SHERWIN WILLIAMS CO (SHW) Q3 2025 Earnings Summary

Executive Summary

Q3 revenue $6.36B (+3.2% YoY) and adjusted EPS $3.59 (+6.5% YoY), both above S&P Global consensus; revenue beat by ~$0.16B and adjusted EPS beat by ~$0.15, driven by Paint Stores Group (PSG) strength and cost control . Revenue consensus $6.20B*, EPS consensus $3.44*; actual revenue $6.36B and adjusted EPS $3.59*.
PSG delivered 3.6% same‑store sales growth, segment margin expanded to 24.9%; Consumer Brands Group (CBG) remained soft on DIY, while Performance Coatings Group (PCG) saw margin pressure from unfavorable mix .
FY25 guidance narrowed: diluted EPS $10.16–$10.36 and adjusted diluted EPS $11.25–$11.45; Q4 sales guided up low‑to‑mid single digits; Suvinil acquisition expected to lift Q4 consolidated sales low single digits with an immaterial EPS headwind from one‑time costs .
Management highlighted a “softer for longer” demand backdrop, a 7% PSG price increase effective Jan 1, and aggressive share capture amid unprecedented competitive dynamics—key catalysts for estimate revisions and stock narrative .

What Went Well and What Went Wrong

What Went Well

PSG sales grew in every end market (protective & marine up double digits; residential repaint and commercial up mid single digits), with margin expansion from SG&A leverage and targeted growth investments .
Adjusted EBITDA rose 6% to $1.36B (21.4% of sales), and adjusted EPS increased 6.5% to $3.59; company returned $864M via buybacks and dividends in the quarter .
CEO tone confident on executing in a “unique competitive environment,” emphasizing differentiated solutions and reliability for customers: “We remain confident our approach is the right one to continue winning near‑term…” .

What Went Wrong

PCG adjusted margin fell (16.9% vs 18.0% YoY) as unfavorable product/region mix pressured gross margin; segment profit declined despite volume increases .
CBG sales decreased (-2.6% YoY) on soft North American DIY and Latin America FX; reported margin fell from supply chain inefficiencies tied to lower production volumes and restructuring costs .
Administrative/new building costs and restructuring weighed on results; management reiterated “softer for longer” demand, and temporarily paused 401(k) match to preserve jobs amid uncertainty .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Sales ($USD Billions)	$6.16	$5.31	$6.31	$6.36
Diluted EPS ($)	$3.18	$2.00	$3.00	$3.35
Adjusted Diluted EPS ($)	$3.37	$2.25	$3.38	$3.59
Gross Margin %	49.1%	48.2%	49.4%	49.2%
Net Income ($USD Billions)	$0.81	$0.50	$0.75	$0.83

Segment	Net Sales Q3 2024 ($B)	Net Sales Q3 2025 ($B)	Segment Profit Q3 2024 ($M)	Segment Profit Q3 2025 ($M)	Reported Margin Q3 2024	Reported Margin Q3 2025	Adjusted Profit Q3 2024 ($M)	Adjusted Profit Q3 2025 ($M)	Adjusted Margin Q3 2024	Adjusted Margin Q3 2025
Paint Stores Group (PSG)	$3.65	$3.84	$895.9	$954.3	24.5%	24.9%	—	—	—	—
Consumer Brands Group (CBG)	$0.79	$0.77	$165.5	$157.3	20.9%	20.4%	$181.4	$179.3	22.9%	23.3%
Performance Coatings Group (PCG)	$1.72	$1.75	$259.7	$240.3	15.1%	13.7%	$308.9	$294.9	18.0%	16.9%

KPI	Q3 2024	Q3 2025
PSG Same‑Store Sales Change	2.2%	3.6%
PSG Net New Stores (Quarter)	19	23
PSG Total Stores	4,739	4,834
CBG Total Stores	328	304
Net Operating Cash (9M) ($B)	$2.20	$2.36
Capital Expenditures (Quarter, $M)	235.3	196.4
Dividends (Quarter, $M)	182.5	195.7
Shares Repurchased + Dividends (9M) ($B)	—	$2.13

