| Metric [Unit: USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Paint Stores Group         | N/A     | **2,859.1**  **[0000089800-23-000014_shw-20230331.htm:25]**  | **3,498.0**  **[0000089800-23-000023_shwearningsrelease2q2023.htm:1]**  | **3,537.1**  **[0000089800-23-000031_shw-20230930.htm:29]**  | N/A     | **2,873.0**  **[0000089800-24-000084_shwearningsrelease1q2024.htm:1]**  | **3,619.9**  **[0000089800-24-000105_shw-20240630.htm:32]**  | **3,650.2**  **[0000089800-24-000155_shwearningsrelease3q2024.htm:1]**  |
| Consumer Brands Group      | N/A     | **872.7**  **[0000089800-23-000014_shw-20230331.htm:25]**    | N/A     | **854.8**  **[0000089800-23-000031_shw-20230930.htm:29]**  | N/A     | **811.0**  **[0000089800-24-000084_shwearningsrelease1q2024.htm:1]**    | **844.3**  **[0000089800-24-000105_shw-20240630.htm:32]**    | **790.5**  **[0000089800-24-000155_shwearningsrelease3q2024.htm:1]**    |
| Performance Coatings Group | N/A     | **1,709.8**  **[0000089800-23-000014_shw-20230331.htm:25]**  | N/A     | **1,724.2**  **[0000089800-23-000031_shw-20230930.htm:29]**  | N/A     | **1,681.9**  **[0000089800-24-000084_shwearningsrelease1q2024.htm:1]**  | **1,806.4**  **[0000089800-24-000105_shw-20240630.htm:32]**  | **1,720.0**  **[0000089800-24-000155_shwearningsrelease3q2024.htm:1]**  |
| Total Consolidated Sales   | N/A     | **5,442.4**  **[0000089800-23-000014_shw-20230331.htm:25]**  | **6,241.0**  **[0000089800-23-000023_shwearningsrelease2q2023.htm:1]**  | **6,116.7**  **[0000089800-23-000031_shw-20230930.htm:29]**  | N/A     | **5,367.3**  **[0000089800-24-000084_shwearningsrelease1q2024.htm:1]**  | **6,271.5**  **[0000089800-24-000105_shw-20240630.htm:32]**  | **6,162.5**  **[0000089800-24-000155_shwearningsrelease3q2024.htm:1]**  |

c8dfc797d4bdc5b3d491a013fa3a0735723182804c9bdb571104d88ed7beff5b

f1fb343a52863fe2a383758e6df95c58f1109587c074db12fba13eedf668240f

- **Sherwin-Williams expects to outperform the market in the Residential Repaint segment due to targeted investments and strong pent-up housing demand.** They anticipate continued **mid single-digit growth** or better in Residential Repaint in 2025, driven by their focus on partnering with contractors and providing innovative solutions that improve productivity.  **[SHW_3413754_7]** **[SHW_3413754_19]** **[SHW_3413754_9]**
- **The company is well-positioned to gain market share from competitors' dislocations and through new account wins.** They are capitalizing on opportunities arising from PPG's sale and focusing aggressively on new accounts, particularly in the **coil and packaging** segments, where they have significant new business wins and expect continued growth, including converting customers to **non-BPA coatings by 2026** to comply with European mandates.  **[SHW_3413754_7]** **[SHW_3413754_19]** **[SHW_3413754_9]**
- **Sherwin-Williams is effectively managing costs and expects gross margin expansion in 2025, driven by pricing actions, cost efficiencies, and supply chain improvements.** Despite raw material inflation in low single digits, they are implementing **price increases** and continuing simplification and efficiency initiatives. The company expects gross margin expansion to be stronger in the second half of the year, with the Paint Stores Group contributing significantly as their largest and highest gross margin segment.  **[SHW_3413754_3]** **[SHW_3413754_5]** **[SHW_3413754_22]**

89ba4eb9c9f1d21e080f237a8ff056868a21cad04cecb52850cab7b1c77b6f6f

- The prolonged **'softer for longer' demand environment**, with several end markets not expected to improve until **2026**, could negatively impact Sherwin-Williams' sales growth, especially in **commercial**, **new residential**, and **DIY** segments, leading to potential underperformance versus expectations.  **[SHW_3413754_2]** **[SHW_3413754_10]**
- **Increased interest expenses** due to refinancing debt at higher rates (including **$850 million** in 2024 and approximately **$1 billion** expected in 2025), along with higher **SG&A expenses** from new building operations (**$80 million**), and **non-operating costs** returning to historic levels may pressure Sherwin-Williams' net income and **EPS growth**, hindering profitability improvements.  **[SHW_3413754_3]** **[SHW_3413754_14]**
- Expected rise in **raw material costs** due to tariffs on Asian epoxy imports and increases in key commodities like **industrial resins**, **TiO2**, **solvents**, and **packaging**, coupled with potential additional tariffs not included in the company's guidance, may compress gross margins more than anticipated if the company cannot fully pass these costs to customers through price increases.  **[SHW_3413754_3]** **[SHW_3413754_5]**

