The Sherwin-Williams Company (SHW) Q2 2026 earnings summary

Executive summary

• Net sales rose 7.5% year-over-year to $6.79 billion for Q2 2026, with all segments exceeding guidance and the Suvinil acquisition contributing to growth.

• Adjusted diluted net income per share increased 9.5% to $3.70, and diluted EPS rose 14.3% to $3.43, driven by strong sales and operational execution.

• Free cash flow conversion reached 86%, with $1.5 billion returned to shareholders via buybacks and dividends in Q2 and $2.23 billion in the first half.

• Strategic execution, new account wins, and disciplined cost management, including restructuring actions, supported outperformance and are expected to yield $17 million in annual savings.

• Net operating cash improved to $1.35 billion for Q2 and $1.487 billion for the first half.

Financial highlights

• Adjusted EBITDA rose 10.5% to $1.5 billion, with margin expanding 60 bps to 21.5%.

• Gross margin was 49.2% of net sales, slightly down from 49.4% in Q2 2025.

• SG&A expenses were 31.0% of net sales, down from 31.9% year-over-year.

• Net operating cash for the quarter was $1.35 billion; capital expenditures for Q2 totaled $108.4 million.

• Net debt to adjusted EBITDA ratio at 2.4x at quarter end.

Outlook and guidance

• Full-year 2026 adjusted EPS guidance raised to $11.80–$12.20, with net sales expected to grow mid to high-single digits.

• Full-year gross margin expected to match prior year at midpoint.

• Inflation in raw materials expected to be high single digits in H2, mid-single digits for full year.

• No broad-based demand recovery assumed; focus remains on share gains, productivity, and pricing discipline.

• Economic assumptions include no Fed rate cuts, elevated oil prices, and subdued consumer sentiment.