Q3 2025 Actual vs S&P Global Consensus	Actual	Consensus	Surprise
Revenue ($USD Billions)	$6.36	$6.20*	+$0.16B
Adjusted EPS ($)	$3.59	$3.44*	+$0.15
Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Net Sales	FY 2025	Up or down low‑single digits	Up low‑single digits	Clarified upward bias
Diluted EPS	FY 2025	$10.11–$10.41	$10.16–$10.36	Narrowed
Adjusted Diluted EPS	FY 2025	$11.20–$11.50	$11.25–$11.45	Narrowed
Effective Tax Rate	FY/Q4 2025	Low 20%	Low 20%	Maintained
Q4 Net Sales	Q4 2025	—	Up low‑to‑mid single digits	New
Suvinil Acquisition Impact	Q4 2025	Expected close H2’25	Low single‑digit lift to Q4 sales; immaterial EPS headwind on one‑offs	Implemented (close 10/1)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q1 2025)	Current Period (Q3 2025)	Trend
Demand outlook	“Softer for longer,” potential deterioration in H2; no market help	Choppy; some markets not likely to gain momentum until 2026	“Softer for longer”; minimal catalysts ahead	Stable cautious
Pricing actions	PSG price mix mid‑single digit in Q2; targeted increases across segments	January increase effective; further targeted raises where needed	Announced 7% PSG increase Jan 1; tempered by mix; targeted increases in other segments	More aggressive
Supply chain & production	Supply chain inefficiencies from lower production gallons; fixed cost absorption headwind	Simplification/digitization driving efficiencies	Still managing production/inventory closely; flattish gross margin; SG&A leverage	Improving efficiency, volume constrained
Tariffs/raw materials	2025 raws revised to flattish; petrochemical relief vs tariff‑driven pressures	Raws flat Q1; tariffs lifting certain costs; could prompt targeted price	Initial view ‘26 raws up low single digits inclusive of tariffs	Slight inflation expected
PSG end markets	Protective & marine 4th straight quarter high‑single digit growth; res repaint up mid single digits	Protective & marine up high single digits; res repaint up mid single digits	Protective & marine up low double digits; res repaint up mid single digits; commercial up mid single digits	Continuing strength
PCG divisions	Packaging double‑digit; coil uncertain; auto refinish pressured by lower claims	Packaging bright spot; coil recovering; GI under pressure	Packaging double‑digit; auto refinish mid‑single digit growth, share gains; mix pressure on margins	Mixed improvement, margin pressure
Restructuring/SG&A	Broader/deeper restructuring (target ~$105M costs; ~$80M annual savings); SG&A low single‑digit planned	SG&A down mid‑teens in admin; targeted invests in stores/reps	SG&A moderated to low single digits; ~$40M 2025 savings; ~$80M annualized	Benefits building
Suvinil acquisition	Expected H2 close; strategic LatAm expansion	Announced; strategic rationale, not in guidance	Closed Oct 1; low single‑digit Q4 sales lift; accretive over mid‑term	Executed, integration underway
Technology/digitization	Systems modernization; Pro Plus App benefits; admin SG&A down	Same as prior	Ongoing simplification and self‑help to offset costs	Ongoing

Management Commentary

“Consolidated sales increased at the high‑end of our guided range. Gross margin expanded, and SG&A growth moderated… We grew adjusted EBITDA margin and adjusted diluted earnings per share…” — Heidi G. Petz .
“Protective and marine… increased by low double digits… residential repaint again grew by mid‑single digits… We believe we outperformed the market in all segments that we serve.” — Heidi G. Petz .
“We are narrowing our full year 2025 guidance… Full year 2025 adjusted diluted net income per share is expected to be in the range of $11.25 to $11.45…” — Heidi G. Petz .
“We have announced a 7% price increase in Paint Stores Group effective January 1… tempered by market dynamics and segment mix.” — Al Mistysyn .
“Our goal was to preserve as many jobs as possible… we temporarily pause[d] the company matching contributions to our 401(k)…” — Heidi G. Petz .

Q&A Highlights

7% PSG price increase rationale: cost basket inflation (raws up low single digits in ’26; healthcare up low double digits; wages up low single digits) balanced against aggressive volume/share capture; effectiveness tempered by mix .
Mortgage rate sensitivity: ~6% seen as a catalyst for existing home turnover; affordability remains critical .
Investment efficiency: disciplined store/rep adds with faster profitability even in dense markets; returns evidenced by res repaint growth .
Suvinil integration: expected to increase CBG sales ~low‑20% in Q4; accretive mid‑term with EBITDA moving to high‑teens/low‑20s after synergies .
PCG margin path: Q3 margin decline from mix; expecting moderation and some gross margin expansion in Q4 with disciplined cost control .

Estimates Context

Q3 actuals exceeded S&P Global consensus: revenue $6.36B vs $6.20B* and adjusted EPS $3.59 vs $3.44*; beats driven by PSG same‑store growth and SG&A leverage, partially offset by PCG mix headwinds . Values retrieved from S&P Global.*

Where estimates may adjust: modest increases to FY EPS range midpoint supported by Q3 beat and narrowed guidance; PCG margin trajectory and DIY demand softness likely temper revenue revisions despite Suvinil tailwind .

Key Takeaways for Investors

Quality beat: Strong PSG execution and SG&A control delivered revenue and adjusted EPS beats; continue to expect relative outperformance amid “softer for longer” backdrop .
Pricing/volume balance: 7% PSG price increase for 2026 with management explicitly prioritizing gallons/share; expect price mix realization moderated by segment mix .
PCG watch‑list: Margin pressure from unfavorable mix persists; look for Q4 moderation and 2026 recovery tied to regional/business mix normalization .
Suvinil integration: Near‑term Q4 sales lift with immaterial EPS impact from one‑offs; medium‑term accretive growth/EBITDA expansion within CBG LatAm .
Cash discipline intact: $2.36B YTD operating cash; capex trending down post‑HQ/R&D move; buybacks/dividends remain active .
Guidance credible: FY25 diluted EPS narrowed to $10.16–$10.36; adjusted $11.25–$11.45; Q4 sales up low‑to‑mid single digits with Suvinil addition .
Trading setup: Narrative hinges on price execution, share gains in PSG (res repaint/protective & marine), and visibility on PCG margin mix; monitor DIY and commercial backlogs, mortgage rates near ~6% .