The Sherwin-Williams Company (SHW) Q2 2024 earnings summary

Executive summary

• Consolidated net sales rose 0.5% year-over-year to $6.27 billion in Q2 2024, with Paint Stores Group leading growth and Performance Coatings offsetting Consumer Brands declines.

• Gross margin expanded to 48.8%, up 280 bps year-over-year, driven by moderating raw material costs and favorable mix.

• Adjusted diluted EPS increased 12.5% to $3.70, while reported EPS rose 14% to $3.50; EBITDA grew 12.1% to $1.44 billion, or 22.9% of sales.

• $1.34 billion was returned to shareholders in the first half via dividends and share repurchases, with $613 million in Q2 alone.

• Management raised full-year adjusted EPS guidance to $11.10–$11.40, reflecting strong first-half performance and current visibility.

Financial highlights

• Q2 2024 net income was $889.9 million, up from $793.7 million a year ago; gross profit up 6.7% to $3.06 billion.

• Gross margin improved to 48.8% from 46.0% year-over-year; EBITDA margin reached 22.9% of sales.

• Diluted EPS for Q2 was $3.50 (up from $3.07); adjusted EPS up 12.5% to $3.70.

• Net operating cash flow for the first six months was $1.14 billion; $613 million returned to shareholders in Q2.

• Capital expenditures for 2024 are guided at $675 million, including major projects.

Outlook and guidance

• Full-year 2024 adjusted EPS guidance raised to $11.10–$11.40, up 8.7% at midpoint; diluted EPS guidance $10.30–$10.60 including acquisition amortization.

• Full-year consolidated sales expected to be up low single digits; Q3 sales also projected to rise low single digits.

• Paint Stores and Performance Coatings sales guidance unchanged; Consumer Brands guidance reduced due to weak DIY demand.

• Raw material costs expected to be flat to down low single digits in the back half of 2024.

• Capital expenditures for 2024 estimated at $675 million, with focus on productivity, maintenance, and new HQ/R&D center.