The Sherwin-Williams Company has released its financial results for the first quarter ended 31 March, 2022, showing consolidated net sales increased 7.4 per cent to US$5 billion.
Gross profit was US$2052.9 million compared to US$2112 million last year, while income before income taxes was US$461.1 million, a decrease of 9.4 per cent over last year’s US$509 million. Net income was US$370.8 million, down 9.5 per cent from US$409.6 million last year.
Consolidated net sales increased primarily due to selling price increases in all segments and higher product sales volume in the Performance Coatings Group. These increases were partially offset by lower sales volume in the Consumer Brands and The Americas Groups, mainly due to challenging prior year comparisons, along with anticipated raw material availability challenges, which the company said are “largely behind us”.
Income before income taxes decreased primarily due to lower sales volumes in the Consumer Brands Group and The Americas Group, and higher raw material costs across all three segments, partially offset by selling price increases and SG&A (selling, general and administrative) spending controls.
“Our team delivered results in line with our expectations in an environment characterised by strong demand, ongoing cost inflation, and choppy raw material availability that improved meaningfully in the final weeks of the quarter,” said Chairman and Chief Executive Officer John Morikis. “Sales grew 7.4 per cent against a double-digit comparison a year ago, and we delivered sequential improvement in consolidated gross margin and segment margins in all of our businesses.”
Morikis said margins remained under pressure on a year over year basis, as significant pricing actions previously announced in all businesses have not yet fully caught up to offset highly elevated raw material costs.
“Throughout the quarter, we remained focused on providing differentiated solutions for our customers, and we continue to see opportunity and momentum in every business,” Morikis said. “In The Americas Group, sales increased in all professional customer segments, led by protective and marine, property maintenance, new residential and residential repaint, and backlogs remain strong. While our Consumer Brands Group faced a challenging prior year comparison, the Group’s sales in North America were nearly flat as we continued to focus on supporting key retail partners and growing our Pros Who Paint initiative.
“The Performance Coatings Group delivered double-digit sales growth driven by both strong volume and pricing. All businesses and regions in the Group generated growth, led by our packaging and coil divisions. At quarter end, our architectural inventory gallons significantly improved in our distribution centres and our North American paint stores.”
Sherwin-Williams issued guidance for Q2 2022, with Morikis saying the company expects to continue outgrowing the market long-term.
“While there remains a significant amount of geo-political and raw material inflation uncertainty, demand remains strong across all our architectural and industrial end markets. We expect second quarter 2022 consolidated net sales to be up by a low-double digit to mid-teens percentage compared to the second quarter 2021. For the full year 2022, we continue to anticipate our consolidated net sales will increase by a high-single digit to low-double-digit percentage from 2021. Our expectations for full year raw material inflation remains unchanged at up by a low-double-digit to mid-teens percentage,” Morikis said.