Sherwin-Williams sees third-quarter earnings drop
Sherwin-Williams, the Cleveland-based paint manufacturing and retail giant, saw net earnings fall in the third quarter to $177.1 million from $200.3 million in the same period last year. Sales, however, rose 3.1 percent to $2.27 billion from $2.2 billion last year.
“We continue to manage our business through the challenging environment of the U.S. and global economies,” said Christopher Connor, president and CEO of Sherwin-Williams.
Connor said the downturn in the housing market has “severely depressed” demand for domestic new residential paint products, residential paints, DIY paints and even coatings for the commercial market. Particularly in the Paint Stores Group, the third quarter saw a much greater focus on controlling expenses to help offset higher commodity prices and lower demand.
In addition, “During the third quarter, the strong paint demand we had enjoyed in many foreign markets began to subside, and we anticipate increasing softness in the months ahead,” Connor said.
As for Sherwin-Williams’ three main business segments, results were as follows:
• In the Paint Stores Group, sales rose 0.7 percent to $1.41 billion from $1.4 billion in the same period last year, while earnings fell to $241 million from $248.4 million. Same-store sales decreased 1.4 percent in the quarter and 3.9 percent in the first nine months over last year’s comparable periods. While the company’s paint stores business segment saw some increases from acquisitions, those gains were more than offset by soft performance by “new residential, residential repaint, DIY and commercial markets and weak sales in non-paint categories.”
• In the company’s Consumer Group, which includes its lines of coatings sold under brands including Dutch Boy, Krylon and Minwax, sales increased 1.8 percent to $355.7 million compared with last year. Earnings decreased 59 percent to $26.3 million in the quarter. The earnings decrease was attributed to increased raw materials costs, lower volume in manufacturing and distribution operations and costs associated with curtailing some manufacturing and distribution operations.
• In the Global Group, net sales rose 12.5 percent to $500.8 million, while net earnings fell 5.6 percent to $45.3 million. The segment profit decrease was due “primarily to increasing raw material costs and the negative impact of the domestic economy on portions of this segment’s business,” according to the company.