SHERWIN WILLIAMS CO Quarterly Report for Q1 Ended Mar 31, 2021

Summary

Sherwin-Williams reported a strong first quarter in 2021, with consolidated net sales increasing by 12.3% to $4.66 billion, driven by higher product sales volume across all reportable segments. Diluted net income per share saw a significant jump of 31.3% to $1.51. The company also experienced a substantial 256% increase in net operating cash, reaching $195.7 million, reflecting improved operating results and a significant loss on the divestiture of Wattyl which was partially offset by operating gains. The company completed a three-for-one stock split to enhance investor accessibility. Despite positive top-line and bottom-line growth, the company acknowledged ongoing uncertainties related to raw material inflation, supply chain constraints, and the pace of recovery in commercial markets. Management expressed confidence in the long-term outlook and maintained a disciplined capital allocation strategy, including share repurchases and dividends. Liquidity remains strong with substantial unused capacity under credit facilities.

Key Highlights

• 1Consolidated net sales increased 12.3% to $4.66 billion, primarily driven by higher sales volumes across all segments.
• 2Diluted net income per share rose 31.3% to $1.51, demonstrating improved profitability.
• 3Net operating cash surged by 256% to $195.7 million, indicating robust cash generation.
• 4The company completed a three-for-one stock split, making its shares more accessible to a broader investor base.
• 5A pre-tax loss of $111.9 million was recognized from the divestiture of Wattyl, impacting reported net income.
• 6Same-store sales for U.S. and Canada stores open over a year increased by 8.2%, showing healthy comparable store growth.
• 7The company maintained strong liquidity with $314.7 million in cash and $2.68 billion in unused credit facility capacity.

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