What were the main drivers of Sherwin-Williams' financial performance in 2021?

The primary drivers were strong demand, particularly in the Americas Group and Performance Coatings Group, which led to record net sales. Selling price increases across all segments also contributed significantly. However, higher raw material costs and supply chain disruptions, particularly concerning availability, impacted gross margins and overall profitability compared to the previous year.

How did supply chain issues and raw material inflation affect the company?

Sherwin-Williams experienced significant raw material inflation and availability issues, which negatively impacted sales by a mid-single digit percentage and reduced gross profit margins. The company is implementing price increases and expects raw material availability to improve in 2022.

What is the company's outlook for 2022?

The company anticipates continued robust demand in its end markets and expects raw material availability to improve. Sherwin-Williams plans to increase production capacity, open more stores, continue strategic acquisitions, and manage costs through price adjustments to recover margins.

How is Sherwin-Williams managing its capital allocation?

The company remains disciplined in its capital allocation, focusing on driving value for customers and returns for shareholders. Priorities include investing in organic growth (e.g., new stores), pursuing strategic acquisitions, and returning excess cash to shareholders through open market share repurchases and cash dividends.

SHW 10-K FY2021 Annual Report — Revenue, Net Income, EPS

Summary

Sherwin-Williams Company reported record net sales of $19.94 billion in 2021, an increase of 8.6% driven by selling price increases across all segments and higher volumes in the Performance Coatings Group. However, diluted net income per share saw a slight decrease to $6.98 from $7.36 in 2020, impacted by higher raw material costs and availability issues that negatively affected full-year sales by a mid-single digit percentage. The company completed a three-for-one stock split in Q1 2021 to enhance accessibility for investors. The company navigated significant headwinds, including raw material inflation and supply chain disruptions, which are expected to improve in 2022. Sherwin-Williams is focused on meeting customer demand through capacity expansion, store growth, and strategic acquisitions, while implementing price increases to offset cost inflation and recover margins. The company maintains a strong balance sheet and plans to continue disciplined capital allocation, prioritizing organic growth, strategic acquisitions, and returning capital to shareholders via share repurchases and dividends.

Financial Highlights

55 data points

Beta

Revenue

$19.94B

0.4% Gross Margin

Net Income

$1.86B

0.1% Net Margin

EPS (Diluted)

$6.98

Total Assets

$20.67B

Cash & Equivalents

$165.70M

Free Cash Flow

$2.24B

Financial Statements

Beta

Revenue	$19.94B
Cost of Revenue	$11.40B
Gross Profit	$8.54B
SG&A Expenses	$5.88B
Operating Income	$3.08B
Interest Expense	$334.70M
Net Income	$1.86B
EPS (Basic)	$7.10
EPS (Diluted)	$6.98
Shares Outstanding (Basic)	262.50M
Shares Outstanding (Diluted)	267.10M

Key Highlights

1Record net sales of $19.94 billion in 2021, up 8.6% year-over-year.
2The Americas Group and Performance Coatings Group showed sales growth, while Consumer Brands Group sales declined.
3Diluted EPS decreased to $6.98 from $7.36 in 2020, affected by raw material cost increases and availability issues.
4Company completed a 3-for-1 stock split in March 2021.
5Divested the Wattyl business in Australia and New Zealand.
6Continued investment in acquisitions to expand product offerings and manufacturing capacity.
7Expects raw material availability to improve and plans additional price increases to offset inflation and recover margins in 2022.

SHERWIN WILLIAMS CO Annual Report, Year Ended Dec 31, 2021

Summary

Financial Highlights

Key Highlights

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