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CLEVELAND, Ohio — Despite what Sherwin-Williams Inc. CEO John Morikis called “an environment where demand remained highly variable by end market and region,” the paints and coatings supplier posted gains in its third quarter ended Sept. 30.
Consolidated net sales increased over the year-ago period by 1.1% to $6.1 billion, with net sales from stores in the U.S. and Canada open more than 12 months up 3% year-over-year.
EBITDA for the quarter increased 12.6% to $1.27 billion, or 20.7% of net sales, and diluted net income per share rose to $2.95 per share, up 12.6% compared with the $2.62 per share in the third quarter of 2022.
“Sherwin-Williams delivered strong third quarter results in an environment where demand remained highly variable by end market and region, and against a challenging prior year comparison,” said Morikis, adding, “As we previously indicated, we have deliberately chosen to continue investing at this time in multiple growth initiatives and solutions for our customers, which is reflected in higher SG&A costs in the quarter compared with a year ago. While we executed on these initiatives, we continued to create shareholder value as adjusted diluted net income per share and EBITDA grew by double-digit percentages, and we returned $566 million to our shareholders through dividends and share repurchases during the quarter.”
The Paint Stores Group’s net sales increased primarily due to benefits from selling price increases. Sales volume for the segment was approximately flat year-over year. The price increase and moderating raw materials costs fueled the segment’s profit for the quarter.
In the Consumer Brands Group, net sales decreased 4%, which the company attributed to the divestiture of the China architectural business. The company noted that lower sales volume growth in North America and Asia were partially offset by higher growth in Latin America and Europe. Profit for the segment dipped 13.7% for the period.
Net sales for the Performance Coatings Group also edged down by 1% for the period, primarily due to volume declines and partially offset by selling price increases. Profit for the segment increased, however, primarily due to moderating raw material costs and selling price increases.
“Given our strong third quarter results, we are increasing our earnings guidance for the full year,” said Morikis. “Our fourth quarter is a seasonally smaller one, and we continue to expect choppiness by region and end market. More importantly, we continue to see opportunity amid uncertainty, and our businesses are well-positioned.”
The company is increased its full year 2023 diluted net income per share guidance to a range of $9.21 to $9.41 per share, up from the previous $8.46 to $8.86 per share. It expects fourth quarter net sales to be up or down in low-single digit percentage compared with the year-ago period.
For the full Sherwin-Williams third quarter results, click here.
