Sherwin-Williams Reports Mixed Q4 Earnings; Warns On Challenging Demand Environment In 2023

Sherwin-Williams Co SHW reported fourth-quarter FY22 sales growth of 9.8% year-on-year to $5.23 billion, missing the consensus of $5.26 billion.
The increase in sales was driven by selling price increases in all segments and higher architectural sales volume in The Americas Group.
Adjusted EPS of $1.89 beat the analyst consensus of $1.86.
Gross profit margin expanded 320 basis points Y/Y to 42.7%.
Selling, general and administrative expenses rose 8.3% Y/Y to $1.55 billion. Adjusted EBITDA increased 52.6% Y/Y to $814.5 million.
The company held $198.8 million in cash and equivalents as of Dec. 31, 2022.
"Visibility beyond our first half of the year is limited. On the architectural side, U.S. housing will be under significant pressure this year. Slowing existing home sales and continued high inflation also will be headwinds. On the industrial side, we have already seen a slowdown in Europe, and the same is beginning to appear in the U.S. across several sectors," said Chairman and CEO John G. Morikis.
Also Read: Why Sherwin Williams (SHW) Stock Is Getting Hammered
Outlook: Sherwin-Williams sees FY23 adjusted EPS of $7.95 - $8.65, below the consensus of $10.14.
It sees FY23 revenue to be down mid-single digit % to flat.
SHW expects Q1 revenue to be flat to up mid-single-digit percentage.
Price Action: SHW shares are trading lower by 8.51% at $226.05 on the last check Thursday.

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