Sherwin-Williams earnings down 15 percent
Sherwin-Williams saw earnings fall in the second quarter, factoring in a difficult commodities market, while sales rose slightly.
Earnings fell 15.3 percent in the second quarter to $171.7 million from $202.6 million in the same period last year. Net sales grew just over 1.4 percent to $2.23 billion from $2.2 billion in the same period last year.
In the company’s retail Paint Stores Group, net sales were $1.355 billion in the quarter, 0.8 percent lower than in last year’s second quarter. Earnings fell 11.6 percent to $210.4 million, due to a one-time charge of $20.4 million related to the acquisition of certain trademarks, as well as “pressures caused by increasing product and freight costs.”
Same-store sales decreased 4.5 percent compared with last year in the Paint Stores Group.
The company’s Consumer Group, which includes paint and coatings products under brands such as Dutch Boy, saw sales decrease 3.2 percent in the quarter to $383.9 million. The sales decline was due primarily “to soft DIY demand at most of the group’s retail customers.”
Earnings in the Consumer Group were down 28.8 percent to $58.8 million. “Segment profit decreased due primarily to dramatic increases in raw material costs,” the company noted.
The Global Group’s net sales increased 12.6 percent to $488.9 million due to market volume gains, selling price increases, favorable currency translation and acquisitions. Earnings for the Global Group decreased 1.7 percent to $48 million.
“We continue to manage through an unprecedented downturn in the U.S. housing market that is both deep and wide,” said Christopher Connor, CEO and chairman of Sherwin-Williams, in a statement. “This downturn has severely depressed paint demand in the domestic new residential, residential repaint, DIY and commercial markets. Our Consumer Group faces the same market softness and has been coping with the extraordinary dynamics of rapid raw material cost increases.”
Connor noted that in the first six months of this year, the Paint Stores Group opened 39 and closed 62 stores -- by year-end, the company will have opened approximately 100 stores and closed 80, he said.