Sherwin-Williams Earnings: Robust Pricing and Resilient Architectural Demand Drive Growth

Sherwin-Williams reported first-quarter results that were largely in line with our expectations as pricing growth more than offset elevated costs. Volume was mixed across Sherwin’s portfolio as strength in residential and professional markets were met with weakness in do-it-yourself, or DIY, and packaging. That said, Sherwin continued to flex its pricing power, with increases in all three segments. Higher operating costs were somewhat offset by moderating materials costs, but both will likely remain a concern for the foreseeable future. Consolidated operating margins expanded almost 300 basis points from a year ago to 13.2%, largely driven by strong pricing. Demand held-up well in the first quarter, but near-term pressure remains amid heightened economic uncertainty. We are maintaining our fair value estimate of $201 per share.