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    Matt Dale • Bank of America

    Matt Dale's questions to Sherwin-Williams Co (SHW) leadership

    Matt Dale's questions to Sherwin-Williams Co (SHW) leadership • Q2 2025

    Question

    Matt Dale from Bank of America questioned why supply chain inefficiencies appeared to be a larger headwind in the quarter and asked about the outlook for fixed cost leverage if business conditions were to deteriorate further.

    Answer

    SVP of Finance & CFO Al Mestyshin explained that production schedules were adjusted downward in Q2 to match lower sales, resulting in lost absorption of fixed costs. For the second half, he noted that these inefficiencies account for about 20% of the expected gross profit reduction, and stressed the company's discipline in managing inventory to match demand.

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    Matt Dale's questions to Sherwin-Williams Co (SHW) leadership • Q2 2025

    Question

    Matt Dale of Bank of America asked for more detail on the supply chain inefficiencies, why they became a larger headwind in Q2, and how to think about fixed cost leverage if demand deteriorates further.

    Answer

    CFO Allen Mistysyn explained that production schedules were adjusted down to match lower sales volumes, which negatively impacted absorption of fixed costs, as manufacturing sites are about 60% fixed. He noted that for the second half, about 20% of the gross profit reduction is due to these inefficiencies, and the company is managing inventory tightly to prevent issues in 2026.

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