve Byrne - Bank of America M ...

Financial Data and Key Metrics Changes - Consolidated sales in Q1 2019 increased by $75.9 million or 1.9% to $4.04 billion compared to Q1 2018 [8] - Consolidated gross profit dollars increased by $48.2 million or 2.9% to $1.74 billion [8] - Consolidated gross margin improved to 42.9% from 42.5% year-over-year [9] - Selling, general, and administrative expenses rose by $29.5 million or 2.4% to $1.24 billion, increasing as a percentage of sales to 30.8% from 30.6% [9] - Profit before tax decreased by $4.7 million or 1.6% to $298.9 million [10] - Diluted net income per share remained flat at $2.62, with adjusted diluted earnings per share increasing to $3.60 from $3.57 [11][12] Business Segment Data and Key Metrics Changes - **Americas Group**: Sales increased by $74.4 million or 3.6% to $2.15 billion; segment profit decreased by $6.3 million or 1.9% to $331.1 million [12][13] - **Consumer Brands Group**: Sales decreased by $1.9 million or 0.3% to $654.5 million; segment profit increased by $13.7 million or 18.5% to $87.9 million [14][15] - **Performance Coatings Group**: Sales increased by $3 million or 0.2% to $1.23 billion; segment profit increased by $7.9 million or 8.7% to $98.7 million [16][17] Market Data and Key Metrics Changes - Comparable store sales in the U.S. and Canada increased by 3.6% [13] - Sales in Latin America declined due to unfavorable currency translation [24] - Sales in Asia and Europe showed broad-based softness, impacting overall performance [20] Company Strategy and Development Direction - The company plans to open approximately 90 to 100 net new stores in the Americas by the end of the year [24] - Focus on maintaining discipline in spending while investing in growth opportunities [22] - Emphasis on improving profitability in the Consumer Brands segment and aligning with retail partners [25] Management's Comments on Operating Environment and Future Outlook - Management noted a slow start to the North American architectural painting season but remains optimistic due to strong project backlogs [19][20] - Anticipated gross margin improvement as raw material inflation moderates and volumes pick up [22] - Confidence in achieving full-year revenue guidance of a 4% to 7% increase compared to 2018 [31][32] Other Important Information - The company returned approximately $410 million to shareholders during the quarter, including a 31% increase in quarterly dividends [29][30] - Total debt stands at approximately $9.8 billion, with plans to reduce net debt by about $600 million during the year [29] Q&A Session Summary Question: Trends in U.S. housing market - Management believes declines in single-family starts do not reflect a decline in demand, with strong household formation expected to continue [39][40] Question: Raw material trends comparison - Differences exist in certain commodities like titanium dioxide, but overall petrochemical prices remain stable [49] Question: Americas Group margins - Margins were impacted by lower-than-expected volume and higher raw material inflation [59] Question: Architectural paint market outlook - Management remains optimistic about remodeling demand driven by factors like aging housing stock and consumer confidence [102][104]

Financial Data and Key Metrics Changes - Consolidated sales for Q4 2018 increased by $84.7 million or 2.1% to $4.06 billion, while full year sales increased by $2.55 billion or 17% to $17.53 billion [9][22] - Consolidated gross profit for Q4 decreased by $56.6 million or 3.3% to $1.68 billion, while gross profit for the year increased by $699.8 million or 10.4% to $7.4 billion [9][10] - Diluted net income per share for Q4 2018 decreased to $1.07 from $8.92 in the previous year, while full year diluted net income per share decreased to $11.67 from $18.20 [12][12] Business Segment Data and Key Metrics Changes - **Americas Group**: Q4 sales increased by $65.4 million or 3% to $2.25 billion, with full year sales up by $507.9 million or 5.6% to $9.63 billion [14][16] - **Consumer Brands Group**: Q4 sales decreased by $37.2 million or 6.5% to $534.4 million, while full year sales increased by $584.3 million or 27.1% to $2.74 billion [17][18] - **Performance Coatings Group**: Q4 sales increased by $56.5 million or 4.6% to $1.27 billion, with full year sales up by $1.46 billion or 39.4% to $5.17 billion [19][20] Market Data and Key Metrics Changes - Comparable store sales in the U.S., Canada, and the Caribbean increased by 2.9% in Q4 and 5.1% for the full year [14] - Currency translation rate changes negatively impacted sales by 1.8% in Q4 and 1% for the full year [14][19] Company Strategy and Development Direction - The company plans to continue investing in innovation and service, having introduced 25 new products in 2018 and opened 87 new paint stores in the U.S. and Canada [24][25] - The company aims to reduce debt by $600 million by the end of 2019, targeting a long-term leverage ratio of 2 to 2.5 [80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of demand across most end markets, despite uncertainties from economic and political factors [26][27] - For Q1 2019, the company anticipates consolidated net sales to increase by 2% to 6%, with full year core net sales expected to rise by 4% to 7% [27][28] Other Important Information - The company returned approximately $936 million to shareholders in 2018, including $323 million in cash dividends and $613 million for share repurchases [25] - The company expects incremental synergies of approximately $70 million to $80 million in 2019, with a total annual run rate of approximately $415 million by year-end [29] Q&A Session Summary Question: What is driving the strength in the residential repaint market? - Management noted strong growth in residential repaint driven by home value appreciation and baby boomers investing in renovations [35][36] Question: How does the company view the longer-term EPS outlook given current uncertainties? - Management indicated that an update on the 2020 outlook would be provided at the June Investor Day [39] Question: What is the sales guidance for 2019? - Management expects January sales to exceed first quarter guidance, with a focus on U.S. and Canada paint stores as the growth engine [41][42] Question: What is the outlook for the Performance Coatings Group margins? - Management anticipates margin expansion in 2019, supported by price increases and tight SG&A controls [46][47] Question: How does the company view the macroeconomic environment affecting growth? - Management expressed optimism about customer backlogs and market conditions, despite choppy construction data [54][55]