Summary
Sherwin-Williams Company (SHW) reported a strong second quarter and first half of 2021, demonstrating robust sales growth driven by The Americas Group and Performance Coatings Group, along with favorable pricing actions. Despite headwinds from rising raw material costs, the company managed to increase its diluted net income per share, indicating effective operational management and pricing strategies. The company also maintained a strong liquidity position and generated substantial operating cash flow, supporting shareholder returns through dividends and share repurchases. Management highlighted continued demand in key segments, particularly in The Americas Group, where same-store sales saw significant year-over-year growth. While the Consumer Brands Group experienced a decline primarily due to normalizing DIY demand and the recent divestiture of Wattyl, overall performance remained resilient. Sherwin-Williams is proactively addressing inflationary pressures through price increases and is focused on long-term growth initiatives and disciplined capital allocation.
Financial Highlights
54 data points| Revenue | $5.38B |
| Cost of Revenue | $2.97B |
| Gross Profit | $2.41B |
| SG&A Expenses | $1.44B |
| Operating Income | $994.90M |
| Interest Expense | $83.50M |
| Net Income | $648.60M |
| EPS (Basic) | $2.47 |
| EPS (Diluted) | $2.42 |
| Shares Outstanding (Basic) | 262.80M |
| Shares Outstanding (Diluted) | 267.80M |
Key Highlights
- 1Consolidated net sales increased by 16.9% to $5.38 billion for the second quarter of 2021 compared to the prior year quarter, and by 14.7% to $10.04 billion for the first six months.
- 2Diluted net income per share rose 12.0% to $2.42 for the second quarter and increased to $3.93 for the first six months, reflecting improved profitability.
- 3The Americas Group and Performance Coatings Group were strong performers, with net sales increasing by 22.6% and 41.3% respectively in the second quarter, driven by higher sales volumes and pricing.
- 4Gross profit margin decreased to 44.8% in the second quarter from 48.0% in the prior year, primarily due to higher raw material costs, although gross profit dollars increased.
- 5Selling, general, and administrative expenses as a percentage of net sales decreased, indicating effective cost management relative to sales growth.
- 6Net operating cash flow improved by 11.8% to $1.201 billion for the first six months of 2021, underscoring strong cash generation capabilities.
- 7The company repurchased approximately 3.1 million shares of common stock during the second quarter and paid $297.7 million in cash dividends in the first six months, demonstrating commitment to shareholder returns.