Sherwin-Williams reported first quarter revenue of $5.44 billion, up nearly 9% over Q1 2022 and exceeding Wall Street estimates. Sales from U.S. and Canadian stores open at east a year increased 14%.
The company’s Q1 EBITDA (earnings before interest, taxes, depreciation and amortization, a metric some in the financial industry believe to be an accurate reflection of financial health) jumped nearly 27%.
Sherwin-Williams CEO John G. Morikis said “We delivered strong results in the first quarter, with higher-than-expected consolidated net sales, sequential and year-over-year expansion in gross margin, and double-digit percentage growth in diluted net income per share and EBITDA. Segment margin expanded sequentially and year-over-year in all three of our reportable segments.”
Morikis also said that the company faces some hurdles as the year moves along, commenting that the architectural market might be slowing down. “While our first quarter was strong, it is also a seasonally smaller quarter, and our outlook for the full year remains unchanged at this time,” he said. “We continue to expect a very challenging demand environment in the back half of 2023 against difficult comparisons. On the architectural side of the business, we are seeing demand softness in new residential and the Consumer Brands Group DIY.”
Morikis continued that industrial business in North America is impacted by a slow economic recovery in Europe and China after the COVID-19 slowdowns, which may affect the company’s performance and strategies moving forward. “We will continue to prioritize what we can control, by maintaining a focus on recession-resilient markets, growing new accounts and share of wallet, continuing appropriate growth investments in stores and sales representatives, and managing price-cost dynamics,” he said. “We remain confident in our differentiated strategy, capabilities and product and service solutions, and we continue to expect to outperform the market.”
From here, the company expects a smaller change in the second quarter. “For the full year 2023, we continue to expect consolidated net sales to be down a mid-single digit percentage to flat compared to full year 2022,” said Morikis.
Here are additional highlights from the company report, comparing Q1 2023 to Q1 2022:
• Diluted net income per share increased 30.5% to $1.84 per share in the quarter compared to $1.41 per share in the first quarter 2022.
• Adjusted diluted net income per share increased 26.7% to $2.04 per share in the quarter compared to $1.61 per share in the first quarter 2022.
• Reaffirming full year 2023 diluted net income per share guidance in the range of $6.79 to $7.59 per share, including acquisition-related amortization expense of $0.81 per share and restructuring expense of $0.25 to $0.35 per share.
• Reaffirming full year 2023 adjusted diluted net income per share guidance in the range of $7.95 to $8.65 per share.