6044c99991c77ce71b03437a5afc7867f890527db885e966124617e8cff35722

1. **CapEx Guidance and Investments**  
   **Q:** Is the $200 million building spend due to higher HQ costs? Why is CapEx higher?  
   **A:** The $200 million is for finishing our R&D center and headquarters; we'll get reimbursed for a portion but it all sits in CapEx. This is the **last year** for CapEx on new buildings.  **[SHW_3413754_11]**  Excluding that, our core CapEx remains at our target of **2% of sales** long term.  **[SHW_3413754_11]**  In 2025, we're investing in additional architectural capacity in our Statesville factory due to confidence in our long-term growth initiatives.  **[SHW_3413754_11]**  We're also investing in warehouse automation to improve efficiencies.  **[SHW_3413754_11]** 

2. **Raw Material Cost Increases and Tariffs**  
   **Q:** What's driving the rise in raw material expenses? Are tariffs a factor?  
   **A:** We are seeing inflation of **low single digits** in the raw material basket, related to industrial resins, TiO₂, solvents, and packaging.  **[SHW_3413754_5]**  Tariffs on Asian imports of epoxy, introduced last year, are embedded in costs.  **[SHW_3413754_5]**  Potential additional tariffs are not in our guidance yet.  **[SHW_3413754_5]**  Suppliers' capacity rationalization and plant decommissioning are putting upward pressure on prices.  **[SHW_3413754_5]**  Natural gas prices are also trending upwards.  **[SHW_3413754_5]** 

3. **$80 Million New Headquarters Expense and Environmental Spending**  
   **Q:** What is driving the $80 million incremental cost for the new headquarters? Is environmental spending increasing?  
   **A:** About **25%** of the $80 million are transition costs like moving and decommissioning old buildings.  **[SHW_3413754_6]**  Our old headquarters was fully depreciated, so the new facility brings new costs like depreciation and service expenses.  **[SHW_3413754_6]**  We'll refine these estimates as we occupy the building.  **[SHW_3413754_6]**  Environmental spending is returning to normal levels after one-time credits last year; we don't expect these credits to repeat.  **[SHW_3413754_6]** 

4. **Share Gain Opportunities from PPG Sale and Kelly-Moore**  
   **Q:** How do you view the share gain opportunity relative to PPG's business and Kelly-Moore?  
   **A:** We can't share specific numbers, but the Kelly-Moore integration has been positive, particularly in residential repaint.  **[SHW_3413754_7]**  Regarding the PPG sale, it's a ripe opportunity; we're focused on quality sales and targeting customers who value our offerings.  **[SHW_3413754_7]**  We're aggressively positioning ourselves across key segments like property management, commercial, and new residential.  **[SHW_3413754_7]** 

5. **Optimism in Paint Store Group End Markets**  
   **Q:** What's driving your optimism in residential repaint markets?  
   **A:** We're moderately optimistic and aggressively partnering with contractors to help them grow their businesses.  **[SHW_3413754_8]**  This includes marketing support, lead generation, and tools to help them be more profitable.  **[SHW_3413754_8]**  We expect demand to improve as the year progresses, with sales guidance up or down **low single digits** in the first half, and up **low to mid-single digits** in the second half.  **[SHW_3413754_8]**  Our Paint Stores Group is expected to be at or above the high end of those ranges.  **[SHW_3413754_8]** 

6. **Growth Opportunities in 2025 and 2026**  
   **Q:** What are your top growth opportunities in 2025 and 2026?  
   **A:** We expect to outperform in residential repaint by bringing innovative, premium products that enhance contractor productivity and margins.  **[SHW_3413754_9]**  This leads to favorable **mix benefits**.  **[SHW_3413754_9]**  We're also focusing on new accounts and business wins in our coil and packaging segments, despite market headwinds.  **[SHW_3413754_9]** 

7. **Non-Residential Outlook**  
   **Q:** Do you expect non-residential sales to be down all of 2025?  
   **A:** It's possible we'll have positive comps later in the year if macro factors like interest rates improve.  **[SHW_3413754_10]**  We expect commercial to drop in the second half but are aggressively pursuing new opportunities to mitigate this.  **[SHW_3413754_10]**  We're not immune to macro slowdown but are working to offset it with growth in other segments like property maintenance and accelerating residential repaint.  **[SHW_3413754_10]** 

8. **Capital Allocation and Sustainable CapEx**  
   **Q:** Is there a reason why sustainable CapEx should be higher in the next 2–3 years?  
   **A:** No, we expect to maintain our core CapEx at around **2% of sales** long term.  **[SHW_3413754_11]**  The higher CapEx in 2025 is due to one-time investments like the new HQ and R&D center.  **[SHW_3413754_11]**  We're investing in growth initiatives like additional architectural capacity and warehouse automation, which have strong returns.  **[SHW_3413754_11]** 

fd3adb88db84840c15570e927f1cc12ebffd2fff5692395113a782a93c7062f0

Sherwin-Williams anticipates mid single-digit Residential Repaint growth in 2025, with cost controls expanding margins in H2. However, $850M debt refinancing in 2024 and ~$1B in 2025 may constrain EPS. Key watch: capturing share from competitor dislocations.

