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 and supported by margin expansion and disciplined cost control.

• Adjusted EPS grew 3.7% to $2.25, while diluted EPS rose 1.5% to $2.00; Adjusted EBITDA increased 4.6% to $937 million, with margin up 100 bps to 17.7%.

• Gross margin expanded to 48.2% (48.5% excluding restructuring); SG&A declined due to efficiency gains and digitization.

• $351.7 million invested in share repurchases and a 10.5% dividend increase; $552.1 million returned to shareholders in Q1.

• Announced $1.15 billion pending acquisition of BASF’s Brazilian decorative paints business (Suvinil), expected to close in H2 2025.

Financial highlights

• Gross margin improved to 48.2% from 47.2% year-over-year; adjusted EBITDA margin was 17.7% of net sales.

• Net income for the quarter was $503.9 million; operating cash flow was negative $61.1 million due to seasonal working capital needs.

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

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

• Return on equity (annualized, Q1 basis) approximately 48.8%.

Outlook and guidance

• Full-year 2025 net sales expected 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; guidance reaffirmed.

• Management expects demand softness in several end markets to persist into H2 2025, with some recovery not likely until 2026.

• Second quarter raw material costs expected to rise to the higher end of low single digits due to tariffs; price increases may continue if tariffs persist.

• Will provide updated full-year outlook in July as visibility improves.