On paper, it was a solid quarter for Sherwin-Williams.

The Cleveland-based manufacturer topped Wall Street expectations with adjusted earnings of $2.35 per share and sales of $5.67 billion, up 6.8% year over year, in its latest earning report to Wall Street.

Profitability improved across the board, with net income rising 6.1% to $534.7 million and EBITDA climbing 8.8% to just under $1 billion.

But contractors shouldn’t expect that momentum to translate into an easy year. The company struck a cautious tone about demand, particularly on the residential side. 

DIY activity in North America remains sluggish, weighed down by high mortgage rates and a slow housing market, the company reports. That softness offset stronger performance in Europe and kept overall demand under pressure.

CEO Heidi G. Petz didn’t noted that the company expects “little to no recovery in most end markets this year” based on leading indicators the company monitors.

In other words, the hesitance from homeowners may not be going away any time soon.

Looking ahead, Sherwin-Williams is targeting mid-single-digit sales growth for the second quarter, while also signaling the possibility of further price increases to offset inflation and rising energy costs. We reported last week that PPG is warning of cost increases.

For painting contractors, the takeaway is straightforward: The macro environment looks to be softening, and materials costs are likely ticking up, so plan accordingly.