394951818a709dff7499c067eedc2df2e0d8a6acd21a5016853e8f9836c07048

**Annual guidance for FY 2025:**
- **Adjusted Diluted Net Income Per Share**: $11.65 to $12.05  **[SHW_3413754_3]**  (lowered from 8.7% year-over-year growth  **[SHW_3403197_2]** )  
- **SG&A Expenses**: Low single-digit percentage  **[SHW_3413754_3]**  (lowered from low to mid-single-digit growth  **[SHW_3403197_0]** )  
- **Capital Expenditures**: $900 million  **[SHW_3413754_11]**  (raised from $520 million  **[SHW_3403197_19]** )  
- **Store Openings**: 8,100 new stores  **[SHW_3413754_3]**  (raised from 80 to 100 net new stores  **[SHW_3403197_1]** )  
- **Gross Margin**: Expected to expand  **[SHW_3413754_3]**  (no prior guidance)  
- **Raw Material Costs**: Low single-digit increase  **[SHW_3413754_3]**  (no prior guidance)  
- **Interest Expense**: Projected to rise ($40 million from refinancing at higher rates; $20 million for new headquarters)  **[SHW_3413754_3]**  (no prior guidance)  
- **Debt-to-EBITDA Leverage Ratio**: 2 to 2.5x  **[SHW_3413754_3]**  (no prior guidance)  
- **Environmental Costs**: +$25 million  **[SHW_3413754_3]**  (no prior guidance)  
- **Paint Stores Group Sales**: Low to mid-single-digit growth  **[SHW_3413754_18]**  (no prior guidance)  
- **Dividend**: 10.5% increase to $3.16 per share  **[SHW_3413754_3]**  (no prior guidance)  
- **Earnings Seasonality**: 1Q expected to be smaller, with no full-year update until 2Q  **[SHW_3413754_3]**  (no prior guidance)

b1e0812384184b73bbffa1b2c3c55d5f2f631df3168760997dc07793d10c56b2

5a67584fe82c8b4f9abf05cae6fdef0d3e50e07789d209805656811b08fe147b

8574a6a71fb488887da2c50f0e5229dd3aa2ce78947fee785bf1328e06d30f53

The Sherwin-Williams Company is engaged in the development, manufacture, distribution, and sale of paint, coatings, and related products to professional, industrial, commercial, and retail customers primarily in North and South America, with additional operations in the Caribbean, Europe, Asia, and Australia **[0000089800-24-000033_shw-20231231.htm:3]** **[0000089800-24-000033_shw-20231231.htm:43]**. The company is structured into three main reportable segments: Paint Stores Group, Consumer Brands Group, and Performance Coatings Group **[0000089800-24-000033_shw-20231231.htm:3]** **[0000089800-24-000033_shw-20231231.htm:43]**. Sherwin-Williams sells a variety of products, including architectural paints, stains, varnishes, and industrial coatings **[0000089800-24-000033_shw-20231231.htm:3]** **[0000089800-24-000033_shw-20231231.htm:43]**.

1. **Paint Stores Group** - Operates 4,694 specialty paint stores in the United States, Canada, and the Caribbean, serving architectural and industrial paint contractors and do-it-yourself homeowners. The majority of products sold are manufactured by the Consumer Brands Group **[0000089800-24-000033_shw-20231231.htm:3]** **[0000089800-24-000033_shw-20231231.htm:125]**.

2. **Consumer Brands Group** - Manufactures and distributes a wide range of branded and private-label architectural paints, stains, varnishes, and other products to retailers, including home centers and hardware stores, across North America, Latin America, and Europe. Also operates 318 specialty paint stores in Latin America **[0000089800-24-000033_shw-20231231.htm:4]** **[0000089800-24-000033_shw-20231231.htm:126]**.

3. **Performance Coatings Group** - Develops and sells industrial coatings for various applications, including wood finishing, automotive refinish, and protective and marine coatings. Operates 322 company-operated branches and distributes products through various channels **[0000089800-24-000033_shw-20231231.htm:4]** **[0000089800-24-000033_shw-20231231.htm:127]**.

a36d513e0677c823820f5415c988e970287fb36bbb2f82183a3b59cef846c5b4

1. Given the elevated SG&A investments impacting your operating margins, can you clarify when you expect these investments to translate into significant market share gains and margin expansion, particularly in the Paint Stores Group?

2. With ongoing choppy demand and the DIY market remaining soft, what specific strategies are you implementing to drive growth in the Consumer Brands Group and mitigate the impact of weak existing home sales and inflation?

3. Considering the recent competitive shifts in the industry, such as moves by Kelly Moore and PPG, how is Sherwin-Williams positioning itself to capitalize on these changes, and are there specific market share opportunities you are targeting?

4. In light of potential headwinds from increased feedstock costs, especially in propylene and epoxy resins, how do you anticipate these raw material price fluctuations will affect your gross margins, and what strategies do you have to manage these cost pressures?

5. Given the challenges in your Refinish business due to lower insurance claims and consumers' reluctance to pay deductibles, do you view this issue as structural or temporary, and what measures are you taking to offset these pressures and drive growth in this segment?

