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SHW Q3 Earnings Lag Estimates on Higher Costs, Sales Beat
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Key Takeaways
SHW's Q3 adjusted EPS rose 1.1% to $3.63, missing estimates, while sales climbed 7.9% to $6.86 billion.
Suvinil acquisition and pricing gains boosted sales, but higher costs pressured margins.
Sherwin-Williams narrowed its 2026 adjusted EPS outlook amid muted demand and inflationary pressures.
The Sherwin-Williams Company (SHW - Free Report) reported third-quarter 2026 adjusted earnings of $3.63 per share, up 1.1% year over year. The figure missed the Zacks Consensus Estimate of $3.65 by 0.6%. Higher raw material and supply-chain costs weighed on profitability.
Net income (as reported) declined 1.5% to $821 million or $3.38 per share from $833.1 million or $3.35 per share a year ago.
Revenues increased 7.9% year over year to $6.86 billion and surpassed the consensus mark of $6.78 billion by 1.1%. Growth across all three reportable segments, including contributions from the Suvinil acquisition and selling price increases, supported results. Paint Stores Group same-store sales rose 3.9%.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
Paint Stores Group sales increased 4.7% year over year to $4.02 billion. Growth reflected mid-single-digit selling price increases and low-single-digit volume gains. Sales increased across all professional customer end markets, led by double-digit growth in protective and marine, high-single-digit growth in commercial and mid-single-digit growth in residential repaint.
Paint Stores Group profit rose 2.1% to $974.3 million from $954.3 million. Higher sales supported profitability, partly offset by rising raw material and supply-chain costs and investments in additional sales representatives and stores. Reported segment margin declined to 24.3% from 24.9%.
Consumer Brands Group sales jumped 21.7% to $937.4 million from $770.1 million. Growth was driven primarily by the Suvinil acquisition, favorable foreign currency translation and a positive shift in product mix. Soft demand in North America partly offset these gains.
Consumer Brands Group profit declined 7.1% to $146.2 million from $157.3 million. Higher raw material and supply-chain costs, incremental Suvinil-related SG&A expenses and unfavorable currency transaction effects weighed on results. Reported segment margin contracted to 15.6% from 20.4%, while adjusted segment profit fell 4.4% to $171.4 million.
Performance Coatings Group sales increased 8.8% year over year to $1.9 billion. Mid-single-digit selling price increases and low-single-digit volume growth supported results. General Industrial, Packaging and Coil recorded double-digit sales growth, while Industrial Wood and Automotive Refinish posted low-single-digit gains.
Performance Coatings Group profit increased 6.2% to $255.2 million from $240.3 million. Higher sales more than offset rising raw material, supply-chain and employee-related costs. Reported segment margin narrowed to 13.4% from 13.7%. Adjusted segment profit advanced 4.7% to $308.7 million, although adjusted margin declined to 16.2% from 16.9%.
SHW's Cash Generation and Balance Sheet Position
Sherwin-Williams generated $2.59 billion in net operating cash flow during the first nine months of 2026. The company returned $2.98 billion to shareholders through dividends and repurchases of 7.1 million common shares during the period.
As of Sept. 30, 2026, cash and cash equivalents totaled $264.2 million. Short-term borrowings stood at $2.35 billion, while long-term debt was $7.94 billion. The company had authorization to repurchase another 22.5 million shares through open-market transactions.
SHW’s Outlook
For the fourth quarter of 2026, Sherwin-Williams expects consolidated net sales to increase by a mid-single-digit percentage year over year. Management anticipates muted underlying demand through the remainder of 2026 and into 2027, based on customer sentiment and leading market indicators.
For full-year 2026, the company maintained its net sales growth forecast in the mid- to high-single-digit range. Reported earnings are projected at $10.92-$11.22 per share, compared with the prior guidance of $10.92-$11.32.
Adjusted earnings are now expected at $11.85-$12.15 per share, narrowed from the previous projection of $11.80-$12.20. The revised outlook reflects management's continued focus on pricing discipline, cost reductions and profitable growth amid inflationary pressures and subdued market demand.
SHW’s Price Performance
Shares of Sherwin-Williams have lost 5.4% over the past year against the Zacks Chemicals Specialty industry’s 6.3% growth.
Image Source: Zacks Investment Research
SHW’s Zacks Rank & Key Picks
SHW currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the basic materials space include Green Plains Inc. (GPRE - Free Report) , Perimeter Solutions, Inc. (PRM - Free Report) and Avient Corporation (AVNT - Free Report) .
Green Plains is scheduled to report third-quarter results on Nov. 5. The Zacks Consensus Estimate for GPRE’s third-quarter earnings is pegged at 76 cents. GPRE sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Perimeter Solutions is slated to report third-quarter results on Nov. 5. The Zacks Consensus Estimate for earnings is pegged at 95 cents per share. PRM carries a Zacks Rank #2 (Buy) at present.
Avient is slated to report third-quarter results on Nov. 4. The consensus estimate for AVNT’s earnings per share is pegged at 81 cents. AVNT presently carries a Zacks Rank #2.
