SHERWIN WILLIAMS CO (SHW) Q1 2025 Earnings Summary

Executive Summary

Q1 2025 delivered modest topline pressure but margin-driven earnings strength: net sales fell 1.1% to $5.31B, while diluted EPS rose 1.5% to $2.00 and adjusted diluted EPS rose 3.7% to $2.25, supported by gross margin expansion to 48.2% and strong cost discipline .
Versus Street consensus, SHW posted an EPS beat and a revenue miss: adjusted EPS $2.25 vs $2.16*, revenue $5.31B vs $5.41B*, with EBITDA modestly above consensus ($917.7M vs $910.9M*) .
Guidance was reaffirmed: FY25 diluted EPS $10.70–$11.10 and adjusted EPS $11.65–$12.05; Q2 net sales expected up or down low-single digits; tax rate “low twenties” .
Key call themes: pricing effectiveness in PSG, persistent DIY softness, PCG mix/FX headwinds, tariff monitoring with ability to offset through targeted price and simplification/digitization; confidence in Suvinil (Brazil) acquisition synergies upon 2H close .
Capital deployers should note continued shareholder returns ($552M via dividends and buybacks in Q1), +18 net stores in PSG, and reaffirmed earnings guidance—near-term stock catalysts include margin resilience despite flat sales and updates on tariff impacts and Suvinil close timing .

What Went Well and What Went Wrong

What Went Well

Gross margin expansion and adjusted EPS growth despite choppy demand (Gross margin 48.2%, adjusted EPS +3.7% YoY) .
PSG outperformed: net sales +2.3%, same-store +1.2%, segment margin expanded to 18.4%; strength in protective & marine (high-single digit) and residential repaint (mid-single digit) .
Cost control and simplification/digitization drove efficiencies; management expects adjusted operating margin (gross profit less SG&A) to improve YoY at Q2 midpoint .
- “Sherwin-Williams continued to execute our strategy and delivered solid first quarter results driven by gross margin expansion and good cost control.” — Heidi Petz .

What Went Wrong

Revenue miss vs consensus and segment softness: PCG sales -4.8% (FX drag ~3%) and CBG sales -6.0% (DIY softness, FX ~3%) .
Volume pressure across segments and persistent North American DIY weakness; PCG margins compressed (reported 13.3%, adjusted 16.5%) on lower sales .
Elevated non-operating headwinds expected in Q2 (lack of repeat credits in environmental and asset sales ~$60M YoY headwind) and potential tariff-related raw material cost upticks .

Financial Results

Consolidated performance vs prior periods and consensus

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$6.16	$5.30	$5.31
Diluted EPS ($)	$3.18	$1.90	$2.00
Adjusted Diluted EPS ($)	$3.37	$2.09	$2.25
Gross Margin (%)	49.1%	48.6%	48.2%
EBITDA ($USD Billions)	$1.28	$0.88	$0.92
EPS Consensus Mean* ($)	$3.54*	$2.06*	$2.16*
Revenue Consensus Mean* ($USD Billions)	$6.20*	$5.32*	$5.41*

Values with * retrieved from S&P Global.

Segment breakdown (Q1 2025 vs Q1 2024)

Segment	Q1 2024 Net Sales ($MM)	Q1 2025 Net Sales ($MM)	YoY %	Q1 2024 Segment Profit ($MM)	Q1 2025 Segment Profit ($MM)	Reported Margin Q1 2024	Reported Margin Q1 2025
Paint Stores Group (PSG)	$2,873.0	$2,939.8	+2.3%	$493.2	$541.2	17.2%	18.4%
Consumer Brands Group (CBG)	$811.0	$762.2	-6.0%	$153.4	$131.9	18.9%	17.3%
Performance Coatings Group (PCG)	$1,681.9	$1,602.0	-4.8%	$237.7	$212.7	14.1%	13.3%
Administrative	$1.4	$1.7	nm	$(244.3)	$(232.8)	nm	nm

KPIs and operating metrics

KPI	Q1 2024	Q1 2025
PSG same-store sales change	-0.1%	+1.2%
Adjusted EBITDA ($MM)	$896.2	$937.0
Adjusted EBITDA Margin (%)	16.7% (calc from $896.2/$5,367.3; not disclosed)	17.7%
Capital Expenditures ($MM)	$283.8	$189.3
Cash Dividends ($MM)	$182.5	$200.4
Net Operating Cash (usage) ($MM)	—	$(61.1)
Share Repurchases ($MM)	—	$351.7
PSG net new stores	7	18
PSG total stores	4,701	4,791

Note: Adjusted EBITDA margin percent is explicitly disclosed only for Q1 2025 (17.7%) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Net Sales	Q2 2025	—	Up or down low-single digit % vs Q2 2024	New detail
Consolidated Net Sales	FY 2025	Up low-single digit % vs FY 2024	Up low-single digit % vs FY 2024	Maintained
Diluted EPS	FY 2025	$10.70–$11.10	$10.70–$11.10	Maintained
Adjusted Diluted EPS	FY 2025	$11.65–$12.05	$11.65–$12.05	Maintained
Effective Tax Rate	FY 2025	Low twenties %	Low twenties %	Maintained
Adjusted Operating Margin (gross profit less SG&A)	Q2 2025	—	Expected to improve YoY at midpoint	New detail
Dividend	Q2 2025	—	$0.79 per share payable June 6, 2025	Announced

Management reiterated tariff exposure is manageable given ~80% revenue in U.S. and majority of raw materials sourced regionally .