639afb6d8a547312e9dbfedb8584adacdea67369807146a4e21ab6c17ac6f524

2236cf4c8b47e7420c6bb7f7c71a4bdf6931ad1037a5102d98040336f8e749fb

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024 and FY 2024
- **Guidance**:
  1. **Full Year Diluted Net Income Per Share**: Adjusted growth of **8.7%** over the prior year at the midpoint  **[SHW_3403197_2]** .
  2. **Fourth Quarter 2024**: Expect margin improvement in all operating segments, with a seasonal slowdown in architectural sales  **[SHW_3403197_11]** .
  3. **Full Year 2024**: Maintaining EPS guidance with a wider range due to demand recovery variables  **[SHW_3403197_0]** .
  4. **Capital Expenditures**: Approximately **$520 million**, around 2% of sales  **[SHW_3403197_19]** .
  5. **Price Increase**: 5% increase effective January 6, 2025  **[SHW_3403197_4]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024 and FY 2024
- **Guidance**:
  1. **Consolidated Sales**: Up a **low single-digit percentage** for FY 2024  **[SHW_3393953_2]** .
  2. **Segment Sales**: Unchanged for Paint Stores and Performance Coatings; reduced for Consumer Brands  **[SHW_3393953_2]** .
  3. **Earnings Per Share (EPS)**: Adjusted range of **$11.10 to $11.40** per share  **[SHW_3393953_2]** .
  4. **Raw Material Costs**: Down **low single digits** for the year  **[SHW_3393953_22]** .
  5. **Volume and Price**: Up low single digits for Paint Stores; flat pricing and down high single digits in volume for Consumer Brands  **[SHW_3393953_12]** .
  6. **Foreign Exchange (FX)**: Headwind of about **1.5%**  **[SHW_3393953_12]** .
  7. **Acquisitions and Divestitures**: Acquisitions as a tailwind, divestitures not material  **[SHW_3393953_12]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024 and FY 2024
- **Guidance**:
  1. **Consolidated and Segment Sales**: Unchanged from January guidance  **[SHW_3380269_3]** .
  2. **Earnings Per Share (EPS)**: Unchanged from January guidance  **[SHW_3380269_3]** .
  3. **Raw Material Costs**: No changes from January guidance  **[SHW_3380269_3]** .
  4. **Volume Guidance**: Up or down low single digits for Q2; flat to up low single digits for FY  **[SHW_3380269_10]** .
  5. **SG&A Expenses**: Up mid-single-digit percentage for FY, higher in the first half  **[SHW_3380269_13]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Sales Growth**: Up by a **low to mid-single-digit percentage**  **[SHW_3370814_3]** .
  2. **Diluted Net Income per Share**: Range of **$10.05 to $10.55**; adjusted range of **$10.85 to $11.35**  **[SHW_3370814_3]** .
  3. **Gross Margin**: Expected expansion, more significant in the first half  **[SHW_3370814_22]** .
  4. **SG&A Expenses**: Increase by a mid-single-digit percentage  **[SHW_3370814_3]** .
  5. **Raw Material Costs**: Down by a low single-digit percentage  **[SHW_3370814_3]** .
  6. **Store Openings**: Plan to open **80 to 100 new stores**  **[SHW_3370814_3]** .
  7. **Dividend**: Increase of **18.2% to $2.86 per share**  **[SHW_3370814_3]** .

63e6ad1d9bed9eac246385b3b979f7ee35cbfaaa9c2817583363d823b6d5b005

- Akzo Nobel N.V.  **[0000089800-24-000033_shw-20231231.htm:42]** 
- Axalta Coating Systems Ltd.  **[0000089800-24-000033_shw-20231231.htm:42]** 
- BASF SE  **[0000089800-24-000033_shw-20231231.htm:42]** 
- Genuine Parts Company  **[0000089800-24-000033_shw-20231231.htm:42]** 
- H.B. Fuller Company  **[0000089800-24-000033_shw-20231231.htm:42]** 
- The Home Depot, Inc.  **[0000089800-24-000033_shw-20231231.htm:42]** 
- Lowe’s Companies, Inc.  **[0000089800-24-000033_shw-20231231.htm:42]** 
- Masco Corporation  **[0000089800-24-000033_shw-20231231.htm:42]** 
- Newell Brands Inc.  **[0000089800-24-000033_shw-20231231.htm:42]** 
- PPG Industries, Inc.  **[0000089800-24-000033_shw-20231231.htm:42]** 
- RPM International Inc.  **[0000089800-24-000033_shw-20231231.htm:42]** 
- Stanley Black & Decker, Inc.  **[0000089800-24-000033_shw-20231231.htm:42]** 

