Abstract
Sherwin-Williams will release fiscal second-quarter 2026 results on July 28, 2026 Pre-MKt; consensus indicates year-over-year revenue growth near 4.82% with softer adjusted EPS, while pricing resilience, seasonal demand, and cost inflation frame a mixed margin setup.Market Forecast
The market expects Sherwin-Williams to post revenue of 6.60 billion US dollars this quarter, up 4.82% year over year, with adjusted EPS around 3.52, down 7.53% year over year; EBIT is projected at 1.24 billion US dollars, down 6.06% year over year. Management commentary from the prior update indicated gross margin should improve through the spring/summer season, although inflation and raw-material costs would continue to have a material impact, implying sequential margin progress but a guarded year-over-year comparison for profit metrics.The company’s core stores-based business is expected to benefit from seasonal volume, execution on price/mix near the high end of its guided low-single-digit range, and a bias toward higher-value professional jobs. Momentum remains most visible in the Sherwin-Williams Paint Stores Group, which generated 3.05 billion US dollars last quarter and grew approximately 3.70% year over year, supported by professional project activity despite ongoing DIY softness.
Last Quarter Review
Sherwin-Williams delivered revenue of 5.67 billion US dollars, up 6.81% year over year, with a gross profit margin of 49.07%, GAAP net income attributable to shareholders of 535.00 million US dollars, a net profit margin of 9.44%, and adjusted EPS of 2.35, up 4.44% year over year. A notable highlight was the top- and bottom-line beat versus market estimates, reflecting effective price/mix and disciplined cost management into the seasonal ramp.By segment, the Sherwin-Williams Paint Stores Group generated 3.05 billion US dollars and rose about 3.70% year over year, while the Performance Coatings Group recorded 1.71 billion US dollars and the Consumer Brands Group 908.30 million US dollars; stores remained the key earnings anchor, benefiting from professional demand resilience and operational execution.
Current Quarter Outlook
Paint Stores Group: Margin and mix carry the near-term story
Within the Sherwin-Williams Paint Stores Group, the path to meeting or exceeding the revenue consensus hinges on a seasonal uplift in professional jobs, ongoing price/mix discipline, and tight store-level execution. Management’s prior communication that composite price/mix should trend toward the high end of a low-single-digit range supports stability in unit economics, even if absolute volumes remain uneven across end customers. While DIY traffic remains muted relative to pre-pandemic peaks, the mix continues to skew toward professional projects, which typically carry better basket size and margin profile, aiding gross margin stability through the quarter.In the quality-of-earnings lens, incremental gross margin improvement this quarter should be more visible in stores than in other areas, helped by better labor planning, localized inventory optimization, and service-level reliability into the summer project calendar. The primary caveat is that cost inflation—particularly in certain petrochemical derivatives and packaging—could still compress the year-over-year EPS bridge, which aligns with the consensus view for lower adjusted EPS despite higher sales. Execution risk revolves around regional weather variability and timing of larger pro jobs; however, store engagement with commercial and property management accounts has been a consistent support to revenue cadence.
This quarter’s commentary around second-half activity will matter as much as the reported figures: investors will listen for order book color from professional contractors, signs of a steadier weekend DIY pattern, and whether pricing mechanisms remain intact given the inflation headlines. Evidence that price realization remains firm without volume degradation would set a constructive tone for the remainder of the year.
Most promising business: Stores-led growth remains the clearest near-term lever
The Paint Stores Group remains the clearest near-term growth engine due to its scale, cross-cycle pricing track record, and the seasonal tailwind into late Q2. From a numbers perspective, this segment’s latest quarterly revenue was 3.05 billion US dollars, up approximately 3.70% year over year—an encouraging directional signal that underpins this quarter’s mid-single-digit consolidated sales growth expectation. With labor capacity among professional painters rational and job pipelines intact, stores are positioned to leverage small share gains and upgrade mix to higher-spec coatings.For this quarter, the bull case in stores centers on three elements: first, favorable mix linked to commercial and property maintenance work; second, stable pricing capture supported by brand equity and service; and third, operating leverage from seasonal volumes that can offset part of the raw-material cost creep. The watch item is DIY, which management previously cited as soft; any stabilization in small-project DIY could offer incremental upside to traffic and ancillary product pull-through. Overall, stores provide the most visible bridge from revenue growth to gross margin resilience in the near term.
