Sherwin-Williams' Earnings Beat Estimates in Q1, Revenues Lag

Core Viewpoint - Sherwin-Williams reported a slight increase in earnings per share for Q1 2025, but revenues declined year over year, missing consensus estimates, indicating mixed performance across its segments [1][2][3][4]. Financial Performance - The company logged first-quarter 2025 earnings of $2 per share, up approximately 1.5% from $1.97 in the same quarter last year [1]. - Adjusted earnings were $2.25 per share, surpassing the Zacks Consensus Estimate of $2.18 [1]. - Revenues totaled $5,305.7 million, down around 1.1% year over year, and missed the Zacks Consensus Estimate of $5,346.5 million [1]. Segmental Review - The Paint Stores Group segment achieved net sales of $2,939.8 million, up about 2.3% year over year, beating the consensus estimate of $2,919.9 million, driven by a mid-single-digit percentage rise in selling prices [2]. - The Consumer Brands Group segment saw net sales decline by 6% year over year to $762.2 million, although it exceeded the Zacks Consensus Estimate of $761.4 million, impacted by weaker DIY demand and unfavorable currency translation [3]. - The Performance Coatings Group experienced a net sales decrease of roughly 4.8% year over year to $1,602 million, missing the Zacks Consensus Estimate of $1,645.9 million, primarily due to adverse currency translation [4]. Cash Flow and Shareholder Returns - In Q1 2025, the company utilized $61.1 million in net operating cash due to seasonal increases in working capital requirements, which were largely offset by net income [5]. - The company returned $552.1 million to shareholders through dividends and the repurchase of 1 million shares of common stock [6]. Outlook - Sherwin-Williams forecasts consolidated net sales for Q2 2025 to be up or down by a low single-digit percentage year over year, with a similar expectation for full-year 2025 [7]. - Full-year 2025 earnings per share are projected to be in the range of $10.70 to $11.10, with adjusted earnings per share expected between $11.65 and $12.05 [7]. - The company anticipates an effective tax rate in the low 20% range for 2025 [7]. Price Performance - Shares of Sherwin-Williams have increased by 8.4% over the past year, contrasting with a 4.3% decline in the industry [8].