ed1918f3b38a6f7486477f44496df4754d6f152f41a9e090f35367e770ff79e9

ecabb75db6d8d328fca5815227993305468b76a77eadc5e9473b2e8fe33ec8f6

Paint Stores Group

The Americas Group

Consumer Brands Group

Performance Coatings Group

Consumer Group

Global Finishes Group

Latin America Coatings Group

Administrative

Total Revenue

806d8a9bff5910d69d758fb9ad68ac1c8b0c2a372f6ef2453573715e2b5ae14a

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

North America

EMEAI

Other Global Regions

Consolidated Foreign Subsidiaries

Domestic Operations

753ec8a1b89481b1dbd53444220f4f21c30b3dab435353a11cccb45e9a5bab2f

| Name             | Position                                                                 | Start Date       | Short Bio                                                                                                                                                                                                 |
|------------------|--------------------------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| John G. Morikis  | Executive Chairman, Director (retiring effective December 31, 2024)      | January 2024     | John G. Morikis has been with Sherwin-Williams since **1984**. He served as CEO from **January 2016** to **January 2024** and as Chairman since **January 2017**. He became Executive Chairman in **January 2024**  **[0001193125-24-060015_d608274ddef14a.htm:28]** **[0000089800-24-000033_shw-20231231.htm:40]** **[0001193125-24-060015_d608274ddef14a.htm:36]** **[0001193125-24-258598_d872214dex991.htm:1]** .               |
| Heidi G. Petz    | President, Chief Executive Officer, Director, and Chair of the Board (effective January 1, 2025) | January 2024     | Heidi G. Petz joined Sherwin-Williams in **June 2017** through the Valspar acquisition. She has held various leadership roles and became President and CEO on **January 1, 2024**. She will be Chair of the Board effective **January 1, 2025**  **[0001193125-24-060015_d608274ddef14a.htm:28]** **[0000089800-24-000033_shw-20231231.htm:40]** **[0001193125-24-258598_d872214d8k.htm:1]** **[0001193125-24-258598_d872214dex991.htm:1]** . |
| Allen J. Mistysyn| Senior Vice President – Finance and Chief Financial Officer               | January 2017     | Allen J. Mistysyn has served as Senior Vice President – Finance and CFO since **January 2017**. He began his career with Sherwin-Williams in **June 1990**  **[0000089800-24-000033_shw-20231231.htm:40]** **[0001193125-24-060015_d608274ddef14a.htm:36]** .                                                                              |
| Jane M. Cronin   | Senior Vice President – Enterprise Finance                               | July 2022        | Jane M. Cronin has been with Sherwin-Williams since **September 1989**. She served as Senior Vice President – Corporate Controller from October 2016 to July 2022 before her current role  **[0000089800-24-000033_shw-20231231.htm:40]** **[0000089800-23-000007_shw-20221231.htm:34]** .                                               |
| Mary L. Garceau  | Senior Vice President – Chief Legal Officer and Secretary                 | February 2024    | Mary L. Garceau has been with Sherwin-Williams since **February 2014**. She served as Senior Vice President, General Counsel and Secretary from August 2017 to February 2024 before her current role  **[0000089800-24-000033_shw-20231231.htm:40]** **[0000089800-23-000007_shw-20221231.htm:34]** .                                     |
| James R. Jaye    | Senior Vice President – Investor Relations and Corporate Communications   | June 2019        | James R. Jaye has been with Sherwin-Williams since **October 2017**. He served as Vice President – Investor Relations from October 2017 to June 2019 before his current role  **[0000089800-24-000033_shw-20231231.htm:40]** **[0000089800-23-000007_shw-20221231.htm:34]** .                                                            |
| Gregory P. Sofish| Senior Vice President – Human Resources                                   | January 2023     | Gregory P. Sofish has been with Sherwin-Williams since **September 1996**. He served as Vice President, Total Rewards from August 2019 to January 2023 before his current role  **[0000089800-24-000033_shw-20231231.htm:40]** **[0000089800-23-000007_shw-20221231.htm:34]** .                                                          |
| Bryan J. Young   | Senior Vice President – Corporate Strategy and Development                | March 2021       | Bryan J. Young joined Sherwin-Williams in **June 2017** through the Valspar acquisition. He served as Vice President – Corporate Strategy and Development from June 2017 to March 2021 before his current role  **[0000089800-24-000033_shw-20231231.htm:41]** **[0000089800-24-000033_shw-20231231.htm:40]** .                           |
| Justin T. Binns  | President, Global Architectural                                           | January 2024     | Justin T. Binns has been with Sherwin-Williams since **August 1997**. He served as President, Paint Stores Group from March 2022 to January 2024 before his current role  **[0001193125-24-060015_d608274ddef14a.htm:36]** **[0000089800-24-000033_shw-20231231.htm:41]** .                                                                |
| Karl J. Jorgenrud| President, Global Industrial                                              | January 2024     | Karl J. Jorgenrud joined Sherwin-Williams in **June 2017** through the Valspar acquisition. He served as President, Performance Coatings Group from March 2022 to January 2024 before his current role  **[0001193125-24-060015_d608274ddef14a.htm:36]** **[0000089800-24-000033_shw-20231231.htm:41]** .                                   |
| Todd D. Rea      | President, Consumer Brands Group                                          | November 2021    | Todd D. Rea has been with Sherwin-Williams since **April 1993**. He served as President of North America Sales within the Consumer Brands Group from November 2020 to November 2021 before his current role  **[0000089800-24-000033_shw-20231231.htm:41]** **[0000089800-23-000007_shw-20221231.htm:35]** .                              |
| Colin M. Davie   | President & General Manager, Global Supply Chain Division, Consumer Brands Group | January 2024     | Colin M. Davie joined Sherwin-Williams in **June 2017** through the Valspar acquisition. He served as Senior Vice President and Chief Procurement Officer from March 2022 to January 2024 before his current role  **[0000089800-24-000033_shw-20231231.htm:41]** .                           |
| J. Paul Lang     | Senior Vice President – Enterprise Finance & Chief Accounting Officer (effective January 1, 2025) | January 1, 2025  | J. Paul Lang has been with Sherwin-Williams since **February 2018**. He served as Vice President – Enterprise Finance, Reporting & Controls since May 2022 before his upcoming role as Chief Accounting Officer  **[0001193125-24-258598_d872214d8k.htm:1]** .                             |

9d90912ce5cd0a69c8b5d18790fe923959c686779c21e2a1f65f9e831c492759

| Program Details           | Program 1       |
|---------------------------|-----------------|
| Approval Date             | N/A             |
| End Date/Duration         | N/A             |
| Total additional amount   | N/A             |
| Remaining authorization   | **35.3 million shares**  **[0000089800-24-000157_shw-20240930.htm:20]** **[0000089800-24-000157_shw-20240930.htm:43]**  |
| Details                   | Repurchased **1,250,000 shares** at an average price of **$358.96** per share during Q3 2024.  **[0000089800-24-000157_shw-20240930.htm:52]**  |