Stock-price drivers this quarter: Margin path, cost inflation, and guidance cadence
Investors are likely to focus on how gross margin tracks relative to management’s spring/summer improvement commentary, especially given consensus for EBIT to be down 6.06% year over year and EPS down 7.53% year over year. If gross margin expands sequentially and operating costs remain contained, the quality of earnings could mitigate the negative EPS delta versus last year. Conversely, if chemical input costs, including propylene-linked components and solvents, escalate faster than expected, EPS pressure could overshoot consensus despite healthy top-line growth.Price/mix realization is the second key swing factor. Management previously indicated a tilt toward the high end of low-single-digit price/mix for the year; confirming this trajectory, while demonstrating limited elasticity, would support both valuation and confidence in second-half delivery. Commentary around the cadence of professional backlogs, larger project timing, and weekend traffic patterns should add useful color to second-half run rates.
Lastly, expectations for full-year performance remain tied to the updated EPS framework and any new signals on inorganic moves or capacity actions. Notably, the company preserved financial flexibility by extending and amending credit lines earlier this year, and it continues to invest in targeted capacity expansions within coatings technologies where demand is structurally solid. Any reiteration of the full-year adjusted EPS framework, coupled with reaffirmed price/mix discipline, would serve as a stabilizer for the stock even if near-term EPS is modestly below last year.
Analyst Opinions
Across published views over the past six months, the ratio of bullish to bearish opinions is approximately 8:5, indicating a majority bullish stance. The bullish cohort—spanning well-followed institutions—frames a consistent message: revenue should grow in the mid-single digits year over year this quarter, margin execution remains credible despite cost inflation, and the stores network provides dependable cash-flow and earnings visibility.RBC reiterated an Outperform view and subsequently lifted its price target to 405 US dollars, citing stable price/mix and constructive gross margin momentum into peak season. JPMorgan maintained an Overweight stance, emphasizing near-term resilience in stores-led revenue and the company’s ability to execute through seasonal peaks. BMO maintained an Outperform rating and has discussed target revisions in recent weeks, underlining the blend of pricing durability and disciplined cost control as supportive to multi-quarter earnings quality. Citi kept a Buy view while raising its target to 380 US dollars, reflecting confidence in stores execution, price capture, and the potential for incremental operating leverage as volumes normalize. Mizuho reiterated a Buy with a target of 396 US dollars, pointing to a solid setup for sustained price/mix as a buffer against input cost variability. Berenberg’s Buy framework aligns with this theme: stable core demand patterns, steady price realization, and seasonal execution underpin the near-term case.
The through-line in these bullish previews is pragmatic: the quarter’s consensus already embeds a lower year-over-year EPS print, but the expected 4.82% sales growth, store-driven mix, and sequential gross margin improvement offer a credible foundation for stable forward estimates. These analysts view the risk/reward as balanced toward execution upside if cost inflation stays manageable and price/mix remains intact. They also point to the value of ongoing operational investments and selective capacity expansions, which help reinforce service levels during peak demand periods, supporting both customer retention and premium mix.
In synthesizing the majority view, what may matter most for the stock reaction is confirmation that the gross margin trajectory is improving as outlined previously, that stores continue to show steady professional traffic without discounting, and that the company’s full-year narrative stays aligned with composite price/mix at the higher end of the low-single-digit range. Delivery on these points would validate the bullish case that near-term EPS headwinds are transitory, with the earnings base supported by dependable top-line growth, constructive mix, and disciplined execution through the remainder of the year.
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