Earnings Call Themes & Trends

Topic	Q3 2024 (Oct)	Q4 2024 (Jan)	Q1 2025 (Apr)	Trend
Pricing cadence (PSG)	Announced 5% price increase effective Jan 6, 2025	Expect 50–60% effectiveness over next quarter; pricing to offset low-single digit raw inflation	Price effectiveness better earlier; further room to run; targeted increases in other segments	Positive pricing effectiveness; moderating sequential benefit
Raw materials & tariffs	FX and raw pressure; FX ~1% headwind in Q3	Raw basket up low-single digits; Asian epoxy tariffs; potential further tariffs monitored	Raws flat YoY in Q1; tariffs could push raws to high end of low-single digits; ability to offset via price/simplification	Slight inflation risk; offset via levers
DIY demand	Weak; drove CBG declines	No macro catalyst; continued softness expected	Still under pressure; not worsening; partnerships to stimulate demand	Persistent softness
PSG end markets	Protective & marine strong; res repaint mid-single-digit growth; new res up	Res repaint outperformed; new res steady; commercial soft in 2025	P&M high-single-digit; res repaint mid-single-digit; commercial/property maintenance under pressure	PSG mix supportive; commercial soft longer
PCG divisions	Packaging HS D growth; Coil growth; GI softness; FX drag	Packaging growth and coil wins; auto refinish choppy; GI soft	Packaging HS D growth; coil improved in March; GI under pressure; auto refinish impacted by lower insurance claims	Mixed; packaging/coil bright; GI/refinish headwinds
Simplification/digitization	Investing; SG&A to moderate in 2H	Enterprise priorities include simplification/digitization; SG&A growth low-single digits	Demonstrable efficiencies; admin SG&A down mid-teens; continued cost focus	Efficiency tailwind
M&A / Suvinil (Brazil)	—	Guidance provided excluding potential future deals	Suvinil deal expected 2H close; strong LatAm growth potential; excluded from current guidance	Strategic expansion; synergy potential
Macro & housing	Choppy demand; FX; uncertain recovery	Softer-for-longer; many end markets not likely until 2026; LIRA suggests flat growth	Mortgage ~6.5–7%; builders focused on steel/aluminum tariffs; household formations supportive	Gradual normalization; 2H bias

Management Commentary

“Consolidated sales were within our guidance range, led by Paint Stores Group, and we delivered mid-single digit percentage growth in both adjusted diluted net income per share and adjusted EBITDA.” — Heidi Petz .
“We continue to expect demand softness to persist in several end markets well into the second half of the year… we are focused on being a source of stability and reliability for our customers.” — Heidi Petz .
On tariffs and raws: “For ’25, we’re still… raws up a low single-digit percentage… mainly on applicators, pigment and extenders, industrial resins, packaging… the materiality… we can manage.” — Jim Jaye .
On operating efficiencies: “Admin SG&A was down a mid-teens percentage… efficiencies out of the investments in systems.” — Allen Mistysyn .
On Suvinil: “Suvinil is a market leader with multiple profitable growth opportunities… not in the guidance… targeting second half close.” — Heidi Petz; “Architectural coatings growing faster than GDP; Suvinil faster still.” — Jim Jaye .

Q&A Highlights

Pricing vs cost cadence: Management sees further price effectiveness in Q2 in PSG and targeted increases in other segments as needed; ability to offset tariffs through levers including simplification/digitization .
Gross margin drivers: Price increases, PSG mix shift, and supply chain efficiencies lifted margins despite lower volumes; SG&A remained tight while investing in stores and reps .
Outlook for Q2 earnings: While sales are guided flat at midpoint, adjusted operating margin expected to improve YoY at the midpoint; non-operating headwinds (~$60M) likely to pressure EPS .
Residential repaint and new res: Backlogs ~4–6 weeks; res repaint volumes up and share gains in a flat-to-down market; new res incremental partnerships offset macro softness .
PCG commentary: Packaging strong; coil improved in March and expected to grow in FY; GI and auto refinish remain under pressure, with FX impacting refinish .

Estimates Context

Q1 2025: Adjusted EPS beat ($2.25 vs $2.16*), revenue miss ($5.31B vs $5.41B*), EBITDA slight beat ($917.7M vs $910.9M*) .
FY 2025 consensus sits near the midpoint of guidance (EPS $11.37* vs guidance $10.70–$11.10 GAAP / $11.65–$12.05 adjusted), suggesting Street expects continued margin resilience with modest topline growth*.