Why Sherwin Williams (SHW) Stock Is Getting Hammered

Sherwin-Williams Co SHW shares are trading lower by 8.90% to $225.11 Thursday morning. Shares are trading lower after the company reported worse-than-expected fourth-quarter revenue and issued soft FY23 guidance.

What Happened?

Sherwin-Williams reported quarterly earnings of $1.89 per share which beat the analyst consensus estimate of $1.86 by 2%. The company also reported quarterly sales of $5.23 billion which missed the analyst consensus estimate of $5.26 billion by roughly 0.5%. This sales figure is however a 10% increase over sales of $4.76 billion in the same period last year.

Sherwin Williams says the company is introducing 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.

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The company says full year 2023 adjusted diluted net income per share is expected to be in the range of $7.95 to $8.65 per share, lower than the analyst consensus estimate of $10.17, compared to $8.73 per share in 2022.

What Else?

"Sherwin-Williams delivered strong fourth quarter results compared to the same period a year ago, including high single-digit percentage sales growth, significant year-over-year gross margin improvement, expanded adjusted operating margins in all three segments, strong double-digit adjusted diluted net income per share growth and strong EBITDA growth," said Chairman and Chief Executive Officer, John G. Morikis.

"Our strong fourth quarter performance led to record full year sales, which increased 11.1% to $22.1 billion.  Full year adjusted diluted net income per share also increased to a record level. Additionally, we generated strong net operating cash in the year, which enabled us to invest $883 million in share repurchases, pay $619 million in dividends and deploy $1 billion to complete five acquisitions that will add to our solutions and capabilities."

According to data from Benzinga Pro, Sherwin-Williams Co has a 52-week high of $299.99 and a 52-week low of $195.24.