Sherwin-Williams Company (The)
SHW · NYSE
Next quarter
Expected to report Jan 28, 2027 — estimated from last year’s reporting date.
Consensus is $2.34 EPS for Dec 2026 across 7 estimates, ranging $2.32 to $2.43.
SHW Sep 2026
- 0.55%
- $3.65
- $3.63
- —
- $6.86B
Reported results
- $6.86B
- 47.77%
- $821.00M
- $3.38
Highlights
- Sales growth Net sales rose 7.9% year over year to $6.86 billion, with mid-single-digit price/mix and low-single-digit contributions from volume and acquisitions; Paint Stores same-store sales increased 3.9%.
- EPS and expectations Adjusted diluted EPS was $3.63, up 1.1% year over year but just below the supplied $3.65 consensus. GAAP diluted EPS was $3.38, up 0.9% from $3.35.
- Margins under pressure Gross margin fell to 47.8% from 49.2%, mainly on higher raw-material and supply-chain costs and mix, including Suvinil. SG&A improved to 30.2% of sales from 30.7%, but pretax margin declined to 15.5% from 16.7%.
- Paint Stores Sales increased 4.7% to $4.02 billion and segment profit rose 2.1% to $974.3 million; profit margin eased 60 basis points to 24.3%.
- Performance Coatings Sales advanced 8.8% to $1.90 billion and segment profit grew 6.2% to $255.2 million; margin declined 30 basis points to 13.4%.
- Consumer Brands Sales grew 21.7% to $937.4 million, largely reflecting Suvinil, but segment profit fell 7.1% to $146.2 million and margin dropped to 15.6% from 20.4%.
- Full-year outlook The company maintained its mid- to high-single-digit sales growth outlook and narrowed adjusted diluted EPS guidance to $11.85–$12.15; GAAP diluted EPS guidance is $10.92–$11.22.
- Demand and costs ahead Management expects muted, choppy demand into 2027 and low- to mid-single-digit raw-material inflation, while targeting about $75 million of cost savings in 2027.
Analysis
Sherwin-Williams delivered strong top-line growth in a soft-demand quarter, but conversion into earnings remained limited. Net sales rose 7.9% year over year to $6.86 billion, while adjusted diluted EPS of $3.63 was slightly below the supplied $3.65 consensus. GAAP EPS was $3.38, up 0.9% from $3.35 a year ago. Against Q2, revenue edged up from $6.79 billion, but net income fell to $821.0 million from $843.6 million and diluted EPS declined to $3.38 from $3.43.
The central tension was growing sales against inflation and unfavorable mix: gross margin contracted 140 basis points to 47.8%, while lower SG&A as a share of sales only partly offset the pressure. Results also diverged by segment. Paint Stores and Performance Coatings grew sales and profit, whereas Consumer Brands’ sales increase was acquisition-led and profit declined amid Suvinil dilution, costs and weak North American demand. Management maintained its full-year sales outlook, narrowed adjusted EPS guidance to $11.85–$12.15, and described a softer-for-longer demand backdrop into 2027. It plans about $75 million of 2027 savings to help address continued cost inflation.
Margin and earnings conversion
Revenue growth did not translate proportionately into profit. Gross profit rose 4.9% to $3.28 billion, below sales growth, as gross margin fell to 47.8% from 49.2%. Management attributed the decline to higher raw-material and supply-chain costs and mix, including Suvinil and faster growth in lower-margin segments. Excluding Suvinil’s dilutive effect, year-to-date gross margin was flat year over year.
SG&A increased 6.0% to $2.07 billion but declined as a share of sales to 30.2% from 30.7%, reflecting efficiencies alongside higher Suvinil and employee-related expenses. Pretax income was nearly flat at $1.064 billion, and pretax margin declined to 15.5% from 16.7%. Net income fell 1.5% to $821.0 million, while lower diluted weighted-average shares—242.8 million versus 249.0 million—helped GAAP EPS rise 0.9% to $3.38. EBITDA increased 3.4% to $1.39 billion; adjusted EBITDA rose 3.3% to $1.40 billion, a 20.5% margin.
Paint Stores Group
- Sales and volume Net sales rose 4.7% to $4.02 billion, with mid-single-digit price and low-single-digit volume growth; same-store sales increased 3.9%, versus 3.6% a year ago.
- End markets Professional customer sales grew across end markets: protective and marine increased by double digits, commercial by high single digits, and residential repaint by mid single digits. Management described protective and marine as a sustained growth area, supported by infrastructure and maintenance opportunities.
- Profit and investment Segment profit increased 2.1% to $974.3 million, while margin declined to 24.3% from 24.9% as raw-material and supply-chain costs and growth investments—including sales representatives and stores—offset some sales benefit. The 8% store price increase effective September 1 was tracking as planned; management expects realization to build into the first half of 2027.
Performance Coatings
- Sales growth Net sales rose 8.8% to $1.90 billion, driven by mid-single-digit price increases and low-single-digit volume growth. General Industrial, Packaging and Coil each grew by double digits; Industrial Wood and Automotive Refinish increased by low single digits.
- Division mix Management highlighted mid-teens growth in General Industrial, including strong volume, and continued Packaging strength. Sales increased across all regions, including double-digit growth in Asia.
- Profitability Segment profit rose 6.2% to $255.2 million, but reported margin eased to 13.4% from 13.7%. Higher sales supported profit, while raw-material and supply-chain costs and employee expenses to support growth weighed on margin.
Consumer Brands and Suvinil
Consumer Brands sales increased 21.7% to $937.4 million, reflecting the Suvinil acquisition, favorable currency and positive mix; soft North American demand partly offset those factors. On the call, management said volume declined by mid single digits, with muted DIY demand, while price/mix and foreign exchange provided some support.
Segment profit fell 7.1% to $146.2 million and reported margin contracted to 15.6% from 20.4%. Adjusted segment profit declined 4.4% to $171.4 million, with adjusted margin at 18.3% versus 23.3%. Higher raw-material and supply-chain costs, acquisition-related SG&A and unfavorable currency transaction effects offset the sales increase. Management characterized Suvinil integration as progressing as expected and said the business’s gross-margin dilution reflects its cost structure and mix.
Outlook and capital returns
For Q4, Sherwin-Williams expects consolidated sales to increase by a mid-single-digit percentage year over year. It maintained full-year sales guidance of mid- to high-single-digit growth and narrowed adjusted diluted EPS guidance to $11.85–$12.15, with the midpoint unchanged; GAAP diluted EPS guidance is $10.92–$11.22. The ranges include $0.82 per share of Valspar-related amortization and $0.11 per share of severance and restructuring costs. Management expects demand to remain muted and choppy into 2027, with low- to mid-single-digit raw-material inflation and the greatest year-over-year cost impact in the first half. Planned 2027 savings are about $75 million, including actions taken during 2026 and further actions under review.
For the first nine months, operating cash was $2.59 billion versus $2.36 billion a year earlier. The company said it returned about $2.98 billion to shareholders through dividends and repurchases during that period, including repurchases of 7.1 million shares; authorization remained for 22.5 million shares at September 30.
