CLEVELAND - The Sherwin-Williams Company (NYSE: NYSE:SHW) reported a notable increase in its second-quarter earnings per share (EPS), surpassing analyst expectations and sending its shares up by 5%.
The company announced an adjusted EPS of $3.70, which was $0.21 higher than the analyst estimate of $3.49. However, revenue for the quarter was slightly below the consensus estimate, coming in at $6.27 billion against an anticipated $6.33 billion.
In comparison to the same quarter last year, Sherwin-Williams saw a modest increase in consolidated net sales of 0.5%, with sales from stores open more than twelve months rising by 2.4%. The company's diluted net income per share also experienced a growth of 14.0%, reaching $3.50 per share compared to $3.07 per share in the second quarter of 2023. The adjusted diluted net income per share saw a 12.5% increase from $3.29 per share in the previous year's quarter.
President and Chief Executive Officer Heidi G. Petz attributed the company's solid performance to the Paint Stores Group's strong sales, which were at the midpoint of their guidance, and to the volume increase in residential repaints. Despite a challenging market, the company successfully executed its strategy, leading to gross margin expansion and EBITDA growth.
For the full year 2024, Sherwin-Williams has raised its diluted net income per share guidance to a range of $10.30 to $10.60, including acquisition-related amortization expenses. The adjusted diluted net income per share guidance is also increased to a range of $11.10 to $11.40. This updated guidance reflects the company's better-than-expected second-quarter diluted net income per share results, tempered by continued demand uncertainty in several end markets. The midpoint of the full-year adjusted EPS guidance is slightly below the analyst consensus of $11.37.
Ms. Petz remains optimistic about the company's position in the market and its long-term value creation, despite the softer macroeconomic environment.
Sherwin-Williams continues to focus on providing differentiated solutions to drive customer productivity and profitability, expecting third-quarter 2024 consolidated net sales to rise by a low-single-digit percentage compared to the third quarter of 2023. The company's disciplined capital allocation strategy and investments in growth initiatives are expected to yield above-market performance moving forward.
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