The Sherwin-Williams Co. announced its financial results for the third quarter ended Sept. 30, 2023.
Overall, the company reported consolidated net sales year-over-year for the quarter of 1.1%, and net sales from stores in the U.S. and Canada open more than 12 calendar months increased 3% in the quarter.
The company operates three segments: Paint Stores Group; Consumer Brands Group; and Performance Coatings Group.
- The Paint Stores Group (PSG) includes company-operated Sherwin-Williams branded retail stores. For the quarter, this segment saw sales increases of 3.6% and margin growth of 25.9%. The company attributes both metrics to effective pricing and the growth in margin to lower costs for raw materials.
- The Consumer Brands Group (CBG) includes lines such as Purdy, Cabot, Valspar, Minwax, Krylon and others. Sales were down 4% for the quarter in this segment, which the company partially attributes to the divestiture of its China architectural business, which was completed August 1. The company noted there was “DIY softness” during the quarter, which was offset somewhat by growth in its “Pros Who Paint” category.
- The Performance Coatings Group, which includes aerospace, automotive, industrial and other similar categories, saw sales down about 1% for the quarter year-over-year.
“Sherwin-Williams delivered strong third-quarter results in an environment where demand remained highly variable by end market and region, and against a challenging prior year comparison,” says chairman and chief executive officer, John G. Morikis. “Consolidated net sales were within our guidance range, and consolidated gross margin of 47.7% expanded significantly both sequentially and year-over-year driven by pricing discipline and moderating raw material costs. As we previously indicated, we have deliberately chosen to continue investing at this time in multiple growth initiatives and solutions for our customers, which is reflected in higher SG&A costs in the quarter compared to a year ago.”
Looking ahead, the company has adjusted its fourth-quarter outlook.
“We expect 2023 fourth quarter consolidated net sales growth to be up or down a low-single digit percentage compared to the fourth quarter of 2022. Our fourth quarter is a seasonally smaller one, and we continue to expect choppiness by region and end market,” says Morikis. “More importantly, we continue to see opportunity amid uncertainty, and our businesses are well-positioned. We remain confident in our proven strategy and our differentiated customer-focused product and service solutions, and we expect to continue to outgrow the market.”
