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.