View the Zacks #1 Rank List
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SHW Q3 Earnings Lag Estimates on Higher Costs, Sales Beat
Key Takeaways
The Sherwin-Williams Company (SHW - Free Report) reported third-quarter 2026 adjusted earnings of $3.63 per share, up 1.1% year over year. The figure missed the Zacks Consensus Estimate of $3.65 by 0.6%. Higher raw material and supply-chain costs weighed on profitability.
Net income (as reported) declined 1.5% to $821 million or $3.38 per share from $833.1 million or $3.35 per share a year ago.
Revenues increased 7.9% year over year to $6.86 billion and surpassed the consensus mark of $6.78 billion by 1.1%. Growth across all three reportable segments, including contributions from the Suvinil acquisition and selling price increases, supported results. Paint Stores Group same-store sales rose 3.9%.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
The Sherwin-Williams Company price-consensus-eps-surprise-chart | The Sherwin-Williams Company Quote
Sherwin-Williams' Segment Review
Paint Stores Group sales increased 4.7% year over year to $4.02 billion. Growth reflected mid-single-digit selling price increases and low-single-digit volume gains. Sales increased across all professional customer end markets, led by double-digit growth in protective and marine, high-single-digit growth in commercial and mid-single-digit growth in residential repaint.
Paint Stores Group profit rose 2.1% to $974.3 million from $954.3 million. Higher sales supported profitability, partly offset by rising raw material and supply-chain costs and investments in additional sales representatives and stores. Reported segment margin declined to 24.3% from 24.9%.
Consumer Brands Group sales jumped 21.7% to $937.4 million from $770.1 million. Growth was driven primarily by the Suvinil acquisition, favorable foreign currency translation and a positive shift in product mix. Soft demand in North America partly offset these gains.
Consumer Brands Group profit declined 7.1% to $146.2 million from $157.3 million. Higher raw material and supply-chain costs, incremental Suvinil-related SG&A expenses and unfavorable currency transaction effects weighed on results. Reported segment margin contracted to 15.6% from 20.4%, while adjusted segment profit fell 4.4% to $171.4 million.
Performance Coatings Group sales increased 8.8% year over year to $1.9 billion. Mid-single-digit selling price increases and low-single-digit volume growth supported results. General Industrial, Packaging and Coil recorded double-digit sales growth, while Industrial Wood and Automotive Refinish posted low-single-digit gains.
Performance Coatings Group profit increased 6.2% to $255.2 million from $240.3 million. Higher sales more than offset rising raw material, supply-chain and employee-related costs. Reported segment margin narrowed to 13.4% from 13.7%. Adjusted segment profit advanced 4.7% to $308.7 million, although adjusted margin declined to 16.2% from 16.9%.
SHW's Cash Generation and Balance Sheet Position
Sherwin-Williams generated $2.59 billion in net operating cash flow during the first nine months of 2026. The company returned $2.98 billion to shareholders through dividends and repurchases of 7.1 million common shares during the period.
As of Sept. 30, 2026, cash and cash equivalents totaled $264.2 million. Short-term borrowings stood at $2.35 billion, while long-term debt was $7.94 billion. The company had authorization to repurchase another 22.5 million shares through open-market transactions.
SHW’s Outlook
For the fourth quarter of 2026, Sherwin-Williams expects consolidated net sales to increase by a mid-single-digit percentage year over year. Management anticipates muted underlying demand through the remainder of 2026 and into 2027, based on customer sentiment and leading market indicators.
For full-year 2026, the company maintained its net sales growth forecast in the mid- to high-single-digit range. Reported earnings are projected at $10.92-$11.22 per share, compared with the prior guidance of $10.92-$11.32.
Adjusted earnings are now expected at $11.85-$12.15 per share, narrowed from the previous projection of $11.80-$12.20. The revised outlook reflects management's continued focus on pricing discipline, cost reductions and profitable growth amid inflationary pressures and subdued market demand.
SHW’s Price Performance
Shares of Sherwin-Williams have lost 5.4% over the past year against the Zacks Chemicals Specialty industry’s 6.3% growth.
Image Source: Zacks Investment Research
SHW’s Zacks Rank & Key Picks
SHW currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the basic materials space include Green Plains Inc. (GPRE - Free Report) , Perimeter Solutions, Inc. (PRM - Free Report) and Avient Corporation (AVNT - Free Report) .
Green Plains is scheduled to report third-quarter results on Nov. 5. The Zacks Consensus Estimate for GPRE’s third-quarter earnings is pegged at 76 cents. GPRE sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Perimeter Solutions is slated to report third-quarter results on Nov. 5. The Zacks Consensus Estimate for earnings is pegged at 95 cents per share. PRM carries a Zacks Rank #2 (Buy) at present.
Avient is slated to report third-quarter results on Nov. 4. The consensus estimate for AVNT’s earnings per share is pegged at 81 cents. AVNT presently carries a Zacks Rank #2.