Sherwin-Williams(SHW) - 2024 Q4 - Annual Results

Financial Performance - Consolidated Net sales increased to a record $23.10 billion, with a 1.7% increase in net sales from stores in the Paint Stores Group open for more than twelve months[5]. - Diluted net income per share rose 14.1% to $10.55, while adjusted diluted net income per share increased 9.5% to $11.33 for the full year[5]. - Generated net operating cash of $3.15 billion, representing 13.7% of net sales, and returned $2.46 billion to shareholders through dividends and share repurchases[5][18]. - Net sales for Q4 2024 reached $5,297.2 million, a slight increase from $5,252.2 million in Q4 2023, while total net sales for the year were $23,098.5 million compared to $23,051.9 million in 2023[30]. - Net income for Q4 2024 was $480.1 million, up from $356.2 million in Q4 2023, resulting in a diluted net income per share of $1.90 compared to $1.39 in the previous year[30]. - The company reported a net income of $2,681.4 million for the year ended December 31, 2024, compared to $2,388.8 million in 2023, reflecting a year-over-year increase of approximately 12.2%[40]. Sales Performance by Segment - Paint Stores Group net sales increased by 3.4% to $3.04 billion, driven by selling price increases and low-single digit percentage sales volume growth[9]. - Consumer Brands Group net sales decreased by 4.3% to $662.2 million, impacted by a 5.5% unfavorable foreign currency translation[11]. - Performance Coatings Group net sales decreased by 1.6% to $1.59 billion, primarily due to a 1.7% unfavorable foreign currency translation[14]. - The Paint Stores Group generated net sales of $3,044.9 million in Q4 2024, an increase from $2,944.6 million in Q4 2023, with segment profit rising to $606.4 million from $567.3 million[31]. - The Performance Coatings Group reported net sales of $1,589.0 million in Q4 2024, slightly down from $1,614.2 million in Q4 2023, but segment profit increased to $229.0 million from $220.3 million[31]. Future Guidance and Projections - Full year 2025 diluted net income per share guidance is projected to be between $10.70 and $11.10, with adjusted diluted net income per share guidance between $11.65 and $12.05[5][19]. - The company expects first quarter 2025 consolidated net sales to be up or down a low-single digit percentage compared to Q1 2024[20]. - Anticipated costs associated with the transition into new buildings in 2025 are expected to be $100 million, with an additional $40 million increase in interest expense due to refinancing activities[20]. - The company aims to control spending tightly, expecting growth in SG&A to moderate to a low-single digit level[20]. Asset and Liability Management - Total assets increased to $23,632.6 million as of December 31, 2024, compared to $22,954.4 million in 2023, indicating a growth in the company's asset base[34]. - Current liabilities rose to $6,808.7 million in 2024 from $6,626.9 million in 2023, with short-term borrowings increasing to $662.4 million from $374.2 million[34]. Cost Management and Expenses - The administrative segment reported a loss of $286.4 million in Q4 2024, an improvement from a loss of $317.2 million in Q4 2023, indicating better cost management[31]. - The company incurred a loss of $41.8 million related to the devaluation of the Argentine peso during the year ended December 31, 2023[42]. - The company’s total interest expense for the year ended December 31, 2024, was $415.7 million, slightly down from $417.5 million in 2023[40]. Capital Expenditures and Dividends - Capital expenditures for the year ended December 31, 2024, are expected to be $1,070.0 million, up from $888.4 million in 2023, reflecting a growth of about 20.5%[42]. - Cash dividends for the year ended December 31, 2024, are projected at $723.4 million, an increase from $623.7 million in 2023, representing a rise of approximately 16%[42]. Strategic Focus and Risk Management - The company plans to continue focusing on market expansion and product innovation to drive future growth, particularly in international markets[24]. - The company is actively managing risks related to supply chain disruptions and inflation, which could impact future performance[25]. - EBITDA for the year ended December 31, 2024, is reported at $4,491.5 million, compared to $4,149.9 million for the previous year, indicating a year-over-year increase of approximately 8.2%[40]. - Adjusted EBITDA for the year ended December 31, 2024, is reported at $4,239.1 million, compared to $4,149.9 million in 2023, showing an increase of about 2.1%[40].