OK
The Universal Selection Source:
Coatings Ingredients
Industry News

Sherwin-Williams Reports Strong Financial Results for Second Quarter 2015

Published on 2015-07-21. Author : SpecialChem

CLEVELAND, OHIO -- The Sherwin-Williams Company announced its financial results for the second quarter and six months ended June 30, 2015. Compared to the same periods in 2014, consolidated net sales increased USD 89.1 million, or 2.9%, to USD 3.13 billion in the quarter and increased USD 172.9 million, or 3.2%, to USD 5.58 billion in six months due primarily to higher paint sales volume in our Paint Stores and Consumer Groups. Unfavorable currency translation rate changes decreased consolidated net sales 3.0% in the quarter and six months.

Diluted net income per common share in the quarter increased to USD 3.70 per share from USD 2.94 per share in 2014 and increased in six months to USD 5.08 per share from $4.06 per share last year. The increases in second quarter and six month diluted net income per common share were due primarily to improved operating results of the Paint Stores and Consumer Groups. Currency translation rate changes decreased diluted net income per common share by USD .07 per share in the quarter and USD .11 in six months.

Net sales in the Paint Stores Group increased 5.4% to USD 1.98 billion in the quarter and increased 6.3% to USD 3.45 billion in six months due primarily to higher architectural paint sales volume across all end market segments. Net sales from stores open for more than twelve calendar months increased 3.9% in the quarter and increased 5.0% in six months over last year's comparable periods. Paint Stores Group segment profit increased $57.5 million to $433.4 million in the quarter from $375.9 million last year and increased $87.8 million to $610.0 million in six months from $522.1 million last year due primarily to higher paint sales volume. Segment profit as a percent to net sales increased in the quarter to 21.8% from 20.0% last year and increased in six months to 17.7% from 16.1% in 2014.

Net sales of the Consumer Group increased 13.1% to $490.0 million in the quarter and increased 11.0% to $841.7 million in six months due primarily to shipments of HGTV HOME® by Sherwin-Williams paint to Lowe's stores. Segment profit increased to $114.2 million in the quarter from $92.5 million last year and increased to $169.7 million in six months from $143.6 million last year due primarily to improved operating efficiencies. As a percent to net external sales, segment profit increased in the quarter to 23.3% from 21.3% last year and increased in six months to 20.2% from 18.9% last year.

The Global Finishes Group's net sales stated in U.S. dollars decreased 7.1% to $505.8 million in the quarter and decreased 6.4% to $975.3 million in six months. Unfavorable currency translation rate changes decreased net sales by 7.7% in the quarter and 7.3% in six months. Stated in U.S. dollars, segment profit increased in the quarter to $57.3 million from $54.9 million last year due primarily to higher paint sales volume and charges in the second quarter 2014 related to the exit of our business in Venezuela partially offset by unfavorable currency translation rate changes. Six month segment profit decreased to $96.2 million from $101.3 million last year due primarily to unfavorable currency translation rate changes. Second quarter and six months 2014 segment profit included a $4.5 million charge related to the exit of our business in Venezuela. Unfavorable currency translation rate changes reduced segment profit $8.3 million in the quarter and $12.7 million in six months. As a percent to net external sales, segment profit was 11.3% in the quarter versus 10.1% last year and 9.9% in six months compared to 9.7% in 2014.

The Latin America Coatings Group's net sales stated in U.S. dollars decreased 17.2% to $150.1 million in the quarter and decreased 13.0% to $316.3 million in six months due primarily to unfavorable currency translation rate changes partially offset by selling price increases. Unfavorable currency translation rate changes decreased net sales by 17.4% in the quarter and 15.6% in six months. Stated in U.S. dollars, segment profit decreased in the quarter to $4.0 million from $5.7 million last year and decreased in six months to $13.5 million from $15.6 million last year due primarily to increasing raw material costs and unfavorable currency translation rate changes partially offset by selling price increases. Unfavorable currency translation rate changes decreased segment profit $2.3 million in the quarter and $5.7 million in six months. As a percent to net external sales, segment profit decreased in the quarter to 2.7% from 3.1% last year and remained flat at 4.3% in six months.

The Company acquired 2.25 million shares of its common stock through open market purchases in the six months ended June 30, 2015. The Company had remaining authorization at June 30, 2015 to purchase 2.98 million shares.

Commenting on the financial results, Christopher M. Connor, Chairman and Chief Executive Officer, said, “Our Paint Stores Group posted another quarter of positive operating results and architectural volume growth across all end market segments. Consumer Group improved its operating results through improved operating efficiencies. The HGTV HOME® by Sherwin- Williams paint program rollout was completed in all Lowe's stores by May 1 and continued to ramp up to expected volumes throughout the quarter. Our Global Finishes and Latin America Coatings Groups are managing through the negative effects of currency devaluation and weak end market demand in some geographies. In total, it is gratifying to report another quarter of record sales and earnings per share.

“We continued to invest in our business by opening twenty-two net new locations in the Paint Stores Group in the first six months. During the quarter, we continued to buy shares of our stock, and we increased the dividend rate to $.67 from $.55 last year. Our balance sheet remains flexible and is positioned well for future acquisitions and other investments in our business.

“For the third quarter, we anticipate our consolidated net sales will increase three to five percent compared to last year's third quarter. At that anticipated sales level, we estimate diluted net income per common share in the third quarter of 2015 to be in the range of $3.75 to $3.90 per share compared to $3.35 per share earned in the third quarter of 2014. For the full year 2015, we expect consolidated net sales to increase three to five percent compared to full year 2014. With annual sales at that level, we are updating our guidance that diluted net income per common share for 2015 to be in the range of $10.60 to $11.00 per share compared to $8.78 per share earned in 2014.”

About Sherwin-Williams

Founded in 1866, The Sherwin-Williams Company is one of the global leaders in the manufacture, development, distribution, and sale of coatings and related products to professional, industrial, commercial, and retail customers. The company manufactures products under well-known brands such as Sherwin-Williams®, HGTV HOME® by Sherwin-Williams, Dutch Boy®, Krylon®, Minwax®, Thompson's® Water Seal®, and many more. With global headquarters in Cleveland, Ohio, Sherwin-Williams® branded products are sold exclusively through a chain of more than 4,100 company-operated stores and facilities, while the company's other brands are sold through leading mass merchandisers, home centers, independent paint dealers, hardware stores, automotive retailers, and industrial distributors.

Source: Sherwin-Williams

 


Halcyon Group 3rd R&D Innovation Summit
Back to Top