Sherwin-Williams Co (SHW) Reports Strong Q3 2023 Earnings, Raises Full-Year Guidance
Consolidated net sales increased by 1.1% to $6.12 billion in Q3 2023
Diluted net income per share rose by 12.6% to $2.95 per share
EBITDA increased by 12.6% to $1.27 billion, or 20.7% of net sales
Full-year 2023 diluted net income per share guidance increased to a range of $9.21 to $9.41 per share
On October 24, 2023, Sherwin-Williams Co (NYSE:SHW) announced its financial results for the third quarter ended September 30, 2023. The company reported a 1.1% increase in consolidated net sales, reaching $6.12 billion. Diluted net income per share also saw a significant rise of 12.6%, reaching $2.95 per share compared to $2.62 per share in the third quarter of 2022.
Financial Highlights
The company's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the quarter increased by 12.6% to $1.27 billion, or 20.7% of net sales. Sherwin-Williams Co (NYSE:SHW) also generated net operating cash of $2.60 billion, or 14.6% of net sales, during the first nine months of 2023.
CEO John G. Morikis commented on the company's performance, stating,
Sherwin-Williams delivered strong third quarter results in an environment where demand remained highly variable by end market and region, and against a challenging prior year comparison."
Segment Performance
The Paint Stores Group (PSG) reported a 3.6% increase in net sales, primarily due to benefits from selling price increases. The Consumer Brands Group (CBG) saw a decrease in net sales by 4.0%, primarily due to the divestiture of the China architectural business. The Performance Coatings Group (PCG) reported a slight decrease in net sales by 1.0%, primarily due to high-single digit volume declines.
Liquidity and Cash Flow
The company generated $2.60 billion in net operating cash during the first nine months of 2023, an increase of 103% compared to the same period in 2022. This strong cash generation allowed the company to return cash of $1.41 billion to shareholders in the form of dividends and repurchases of 3.8 million shares of its common stock during the first nine months of 2023.
2023 Guidance
Given the strong Q3 results, Sherwin-Williams Co (NYSE:SHW) is increasing its earnings guidance for the full year. The company now expects its full-year diluted net income per share to be in the range of $9.21 to $9.41 per share. Full-year 2023 adjusted diluted net income per share is now expected to be in the range of $10.10 to $10.30 per share.
This article first appeared on GuruFocus.
