Sherwin-Williams' Q2 Earnings Lag Estimates, Revenues Beat

The Sherwin-Williams Company SHW logged second-quarter 2025 earnings (as reported) of $3 per share, down around 14.3% from $3.50 in the year-ago quarter.

Barring one-time items, adjusted earnings were $3.38 per share, which missed the Zacks Consensus Estimate of $3.76.

Sherwin-Williams posted revenues of $6,314.5 million, up around 0.7% year over year. The figure beat the Zacks Consensus Estimate of $6,284 million.

Segmental Review

The Paint Stores Group segment registered net sales of $3,702.2 million in the second quarter, up around 2.3% year over year. The figure beat the Zacks Consensus Estimate of $3,685.4 million. The segment's net sales grew by a mid-single digit percentage due to higher selling prices, somewhat offset by a low-single digit fall in volume.

Net sales in the Consumer Brands Group segment declined 4.1% year over year to $809.4 million, missing the consensus estimate of $821.3 million. The segment's net sales decreased due to soft DIY demand in North America and a 2% impact from unfavorable foreign currency translation, mainly in Latin America. However, increased net sales in Europe partially offset the decline.

Net sales in the Performance Coatings Group declined roughly 0.3% year over year to around $1,801.1 million in the reported quarter, beating the consensus estimate of $1,770.5 million. The segment's net sales were flat, with increased sales from acquisitions offset by lower selling prices due to product mix.

Financials

During the first six months of 2025, the company generated $1.05 billion in net operating cash and returned $1.27 billion to shareholders through dividends and stock repurchases of 2.5 million shares. As of June 30, 2025, the company had the authorization to buy back 32 million shares of its common stock through open market purchases.

Outlook

For the third quarter and full-year 2025, the company anticipates net sales to be up or down by a low-single-digit percentage, reflecting a relatively stable revenue outlook. The effective tax rate is expected to be in the low 20% range for 2025. Net income per share is projected to range between $10.11 and $10.41, while adjusted net income per share is forecasted in the band of $11.20 to $11.50 for the full year.

Price Performance

Shares of Sherwin-Williams have lost 0.9% in the past year compared with a 2.4% decline of the industry.

SHW’s Zacks Rank & Key Picks

SHW currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth a look in the basic materials space include Royal Gold, Inc. RGLD, Kinross Gold Corporation KGC and Agnico Eagle Mines AEM.

Royal Gold is slated to report second-quarter results on Aug 6. The Zacks Consensus Estimate for earnings is pegged at $1.70. RGLD beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 9%. RGLD carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross is scheduled to report second-quarter results on July 30. The Zacks Consensus Estimate for KGC’s second-quarter earnings is pegged at 27 cents. KGC beat the Zacks Consensus Estimate in three of the last four quarters, with the average earnings surprise being 16.1%. KGC currently carries a Zacks Rank #1.

Agnico Eagle is slated to report second-quarter results on July 30. The consensus estimate for AEM’s earnings is pegged at $1.66. AEM, carrying a Zacks Rank #1, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 12.3%. 

 

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This article originally published on Zacks Investment Research (zacks.com).

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