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Sherwin-Williams Cuts Q3 View After Hurricanes Affect Stores
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The Sherwin-Williams Company (SHW - Free Report) has lowered its profit outlook for the third quarter of 2017 to reflect the impact of Hurricanes Harvey, Irma and Maria on its operations in Texas, Florida, the Caribbean and neighboring areas as well as disruptions from two earthquakes in Mexico.
The paint giant noted that the hurricanes affected more than 600 stores while 40 locations in the Caribbean still remain closed. Sherwin-Williams operates 706 paint stores across Texas, Florida and the Caribbean and has 145 company-operated stores and 387 dedicated dealers in Mexico.
As a result of the disruptions, Sherwin-Williams envisions third-quarter revenues in its Americas Group unit to be reduced by a range of $50-70 million.
The company also sees its third quarter sales and profit to be hurt by lost sales days, costs associated with the clean-up and recovery initiatives and tightened supply of certain raw materials.
Factoring in the impacts of hurricanes and earthquakes, Sherwin-Williams now expects its core net sales will rise by a low single digit clip year over year in the third quarter compared with its earlier view of a low to mid-single digit percentage increase.
At this expected sales level, the company now sees earnings for the third quarter to be in the band of $3.40 to $3.70 per share, down from its earlier view of $3.70 to $4.10 per share. The revised outlook includes a $1.10 per share charge associated with the Valspar acquisition and a 40-60 cents per share increase from Valspar operations.
The company noted that it expects the sales momentum it is witnessing in most geographies, especially in the company-operated stores in the unaffected regions of the United States and Canada, to allow it to recover some of the third-quarter earnings shortfall over the remainder of 2017.
The company plans to issue its full-year outlook when it reports third-quarter earnings on Oct 24.
Shares of Sherwin-Williams have moved up 33.2% year to date, outperforming the industry’s 25% gain.
Sherwin-Williams currently carries a Zacks Rank #4 (Sell).
Kraton has expected earnings growth of 7.2% for the current year.
Koppers has expected long-term earnings growth of 18%.
Orion Engineered Carbons has expected earnings growth of 19% for the current year.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Sherwin-Williams Cuts Q3 View After Hurricanes Affect Stores
The Sherwin-Williams Company (SHW - Free Report) has lowered its profit outlook for the third quarter of 2017 to reflect the impact of Hurricanes Harvey, Irma and Maria on its operations in Texas, Florida, the Caribbean and neighboring areas as well as disruptions from two earthquakes in Mexico.
The paint giant noted that the hurricanes affected more than 600 stores while 40 locations in the Caribbean still remain closed. Sherwin-Williams operates 706 paint stores across Texas, Florida and the Caribbean and has 145 company-operated stores and 387 dedicated dealers in Mexico.
As a result of the disruptions, Sherwin-Williams envisions third-quarter revenues in its Americas Group unit to be reduced by a range of $50-70 million.
The company also sees its third quarter sales and profit to be hurt by lost sales days, costs associated with the clean-up and recovery initiatives and tightened supply of certain raw materials.
Factoring in the impacts of hurricanes and earthquakes, Sherwin-Williams now expects its core net sales will rise by a low single digit clip year over year in the third quarter compared with its earlier view of a low to mid-single digit percentage increase.
At this expected sales level, the company now sees earnings for the third quarter to be in the band of $3.40 to $3.70 per share, down from its earlier view of $3.70 to $4.10 per share. The revised outlook includes a $1.10 per share charge associated with the Valspar acquisition and a 40-60 cents per share increase from Valspar operations.
The company noted that it expects the sales momentum it is witnessing in most geographies, especially in the company-operated stores in the unaffected regions of the United States and Canada, to allow it to recover some of the third-quarter earnings shortfall over the remainder of 2017.
The company plans to issue its full-year outlook when it reports third-quarter earnings on Oct 24.
Shares of Sherwin-Williams have moved up 33.2% year to date, outperforming the industry’s 25% gain.
Sherwin-Williams currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Better-ranked stocks in the basic materials space include Kraton Corporation , Koppers Holdings Inc. (KOP - Free Report) and Orion Engineered Carbons, S.A. (OEC - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kraton has expected earnings growth of 7.2% for the current year.
Koppers has expected long-term earnings growth of 18%.
Orion Engineered Carbons has expected earnings growth of 19% for the current year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>