39c3fb88e4b4615d1a7c9788171728872d3d0639ad4e14e89bb41c3773da02da

**Quarterly guidance for Q4 2024:**
- **Margin improvement**: Expect improvement in all operating segments, with a seasonal slowdown in architectural sales  **[SHW_3403197_11]** (no prior guidance)

**Annual guidance for FY 2024:**
- **Full Year Diluted Net Income Per Share (EPS)**: Adjusted growth of 8.7% over the prior year at the midpoint  **[SHW_3403197_2]** , maintaining EPS guidance with a wider range  **[SHW_3403197_0]** (no change from prior $11.10–$11.40  **[SHW_3393953_2]** )  
- **Capital expenditures**: Approximately $520 million (around 2% of sales)  **[SHW_3403197_19]** (no prior guidance)  
- **Price increase**: 5% increase effective January 6, 2025  **[SHW_3403197_4]** (no prior guidance)

f144d0e8f55b112d472bac861f96dbd3ccd30f41f776e0a92d5ad434dd98b958

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 1908  **[0000089800-24-000033_shw-20231231.htm:73]**    | Present  | Current auditor   |

06dc5cd33442fb34a4f88f76f8ca1db7564e4a68d1178011fbfc9c09bff33f2e

36424d655729e8a72588cb97db3fc358ebdd9d50d8341e211882b13829ab121b

- Total Revenue: $6,162.5 million  **[0000089800-24-000157_shw-20240930.htm:1]** **[0000089800-24-000157_shw-20240930.htm:28]** **[0000089800-24-000157_shw-20240930.htm:33]** **[0000089800-24-000157_shw-20240930.htm:29]**  (+1% YoY vs. $6,116.7 million  **[0000089800-23-000031_shw-20230930.htm:1]** **[0000089800-23-000031_shw-20230930.htm:34]** )  
- Paint Stores Group: $3,650.2 million  **[0000089800-24-000157_shw-20240930.htm:28]**  (+3% YoY vs. $3,537.1 million  **[0000089800-23-000031_shw-20230930.htm:29]** )  
- **Consumer Brands Group: $790.5 million  **[0000089800-24-000157_shw-20240930.htm:28]**  (-8% YoY vs. $854.8 million  **[0000089800-23-000031_shw-20230930.htm:29]** )**  
- **Operating Income (EBIT): $919.4 million  **[0000089800-24-000157_shw-20240930.htm:1]** **[0000089800-24-000157_shw-20240930.htm:33]**  (+66% YoY vs. $553.4 million  **[0000089800-23-000031_shw-20230930.htm:1]** **[0000089800-23-000031_shw-20230930.htm:34]** )**  
- **Net Income: $806.2 million  **[0000089800-24-000157_shw-20240930.htm:1]** **[0000089800-24-000157_shw-20240930.htm:28]** **[0000089800-24-000157_shw-20240930.htm:33]** **[0000089800-24-000157_shw-20240930.htm:29]**  (+6% YoY vs. $761.5 million  **[0000089800-23-000031_shw-20230930.htm:1]** **[0000089800-23-000031_shw-20230930.htm:34]** )**  
- **Diluted EPS: $3.18  **[0000089800-24-000157_shw-20240930.htm:1]** **[0000089800-24-000157_shw-20240930.htm:28]** **[0000089800-24-000157_shw-20240930.htm:33]** **[0000089800-24-000157_shw-20240930.htm:29]**  (+8% YoY vs. $2.94  **[0000089800-23-000031_shw-20230930.htm:1]** )**  
- **SG&A: $1,893.7 million  **[0000089800-24-000157_shw-20240930.htm:1]** **[0000089800-24-000157_shw-20240930.htm:28]** **[0000089800-24-000157_shw-20240930.htm:33]** **[0000089800-24-000157_shw-20240930.htm:29]**  (+8% YoY vs. $1,756.5 million  **[0000089800-23-000031_shw-20230930.htm:1]** **[0000089800-23-000031_shw-20230930.htm:34]** )**  
- **D&A: $155.6 million  **[0000089800-24-000157_shw-20240930.htm:3]**  (-7% YoY vs. $168 million  **[0000089800-23-000031_shw-20230930.htm:3]** )**  

