Industrial paintmaker Sherwin-Williams profit misses estimates on weak demand

PPG Industries

22/10/2024 13:13

Oct 22 (Reuters) - Industrial paintmaker
Sherwin-Williams  SHW.N  missed Wall Street estimates for
third-quarter profit on Tuesday, hurt by lower sales in its
segments that cater to the housing, automotive and aerospace
sectors.
    Shares of the company were 7.61% lower in premarket trading.
    The firm expects fourth-quarter net sales to be flat to up
in the low single-digit percentages, against the backdrop of
potential shutdowns by industrial customers during the holiday
season.
    
    WHY IT'S IMPORTANT
    U.S. automakers reported a fall in third-quarter sales due
to fewer selling days and weaker consumer spending amid
inflationary challenges and higher interest rates, weighing on
demand for coatings and furnishings materials.
    Sales of new U.S. single family homes also fell in August
and could recover in the coming months as declining mortgage
rates and house prices stimulate demand.
    
    CONTEXT
    The company, one of the world's largest coating makers,
supplies paints, coatings and specialty materials under the
brands Valspar, Minwax, Purdy and many more.
    Last week, industry peer PPG Industries  PPG.N  also
reported a third-quarter profit miss due to lower sales at its
industrial coatings segment. 
    
    BY THE NUMBERS
    Ohio-based Sherwin-Williams posted an adjusted profit of
$3.37 per share for the three months ended Sept. 30, compared
with analysts' average estimate of $3.54 per share, according to
data compiled by LSEG.
    The specialty chemicals maker reported net sales of $6.16 
billion for the third quarter, below estimates of $6.20 billion.
    Net sales in the consumer brands segment fell 7.5% to $791
million, hurt by softness in the DIY market in North America,
while sales at the performance coatings segment fell slightly to
$1.72 billion.
    
    KEY QUOTE
    CEO Heidi Petz pointed to "continued choppiness in the
demand environment", and announced a 5% price increase effective
January 2025 in the paint stores segment.

 (Reporting by Pooja Menon in Bengaluru; Editing by Shilpi
Majumdar and Devika Syamnath)
 ((Pooja.Menon@thomsonreuters.com;))