The Sherwin-Williams Company (SHW) Q1 2025 earnings summary

Executive summary

• Q1 2025 consolidated net sales declined 1.1% year-over-year to $5.31 billion, with Paint Stores Group up 2.3% and declines in Consumer Brands and Performance Coatings Groups; results were within guidance.

• Gross margin expanded 100 bps to 48.2% (48.5% excluding restructuring); adjusted EPS rose 3.7% to $2.25, and adjusted EBITDA increased 4.6% to $937 million.

• Disciplined capital allocation included $351.7 million in share repurchases and a 10.5% dividend increase, with $552.1 million returned to shareholders in Q1.

• Focus remains on new store openings, digital initiatives, and targeted acquisitions, including the pending $1.15 billion Suvinil acquisition in Brazil.

• Continued investment in digitization and simplification to drive efficiencies.

Financial highlights

• Reported EPS: $2.00 (up 1.5%); Adjusted EPS: $2.25 (up 3.7%) year-over-year; adjusted EBITDA: $937 million (up 4.6%), margin 17.7% (up 100 bps).

• Gross margin improved to 48.2% from 47.2% year-over-year.

• Operating cash flow was negative $61.1 million due to seasonal working capital needs.

• Total debt at quarter-end was $10.776 billion; cash and equivalents were $199.8 million; liquidity $2.15 billion.

• Capital expenditures were $189.3 million; cash dividends paid totaled $200.4 million.

Outlook and guidance

• Full-year 2025 net sales expected to be up low single digits; Q2 2025 net sales guidance is up or down low single digits year-over-year.

• Full-year 2025 GAAP EPS: $10.70–$11.10; adjusted EPS: $11.65–$12.05.

• Adjusted operating margin expected to improve in Q2 despite flat sales, aided by price increases and cost efficiencies.

• Management expects demand softness in several end markets to persist into the second half of 2025.

• Will update full-year outlook in July as market clarity improves.