Sherwin-Williams Q3: Earnings Beat, 1.1% Sales Growth, Raised FY23 Earnings Guidance & More

Sherwin-Williams Company SHW reported third-quarter FY23 sales growth of 1.1% year-on-year to $6.117 billion, beating the analyst consensus estimate of $6.02 billion.

The increase in sales was driven by selling price increases, which impacted sales by a low-single-digit percentage.

Net sales from stores in the U.S. and Canada open more than twelve calendar months increased 3% in the quarter.

Adjusted EPS of $3.20 beat the consensus estimate of $2.77.

Gross profit margin expanded 490 basis points Y/Y to 47.7%. Selling, general and administrative expenses rose 9.1% Y/Y to $1.76 billion.

The company held $503.4 million in cash and equivalents as of September 30, 2023. Operating cash flow for nine months totaled $2.60 billion.

“Sherwin-Williams delivered strong third quarter results in an environment where demand remained highly variable by end market and region, and against a challenging prior year comparison,” said Chairman and CEO John G. Morikis.

Outlook: Sherwin-Williams raised it FY23 adjusted EPS outlook from $9.30 - $9.70 to $10.10 - $10.30, above the consensus of $9.83.

The company continues to see FY23 revenue to be up by a low-single-digit percentage. SHW anticipates Q4 consolidated net sales growth to be up or down a low-single-digit percentage year over year.

"Our fourth quarter is a seasonally smaller one, and we continue to expect choppiness by region and end market," added Morikis.

Earlier this month, Sherwin-Williams elected Heidi G. Petz to serve as the next Chief Executive Officer, effective January 1, 2024. Petz, who has served as President and Chief Operating Officer of Sherwin-Williams for the last two years, will assume the CEO duties currently held by Chairman and CEO Morikis. 

Price Action: SHW shares are trading higher by 1.51% at $242.24 at the last check Tuesday.