Analyst Note| Brian Bernard, CFA, CPA |
Narrow-moat Sherwin-Williams reported solid second-quarter results that were in line with our expectations. Revenue increased 16.9% year over year to $5.4 billion, as demand in almost all of its end markets remained strong. That said, Sherwin faced increased inflationary pressure as raw material costs rose higher than management had initially anticipated. Supply chain disruptions and constraints also affected prices in the quarter. Sherwin was able to pass most of the cost increases to the consumer through pricing action and said it is prepared to do more in the second half of the year. Management cautioned that it believes the third quarter of 2021 will have the highest year-over-year inflation increase.