The coatings manufacturer anticipates that the conflict in Iran will increase inflationary pressures on raw materials. Revenue from the company's branded stores segment grew 3.7% year-over-year to $3.05 billion. Paint giant Sherwin-Williams (SHW) posted increased net profit for the first quarter, although the home improvement coatings company noted persistently weak demand from individual do-it-yourself (DIY) customers. The firm also cautioned that ongoing geopolitical instability and surging energy prices are contributing to inflationary impacts, which may lead to further product price increases.
First-quarter net profit was $534.7 million, or $2.15 per share, compared with $503.9 million, or $2.00 per share, in the same period last year. Excluding one-time items, Sherwin-Williams reported adjusted earnings per share of $2.35, surpassing the average analyst estimate of $2.27 compiled by FactSet. Total quarterly revenue rose 6.8% year-over-year to $5.67 billion, exceeding Wall Street's average forecast of $5.56 billion.
Segment performance data: - Revenue from branded stores reached $3.05 billion, up 3.7% year-over-year; - The consumer brands segment revenue surged 19% to $908.3 million, with gains from the acquisition of the Suvinil brand offsetting weakness in the North American DIY market; - Performance coatings revenue increased 6.5% to $1.71 billion.
Heidi Petz, Chairman, CEO, and President of the company, stated, "Amid heightened global uncertainty and soft demand across most end markets this quarter, Sherwin-Williams still delivered solid revenue growth." Persistently high U.S. mortgage rates and elevated home prices have continued to cool the housing market, thereby slowing overall construction activity. For the second quarter, Sherwin-Williams expects revenue growth to remain in the mid-single-digit range. Petz noted, "Based on current consumer confidence and leading indicators, we expect limited improvement—if any—in most end markets this year." Due to the Iran conflict and energy-related disruptions, the company anticipates continued inflationary pressure on raw material costs. In response, Sherwin-Williams has initiated price increases on certain products, with overall pricing adjustments likely to reach the upper end of earlier expectations. The company is implementing cost-saving measures across its operations to counter rising commodity costs but did not rule out the possibility of additional price increases.
Full-year 2026 guidance: - The company maintained its baseline EPS forecast of $10.70–$11.10, below Wall Street's average estimate of $11.23; - Adjusted EPS guidance remains $11.50–$11.90, largely in line with the analyst consensus of $11.71; - Full-year revenue growth is still projected in the low- to mid-single-digit range.
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