The Sherwin-Williams Company (SHW) Q3 2024 earnings summary

Executive summary

• Q3 2024 consolidated net sales rose 0.7% to $6.16 billion, led by Paint Stores Group up 3.2% and same-store sales up 2.2%, with modest acquisition contributions and nearly all hurricane-impacted stores reopened by quarter-end.

• Gross margin improved 140 bps to 49.1%, diluted EPS increased 7.8% to $3.18, and adjusted EPS rose 5.3% to $3.37; EBITDA grew 1.2% to $1.28 billion, or 20.8% of net sales.

• $631 million was returned to shareholders via dividends and share repurchases in Q3, with $1.97 billion returned in the first nine months of 2024.

• Significant investments were made in stores, sales, technical reps, services, and digital capabilities to drive long-term growth.

• Approximately 200–425 stores were temporarily closed in Q3 due to hurricanes, with nearly all reopened by quarter-end.

Financial highlights

• Paint Stores Group sales increased 3.2% year-over-year; segment margin declined to 24.5% due to higher investments and mix.

• Consumer Brands Group sales decreased 7.5% year-over-year, impacted by soft North American DIY demand and FX; segment margin rose 900 bps to 22.9% on cost control and higher fixed cost absorption.

• Performance Coatings Group net sales were flat; adjusted segment margin decreased to 18% due to lower North America sales and FX.

• Net operating cash flow for Q3 was $1.07 billion, and $2.22 billion for the first nine months.

• SG&A expenses increased to 30.7% of net sales in Q3 2024, reflecting growth investments and higher employee costs.

Outlook and guidance

• Full-year 2024 diluted EPS guidance reaffirmed at $10.30–$10.60; adjusted EPS guidance $11.10–$11.40, up 8.7% at midpoint versus 2023.

• Q4 and full-year 2024 net sales expected to be flat to up low-single digits; guidance range is wider due to hurricane recovery timing and potential industrial customer shutdowns.

• Announced 5% price increase in Paint Stores Group effective January 6, 2025, to offset feedstock, wage, and healthcare cost pressures.

• Capital expenditures for 2024 projected at $700–$770 million, including $180 million for a new R&D facility.

• Demand expected to remain choppy in the first half of 2025; strategy is to continue aggressive investment and market share gains.