421ae8fe33fbc86e2480fc5d003971bf763741fcb1750a0037366d0dfa7e0850

d9aeace840bd26436662b717b268fdf5e6de4fe9b6cc16b98f59af6ef1d2f032

| Year | Amount Due (in millions) | Debt Type              | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|----------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2024     | $904.0 **[0000089800-24-000157_shw-20240930.htm:10]**               | Domestic Commercial Paper  | 5.2 **[0000089800-24-000157_shw-20240930.htm:10]**           | 8.9% = ($904.0M / $10,139.7M) * 100 **[0000089800-24-000157_shw-20240930.htm:10]** **[0000089800-24-000157_shw-20240930.htm:9]**                               |
| 2024     | $11.5 **[0000089800-24-000157_shw-20240930.htm:10]**                | Foreign Facilities         | 3.4 **[0000089800-24-000157_shw-20240930.htm:10]**           | 0.1% = ($11.5M / $10,139.7M) * 100 **[0000089800-24-000157_shw-20240930.htm:10]** **[0000089800-24-000157_shw-20240930.htm:9]**                                |
| 2028     | $400.0 **[0000089800-24-000157_shw-20240930.htm:9]**               | 4.55% Senior Notes         | 4.55 **[0000089800-24-000157_shw-20240930.htm:9]**          | 3.9% = ($400.0M / $10,139.7M) * 100 **[0000089800-24-000157_shw-20240930.htm:9]**                                       |
| 2031     | $450.0 **[0000089800-24-000157_shw-20240930.htm:9]**               | 4.80% Senior Notes         | 4.80 **[0000089800-24-000157_shw-20240930.htm:9]**          | 4.4% = ($450.0M / $10,139.7M) * 100 **[0000089800-24-000157_shw-20240930.htm:9]**                                       |

756bfdeba5a6075647ac7ec48d964980732194cbb7a9c5626830c7254ca15591

- **Sherwin-Williams is gaining market share** due to competitor closures like the Kelly-Moore stores on the West Coast, where the company was historically underpenetrated. They are already serving some of Kelly-Moore's former customers and expect to gain continued share by being **"very aggressive"**.  **[SHW_3380269_21]**
- The company has secured **56 new exclusive national account agreements** in the Paint Stores Group, primarily in new residential and property maintenance sectors. This is considered **"material"** and demonstrates Sherwin-Williams' unique ability to serve contractors through their specialty paint stores.  **[SHW_3380269_5]**
- **Market share gains in multiple segments**: Sherwin-Williams is taking share in the **automotive refinish** segment, with installed base up **double digits in North America**. They attribute this to their unique technology and service offerings. Additionally, they have achieved **significant new business wins in coil coatings** in North America.  **[SHW_3380269_10]**

350e755b46a44de491877f89f9e4a940a4cc0090d7112f4dada5ba8d2a9e1eac

- **Challenges in the Refinish business due to lower insurance claims, down double digits in North America**, impacting sales and masking share gains. Management is not satisfied with year-to-date numbers.  **[SHW_3403197_15]**
- **Continued softness in the DIY market** is negatively affecting the Consumer Brands Group, with sales decreasing by high single digits. The market remains weak due to pressure from inflation and existing home sales.  **[SHW_3403197_6]**
- **Increased SG&A expenses are constraining margins** in the Paint Stores Group, with segment margin decreasing to **24.5%**, due to higher investments in growth initiatives and unfavorable mix.  **[SHW_3403197_17]**

5bfe7f6d9e03a08156ee747dbdbc55712f39463e14a39874def7eedd083d2572

1. **Share Gain Opportunities**  
   **Q:** How will competitor changes impact your market share gains?  
   **A:** We are confident in taking more than our fair share of opportunities arising from competitors like Kelly-Moore exiting the market.  **[SHW_3393953_5]**  For instance, in the Southwest, we have seen significant share gains where competitors have closed their doors.  **[SHW_3393953_6]**  This has contributed to our residential repaint segment being up **mid-single digits** in a down market.  **[SHW_3393953_5]** 

2. **Residential Repaint Performance**  
   **Q:** Can you discuss the sustainability of share gains in residential repaint?  
   **A:** Our residential repaint segment continues to post **mid-single-digit growth** despite a down market.  **[SHW_3393953_3]** **[SHW_3393953_5]**  Investments we've made are paying off, and we expect this momentum to continue due to significant market share opportunities.  **[SHW_3393953_3]** **[SHW_3393953_5]** 

3. **Capital Expenditure Outlook**  
   **Q:** Will normal CapEx be under $500 million after current expansions?  
   **A:** We target capital expenditures below **2% of sales** after completing major projects.  **[SHW_3393953_6]**  While we may need to add capacity in high-growth areas, we expect to maintain disciplined capital allocation, supporting growth and returning cash to shareholders through dividends and share repurchases.  **[SHW_3393953_6]** 

4. **Gross Margin Expectations**  
   **Q:** What are your gross margin prospects for the second half?  
   **A:** We anticipate continued **gross margin expansion** in the second half, driven by moderating raw material costs, better price realization, and favorable mix from our Paint Stores Group.  **[SHW_3393953_7]** **[SHW_3393953_8]**  While the raw material tailwind may be less pronounced, we remain confident in our margin outlook.  **[SHW_3393953_7]** 

5. **DIY Market Weakness**  
   **Q:** Why is the DIY market underperforming, and how does it affect you?  
   **A:** The DIY market faces pressure from inflation, depleted savings, and increased household debt, leading to softer demand.  **[SHW_3393953_11]** **[SHW_3393953_12]**  This impacts our Consumer Brands Group, but we're focusing on strategic partnerships and are confident we'll return to above-market growth as conditions improve.  **[SHW_3393953_11]** 

6. **Raw Material Costs**  
   **Q:** How are raw material costs trending, and what's the expectation?  
   **A:** In Q2, our raw material basket was down **mid-single digits** year-over-year.  **[SHW_3393953_22]**  For the full year, we expect raw materials to be down **low single digits**, with the second half being relatively flat compared to last year.  **[SHW_3393953_22]** 

7. **Regional Performance**  
   **Q:** How did different regions perform in your Paint Stores Group?  
   **A:** Our Southwest division led performance this quarter, benefiting from competitor exits in the area.  **[SHW_3393953_6]**  This has contributed to our share gains and overall growth in that region.  **[SHW_3393953_6]** 

