The Sherwin-Williams Company has announced that consolidated net sales for the second quarter of 2023 increased 6.3 per cent to a record US$6.24 billion, aided by the Automotive Refinish business which grew by a high-single digit percentage. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased 31.4 per cent to US$1.28 billion in the quarter and was 20.6 per cent of net sales.
Consolidated net sales increased mainly due to selling price increases, which impacted sales by a mid-single digit percentage, and mid-single digit volume growth due to higher architectural sales volume in the Paint Stores Group. This growth was offset by lower volume in industrial businesses while acquisitions increased consolidated net sales by 1.4 per cent.
Income before income taxes grew primarily through selling price increases in all segments and higher sales volume in the Paint Stores Group, as well as moderating raw material costs. These factors were partially offset by lower sales volume in the Performance Coatings Group, increased investments in long-term growth initiatives, and higher employee-related costs.
The company generated US$1.29 billion in net operating cash during the first six months of 2023, an increase of 102 per cent over the same period in 2022, primarily as a result of higher profit. This strong cash generation allowed the company to return cash of US$848.7 million to its shareholders in dividends and repurchases of 2.3 million shares of its common stock during the first six months of 2023. As of 30 June 2023, the company had remaining authorisation to purchase 42.9 million shares of its common stock through open market purchases.
“As a result of our better than expected first half results, and our current visibility into the second half, we are increasing our sales and earnings guidance for the full year,” said John Morikis, Chairman and Chief Executive Officer of Sherwin-Williams. “At the same time, our second half comparisons remain challenging, and demand is likely to vary widely by region and end market, leading us to focus even more intensely on our new account and share of wallet initiatives.”
Morikis said the company expects 2023 third quarter consolidated net sales growth to be up or down a low-single digit percentage compared to the third quarter of 2022. Full year consolidated net sales are expected to be up a low-single digit percentage compared to 2022, versus prior guidance of flat to down a mid-single digit percentage.