01—Abstract
Summary
Summary of the 8-K filed April 29, 2025. Cited figures are marked; the original filing is the authoritative source.
The Sherwin-Williams Company (SHW) reported first quarter 2025 results on April 29, 2025, with consolidated net sales down 1.1% to $5.31 billiona, held back by roughly a 1% unfavorable currency translation impact.
Profitability held up better than sales: diluted EPS rose 1.5% to $2.00b and adjusted diluted EPS rose 3.7% to $2.25, while adjusted EBITDA increased 4.6% to $937.0 million (17.7% of sales). Margin gains were driven by price realization and cost control in the Paint Stores Group, which offset lower volumes across all segments. Segment performance was mixed.
The Paint Stores Group (PSG) grew sales 2.3%c with same-store sales up 1.2%, and segment margin expanded to 18.4% from 17.2%, aided by protective and marine (high-single digit growth) and residential repaint (mid-single digit growth). Consumer Brands Group (CBG) sales fell 6.0% amid soft North American DIY demand, and Performance Coatings Group (PCG) sales declined 4.8%, with only Packaging growing. Commercial and property maintenance remained under pressure.
Operating cash flow was negative at $61.1 milliond, a seasonal pattern funded by short-term borrowings, while the company returned $552.1 million to shareholders through dividends and buybacks. Management reaffirmed full-year 2025 guidance of $10.70 to $11.10 diluted EPS and $11.65 to $12.05 adjusted diluted EPS, and guided second-quarter sales to be up or down a low-single digit percentage.
Management expects demand softness to persist into the second half of 2025 and noted that most revenue is U.S.-based and most raw materials are sourced regionally, which is relevant to tariff exposure. This is a furnished (Item 2.02) earnings release, not a material event filing.
02—Key points
Key Highlights
- Consolidated net sales fell 1.1% to $5.31 billion, with about 1 point of the decline from unfavorable currency translation.
- Diluted EPS rose 1.5% to $2.00; adjusted diluted EPS rose 3.7% to $2.25, and adjusted EBITDA rose 4.6% to $937.0 million (17.7% of sales).
- Paint Stores Group sales rose 2.3% to $2.94 billion, same-store sales grew 1.2%, and segment margin expanded to 18.4% from 17.2%.
- Consumer Brands Group sales fell 6.0% and Performance Coatings Group sales fell 4.8%, reflecting soft DIY demand, weak commercial construction, and Latin America FX headwinds.
- Full-year 2025 guidance was reaffirmed: diluted EPS of $10.70 to $11.10 and adjusted diluted EPS of $11.65 to $12.05, with net sales up low-single digits.
- Operating cash flow was negative $61.1 million on seasonal working capital needs, funded by short-term borrowings of $1.80 billion; shareholders received $552.1 million in dividends and buybacks.
- The company opened 18 net new Paint Stores and repurchased $351.7 million of shares, with the dividend increased 10.5%.
03—Questions
Frequently Asked Questions
Did Sherwin-Williams meet its first-quarter expectations?
Management said consolidated sales were within its guidance range, and adjusted diluted EPS of $2.25 grew 3.7% year over year. Growth came from pricing and cost control in the Paint Stores Group, not from volume, which declined across all segments.
Is the full-year 2025 outlook changing?
No. Full-year 2025 guidance was reaffirmed at $10.70 to $11.10 diluted EPS and $11.65 to $12.05 adjusted diluted EPS. Second-quarter net sales are expected to be up or down a low-single digit percentage, and management will update full-year guidance with its second-quarter results in July.
Which segments are weakest and why?
The Consumer Brands Group (sales down 6.0%) and Performance Coatings Group (sales down 4.8%) were weakest. Consumer Brands was hit by soft North American DIY demand and Latin America currency effects, and Performance Coatings by weak commercial construction and softness in core industrial accounts. Packaging was the one growth area in that segment.
How are tariffs and currency affecting the business?
Management said the largest share of revenue is in the United States and most raw materials are sourced in the regions where the company manufactures, which limits tariff exposure. Currency translation reduced consolidated sales by about 1%, with a roughly 3% impact in Consumer Brands and Performance Coatings from Latin America.
Is the negative operating cash flow a concern?
The $61.1 million operating cash outflow reflects seasonal working capital build, which is typical for the first quarter. It was funded through higher short-term borrowings, which rose to $1.80 billion. Investors should monitor whether debt levels stay manageable as the year progresses.
04—Continue