SHERWIN WILLIAMS CO Quarterly Report for Q2 Ended Jun 30, 2022

Summary

Sherwin-Williams reported solid top-line growth in the second quarter of 2022, with consolidated net sales increasing 9.2% year-over-year to $5.87 billion. This growth was primarily driven by strategic pricing increases across all segments and increased sales volume in The Americas Group and Performance Coatings Group. However, diluted earnings per share saw a decline, falling to $2.21 from $2.42 in the prior year's quarter. This was attributed to higher raw material costs, supply chain inefficiencies, and inflationary pressures on labor and transportation, which negatively impacted gross margins despite sequential improvement. The company's financial position remains strong with ample liquidity, including $312.6 million in cash and $1.506 billion in unused credit capacity. Sherwin-Williams continues to prioritize capital allocation towards acquisitions and shareholder returns through share repurchases and an increased quarterly dividend. Despite some headwinds in the Consumer Brands Group due to softer DIY demand and macroeconomic challenges, the company is executing its strategy and managing through inflationary pressures.

Key Highlights

• 1Consolidated net sales increased by 9.2% to $5.87 billion in Q2 2022 compared to Q2 2021.
• 2Diluted earnings per share decreased to $2.21 in Q2 2022 from $2.42 in Q2 2021.
• 3Gross profit margin declined to 41.7% from 44.8% year-over-year, primarily due to increased raw material and supply chain costs.
• 4The Americas Group and Performance Coatings Group showed strong sales growth, driven by pricing and volume increases.
• 5Consumer Brands Group sales showed minimal growth, impacted by softer DIY demand and economic challenges.
• 6The company maintained strong liquidity with $312.6 million in cash and $1.506 billion in unused credit facilities.
• 7Sherwin-Williams increased its quarterly cash dividend to $0.60 per share.

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