Industrial paintmaker Sherwin-Williams profit misses estimates on weak demand (updated)

PPG Industries

22/10/2024 14:25

(Adds details on store closures in paragraph 3, analyst comment
in paragraph 6)
    By Pooja  Menon
       Oct 22 (Reuters) - Industrial paintmaker
Sherwin-Williams  SHW.N  missed third-quarter profit estimates
on Tuesday, hurt by lower sales in its segments that cater to
the housing, automotive and aerospace sectors, sending its
shares down more than 4% before the bell.
    The company expects its 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.
    Sherwin-Williams said it was forced to shut down about 225
stores for a short period during the fourth quarter due to the
Hurricane Milton.
    
    WHY IT'S IMPORTANT
    U.S. automakers reported a fall in third-quarter sales due
to fewer selling days and weaker consumer spending, pressuring
demand for coatings and furnishings materials. Sales of new U.S.
single family homes also fell in August.
    
    KEY QUOTE
    CEO Heidi Petz announced a 5% price increase in the paint
stores segment, effective January 2025, and pointed to
"continued choppiness in the demand environment".
    Analysts at KeyBanc Capital Markets said the stores closed
by Sherwin-Williams represented nearly 5% of the total stores
under the paint stores segment and are expected to have a
"noticeable impact" on the quarter's performance.
    
    CONTEXT
    The company supplies paints, coatings and specialty
materials under brands such as Valspar, Minwax and Purdy.
    Peer PPG Industries  PPG.N  also missed profit expectations
last week due to lower sales in its industrial coatings segment.
    
    BY THE NUMBERS
    Sherwin-Williams posted an adjusted profit per share of
$3.37 for the quarter, versus analysts' estimate of $3.54, data
compiled by LSEG showed.
    Net sales of $6.16 billion also missed estimates of $6.20
billion.
    Net sales in the consumer brands segment fell 7.5%, hurt by
softness in the do-it-yourself market in North America. Sales at
its performance coatings segment fell slightly to $1.72 billion.
    Its biggest segment, paint stores, saw a 3% rise in net
sales during the period.
    

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