Sherwin-Williams Falls As Q2 Profit Disappoints, Forecasts Trimmed With No Quick Demand Rebound In Sight

Could a fresh coat of paint be losing its luster in the financial world? As Sherwin-Williams Co SHW faces a surprising dip in its stock despite surpassing revenue expectations, the real story might be hidden in the fine print of its earnings report.

Sherwin-Williams stock declined on Tuesday after it reported its second-quarter results. The American paints and coatings company reported quarterly adjusted earnings per share of $3.38, below the Wall Street view of $3.81.

Quarterly revenue of $6.31 billion beat the analyst consensus of $6.30 billion.

Also Read: Sherwin-Williams (SHW) Stock Gains On Recent Q1 Earnings Beat, Dividend Hike

Consolidated net sales increased 0.7% in the quarter.

Net sales from stores in the Paint Stores Group that have been open for more than 12 calendar months increased 0.8% in the quarter.

Quarterly gross profit increased to $3.12 billion from $3.06 billion a year ago. Gross margin in the quarter under review expanded to 49.4% from 48.8% a year ago.

The company returned $0.72 billion in cash to shareholders as dividends and repurchased shares of its common stock during the quarter.

Sherwin-Williams exited the quarter with cash and equivalents worth $269.8 million.

Chair and CEO Heidi G. Petz noted Sherwin-Williams executed its disciplined strategy amid a choppy demand environment, delivering gross margin expansion for the 12th straight quarter and keeping consolidated sales within its guidance range. In response to persistent demand softness—which the company expects to continue or worsen in the second half—it accelerated and expanded restructuring efforts, incurring $59 million in pre-tax charges. Progress on its new buildings project also moved faster than expected, leading to $40 million in transition-related costs initially anticipated for the second half.

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The Paint Stores Group saw continued strength in protective and marine sales, which rose by high-single digits for the fourth straight quarter. Residential repaint also posted mid-single-digit gains in a weak market. Meanwhile, commercial, new residential, and property maintenance segments remained under pressure. Consumer Brands Group sales declined due to soft North American DIY demand and unfavorable currency impacts in Latin America, though Europe provided some offset. Performance Coatings Group grew in Europe, Asia, and Latin America, but North American sales lagged. Packaging led the group with double-digit sales growth.

Given weaker-than-expected demand through June and no signs of near-term improvement, Sherwin-Williams revised its full-year guidance downward. The company doubled its restructuring efforts to adapt to a prolonged slowdown but remains committed to its long-term growth strategy. Confident it’s nearing a competitive inflection point, Sherwin-Williams continues investing in customer relationships and market share gains to drive future shareholder returns.

Outlook: Sherwin-Williams expects third-quarter revenue to be up or down a low-single-digit percentage compared to the third quarter of 2024.

The company lowered its 2025 adjusted EPS guidance to $11.20-$11.50 (prior $11.65-$12.05), compared to the $11.88 analyst consensus estimate.

It expects consolidated net sales to be up or down by a low single-digit percentage compared to full-year 2024 (prior low single-digit percentage range).

Sherwin-Williams lowered 2025 GAAP EPS guidance to $10.11-$10.41 (prior $10.70-$11.10) versus $11.09 analyst consensus estimate.

SHW Price Action: Sherwin-Williams shares were down 3.62% at $328.95 during premarket trading on Tuesday, according to Benzinga Pro.

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