Sherwin-Williams (SHW) Earnings & Sales Miss Estimates in Q2
The Sherwin-Williams Company SHW logged earnings (as reported) of $2.42 per share in second-quarter 2021, up 12% from $2.16 in the year-ago quarter.
Barring one-time items, adjusted earnings in the reported quarter were $2.65 per share. The figure missed the Zacks Consensus Estimate of $2.68.
Sherwin-Williams posted revenues of $5,379.8 million, up 16.9% year over year. The figure missed the Zacks Consensus Estimate of $5,384.6 million.
The SherwinWilliams Company Price, Consensus and EPS Surprise
The SherwinWilliams Company price-consensus-eps-surprise-chart | The SherwinWilliams Company Quote
Segmental Review
The Americas Group segment registered net sales of $3,093.4 million in the second quarter, up 22.6% year over year. The upside was mainly owing to higher architectural sales across all professional end markets, driven by residential repaint, commercial and property maintenance as well as selling price increases. This was partly offset by the decrease in DIY as consumer demand returned to more normal levels.
Net sales in the Consumer Brands Group segment declined 25.4% year over year to $731.5 million. The downside was mainly due to lower sales volume to most of the retail consumers and the Wattyl divestiture.
Net sales in the Performance Coatings Group rallied 41.3% year over year to around $1,554.5 million in the reported quarter. The upside was mainly driven by higher sales volumes in all end markets served and higher selling prices.
Financials and Shareholder Returns
At the end of the second quarter, Sherwin-Williams had cash and cash equivalents of $219.6 million, up 16.7% year over year. Long-term debt declined 8.3% year over year to $7,603.8 million.
The company repurchased 6.4 million shares of its common stock in the first six months. It had remaining authorization to repurchase 52.25 million shares through open market purchases at the end of the quarter.
Outlook
The company expects consolidated net sales to increase mid-to-high single digit percentage in the third quarter. For 2021, it is expected to increase high-single to low-double digits. The company also expects adjusted earnings per share for 2021 between $9.15 and $9.45.
Price Performance
Shares of Sherwin-Williams have gained 35.2% in the past year compared with 30.3% rise of the industry.
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Zacks Rank & Key Picks
Sherwin-Williams currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Nucor Corporation NUE, Dow Inc. DOW and Cabot Corporation CBT.
Nucor has a projected earnings growth rate of around 455.4% for the current year. The company’s shares have surged 129.1% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dow has an expected earnings growth rate of around 403.01% for the current year. The company’s shares have gained 45.5% in the past year. It currently carries a Zacks Rank #2.
Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have surged 43.9% in the past year. It currently flaunts a Zacks Rank #1.
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