Raw Material Cost Outlook
Q: What's the outlook for raw material costs and impact on margins?
A: Management expects raw material costs to be down low single digits for the year. " The first quarter saw a mid-single-digit year-over-year decrease, benefiting from lower costs in monomer, resin, and solvents. " They anticipate the biggest benefit in Q1, with modest declines in Q2 and costs flattening in the second half. "

Market Share Gains and Spending
Q: Have spending plans evolved to drive market share gains?
A: Spending plans remain unchanged, focusing on accelerating share gains, particularly in residential repaint. " The company is investing in sales efforts, leveraging their database of painting contractors to target new accounts strategically. " Management believes capturing greater market share is not a matter of if, but when. "

Impact of Competitor Closures
Q: Will you consider acquiring stores from competitors exiting the market?
A: Management does not plan to acquire competitor stores. " Instead, they see competitor exits as an opportunity to gain customers without a cash outlay. " They're focused on demonstrating their consistent and reliable value proposition to attract former customers of competitors. "

SG&A Investments and Margins
Q: Will SG&A investments continue if the market doesn't improve?
A: The company will not pull back on SG&A investments, even if the market doesn't improve. " They're confident in their strategy and are making focused investments where they have differentiation. " As sales improve, they expect to start seeing leverage on SG&A into 2025 and 2026. "

Free Cash Flow and Debt Repayment
Q: How are you balancing buybacks versus debt paydown?
A: Management expects total debt to remain flat in 2024 and plans to refinance $1.1 billion of maturing debt, likely at higher rates. " They will continue their disciplined capital allocation strategy, prioritizing CapEx, dividends (which increased over 18% in Q1), and share buybacks. " They aim to reach a 2 to 2.5 debt-to-EBITDA ratio by year-end. "

Margins in Consumer Brands Group
Q: What's affecting margins in the Consumer Brands Group?
A: Margins were primarily impacted by lower volumes and higher fixed costs in manufacturing and distribution. " " Benefits from moderating raw material costs and price increases were offset by these factors. " " Management expects improvements as global supply chain efficiencies continue. "

Volume Outlook in Key Segments
Q: What's the volume outlook for key segments?
A: For the first half, volumes are expected to be down low single digits, with full-year guidance of flat to up low single digits. " Protective & Marine is anticipated to grow faster than the Architectural segment. " Management sees upside in segments like packaging, automotive refinish, and coil coatings due to new business wins and market trends. "

Pricing in Performance Coatings
Q: What's the pricing outlook in Performance Coatings?
A: Management expects continued pricing actions to offset raw material costs and support margins. " While acknowledging that some indices may roll off, they are focused on targeted price increases. "

Second Half Outlook
Q: Will Paint Stores Group sales improve in the second half?
A: Management expects the second half to show mid-single-digit growth in the Paint Stores Group. " " They believe volume improvements will lead to positive segment profit growth in subsequent quarters. "

Acquisition Opportunities
Q: Are multiples for bolt-on acquisitions decreasing?
A: In uncertain environments, multiples start to decline. " The company is actively pursuing bolt-on acquisitions that fit their strategy, particularly in Industrial Coatings. " They are confident in their balance sheet to make acquisitions when the time is right. "

New National Account Wins
Q: Is winning 56 new exclusive national accounts significant?
A: Management considers these 56 new account wins to be material. " They demonstrate Sherwin-Williams' unique ability to service contractors, both in new residential and property maintenance. " The company's footprint, expertise, and local support differentiate them in the market. "

Impact of Weather on Results
Q: Did weather affect first-quarter results, and can delays be recovered?
A: Weather was a factor but not an excuse for softer-than-anticipated exterior sales. " Some delayed activities may be made up in the second quarter or later in the year. " Management remains confident in their strategy and investments driving above-market growth. "

SG&A Growth Due to Investments
Q: How much is wage inflation versus other growth investments affecting SG&A?
A: Wage inflation is impacting SG&A by a low single-digit percentage. " The first quarter reflects annualization of accelerated growth investments made in the second half of last year. " SG&A is expected to increase mid-single digits for the full year, leveling out in the second half. "

Potential Benefits from Competitor's Strategy
Q: Can you capitalize on competitors' strategic reviews in architectural business?
A: Management sees competitor challenges as an opportunity to win customers without acquisitions. " They are focused on reinforcing their consistent and reliable value proposition to attract those customers. " They do not plan to purchase competitor stores. "

SG&A Leverage in Future Years
Q: Will SG&A grow slower than sales in the future?
A: As sales improve, management expects to see SG&A leverage into 2025 and 2026. " They are focused on growing operating margin through gross margin expansion and SG&A leverage. " They remain committed to their investment strategy to drive growth. "