Sherwin-Williams(US:SHW)2025-10-28 19:35Financial Performance - Consolidated net sales increased by 3.2% to $6.358 billion in Q3 2025, and by 1.0% to $17.978 billion year-to-date[136] - Diluted net income per share rose by 5.3% to $3.35 in Q3 2025, but decreased by 3.6% to $8.34 year-to-date[136] - Net operating cash generated increased by 6.3% to $2.359 billion, representing 13.1% of net sales year-to-date[136] - Consolidated gross profit increased by $98.0 million in Q3 2025, with gross profit as a percentage of net sales rising to 49.2%[150] - Consolidated gross profit increased by $181.0 million in the first nine months of 2025 compared to the same period in 2024, with gross profit as a percent of consolidated net sales rising to 49.0% from 48.4%[157] - Net income decreased by 5.0% to $2.092 billion in the first nine months of 2025, while EBITDA decreased by 2.6% to $3.523 billion[169] - For the three months ended September 30, 2025, the net income was $833.1 million, compared to $806.2 million for the same period in 2024, representing a growth of approximately 3.6%[208] - EBITDA for the nine months ended September 30, 2025, was $3,523.1 million, a decrease of about 2.6% from $3,615.5 million in the same period of 2024[208] - Adjusted EBITDA for the three months ended September 30, 2025, was $1,359.0 million, compared to $1,281.8 million in 2024, indicating an increase of approximately 6.0%[208] Sales Performance by Segment - The Paint Stores Group's net sales increased by 5.1% in Q3 2025, driven by selling price increases and low-single digit sales volume growth[140] - The Consumer Brands Group's net sales decreased by 2.6% in Q3 2025, primarily due to soft DIY demand in North America and Latin America[141] - The Performance Coatings Group's net sales increased by 1.7% in Q3 2025, supported by low-single digit sales volume growth and favorable foreign currency translation[142] Expenses and Costs - SG&A expenses increased by $59.1 million in Q3 2025, primarily due to investments in long-term growth opportunities and costs related to new headquarters[152] - SG&A for the Paint Stores Group increased by $48.5 million in Q3 2025 compared to Q3 2024, primarily due to investments in new store openings, while as a percent of net sales, SG&A decreased year-over-year[153] - Consolidated SG&A increased by $219.0 million in the first nine months of 2025, with SG&A as a percent of net sales rising by 90 basis points compared to the same period last year[159] - Interest expense rose by $16.2 million in the first nine months of 2025 compared to the same period last year, reflecting the company's outstanding debt[162] - Interest expense for the nine months ended September 30, 2025, was $333.4 million, up from $317.2 million in 2024, reflecting an increase of about 5.0%[208] Cash and Liquidity - The company maintains a strong liquidity position with $241.5 million in cash and $3.131 billion of unused capacity under credit facilities as of September 30, 2025[135] - Cash and cash equivalents stood at $241.5 million, with total debt outstanding at $11.516 billion as of September 30, 2025[170] - Net operating cash for the nine months ended September 30, 2025, was $2.359 billion, an increase from $2.219 billion for the same period in 2024[198] - Net investing cash usage increased to $1.895 billion in the first nine months of 2025, primarily due to cash deposited for the future acquisition of a business[199] Debt and Equity - Total debt outstanding rose to $11.515 billion as of September 30, 2025, compared to $9.888 billion at December 31, 2024[184] - The Company issued $1.5 billion in senior notes in July 2025, with proceeds used to repay existing debt and fund working capital[185] - Shareholders' equity increased by $374.1 million during the first nine months of 2025, driven by net income of $2.092 billion and an increase in accumulated other comprehensive income (AOCI) of $285.1 million[194] Assets and Acquisitions - Goodwill increased by $214.0 million from December 31, 2024, primarily due to foreign currency translation fluctuations and purchase accounting allocations[180] - Intangible assets decreased by $67.0 million from December 31, 2024, mainly due to amortization of $248.5 million, partially offset by currency translation fluctuations and other adjustments[181] - Other assets increased by $1.266 billion from December 31, 2024, primarily due to a deposit held for the Suvinil acquisition[183] - The company continues to pursue business acquisitions and investments aligned with its long-term growth strategy[135] Tax and Accounting - Deferred income taxes increased by $49.7 million from December 31, 2024, primarily due to provisions of the Tax Act allowing for immediate expensing of certain domestic capital expenditures[189] - The company reported a total of $227.4 million in income taxes for the three months ended September 30, 2025, compared to $216.6 million in 2024, marking an increase of approximately 5.0%[208] - The company has not experienced significant changes in critical accounting policies since the year ended December 31, 2024[210] Risks and Market Conditions - The company cautions that forward-looking statements are subject to various risks and uncertainties, including economic conditions and competition, which could materially affect actual results[212] - The company utilizes derivative instruments for financial risk management but does not engage in speculative trading[214] - The company does not expect foreign currency translation or interest rate movements to have a material adverse effect on its financial condition[214] - There have been no material changes in the company's exposure to market risk since the last annual report[214]