8. **Performance Coatings Outlook**  
   **Q:** What's the outlook for key Performance Coatings verticals?  
   **A:** We're gaining share in segments like packaging and coil, delivering customized solutions and seeing positive signs.  **[SHW_3393953_10]**  In industrial wood, we're building on a good foundation despite market choppiness.  **[SHW_3393953_10]** 

9. **Impact of Weather on Paint Stores**  
   **Q:** Did weather conditions affect your Paint Stores performance?  
   **A:** While we faced some weather-related challenges, we remain focused on controllables and continue to take market share, posting growth in residential repaint despite the down market.  **[SHW_3393953_3]** 

10. **Capital Allocation Priorities**  
    **Q:** What are your capital allocation priorities moving forward?  
    **A:** After completing major projects, we'll target CapEx below **2% of sales**, maintain dividends at approximately **30% of prior EPS**, and use excess cash for share repurchases, absent acquisitions.  **[SHW_3393953_6]** 

76e06438d2906a30819632afdc503f7d660be05ca73c98e4ee31f3243ca46a92

- The company is experiencing **weakness in the DIY market**, described as **"choppy"** with uncertain outlook, potentially impacting the Consumer Brands Group performance.  **[SHW_3370814_14]**
- Management anticipates that **raw material cost benefits will be minimal in 2024**, with raw materials expected to decrease by only **"low single-digit percentages,"** compared to double-digit decreases in 2023, which may limit **gross margin expansion**.  **[SHW_3370814_7]** ,  **[SHW_3370814_15]**
- There is **"choppiness in demand across different segments"** and regions, leading to uncertainty in **volume growth**, which management acknowledges is the **"single biggest driver of operating margin and leverage";** this variability introduces risk to achieving earnings targets.  **[SHW_3370814_11]**

be66b0213f4a1b0a3a148b65897d89d634381888b249b7aa5398d62be06266ce

- **Sherwin-Williams is gaining market share across multiple segments, including New Residential and Property Management**, by securing new agreements even during challenging times, positioning the company strongly for future growth as housing starts accelerate.  **[SHW_3370814_19]**
- **The exit of competitor Kelly-Moore presents a significant opportunity**, and Sherwin-Williams is aggressively pursuing this to capture additional market share on the West Coast.  **[SHW_3370814_21]**
- **The company is outperforming the market in the Pros Who Paint segment**, taking share and growing faster than the market, with expectations for this trend to continue into 2024.  **[SHW_3370814_13]**

dd828adf39169952ab3022561b1c57e5d86a38ecd5e4049948932ebea1347320

- **Sherwin-Williams is gaining market share due to competitor disruptions**, especially in the Southwest division where competitors like Kelly-Moore have closed operations, leading to increased sales and share gains on the West Coast.  **[SHW_3393953_5]** ,  **[SHW_3393953_6]**
- **Investments in key growth areas such as Residential Repaint and Automotive Refinish are yielding strong returns**, with mid-single-digit growth in Residential Repaint over the last three quarters in a down market, and significant upside potential due to a robust backlog and strategic positioning.  **[SHW_3393953_5]** ,  **[SHW_3393953_15]**
- **Performance Coatings Group is experiencing share gains across multiple divisions**, including Packaging (gaining share outside the U.S.), Coil Coatings (winning and taking share through excellent execution), Automotive Refinish (taking share with record high installations), and Industrial Wood (positioned for potential tailwinds from new residential improvements).  **[SHW_3393953_10]**

91dc8bf0eff9718cf35627426b3f6f123cc5cefc55e543cc58d028414868fa29

- **The company's Pro Paints business had a challenging first quarter, performing **below expectations** due to softer demand and choppiness in the market.**  **[SHW_3380269_14]** ,  **[SHW_3380269_4]**
- **Margins in the Paint Stores Group were negatively impacted primarily due to **lower volumes**, which is a significant driver of operating margin leverage for the company.**  **[SHW_3380269_19]** ,  **[SHW_3380269_15]**
- **Higher SG&A expenses, up about **6% year-over-year**, are putting pressure on profitability, with expected mid-single-digit increases impacting the first half due to accelerated growth investments that have not yet annualized.**  **[SHW_3380269_13]**

e077b413f0a92a8bc897d4d4e617549661c3b9ab71d238808df6d4501b0b395a

- **Strong growth in the Packaging segment**: Sherwin-Williams reported that **Q3 sales in Packaging were up high single digits**, driven entirely by volume, with **volume up low double digits**. The company expects **very strong performance in the fourth quarter leading into next year**, supported by the expansion of their **Tournus France plant** and the acquisition of **Henkel's metal packaging business**. These strategic moves position them well for industry changes like the upcoming **EFSA ban on BPA**.  **[SHW_3403197_15]** ,  **[SHW_3403197_2]**
- **Strategic investments leading to market share gains**: The company is capitalizing on a **unique moment in the industry** by investing ahead of the curve while competitors are distracted. Sherwin-Williams focuses on being **consistent, reliable, and dependable**, which is attracting customers and leading to share gains, particularly in **Refinish** and **Residential Repaint**, where they've seen the **fifth consecutive quarter of mid-single-digit growth** in a flat market.  **[SHW_3403197_15]** ,  **[SHW_3403197_6]** ,  **[SHW_3403197_8]** ,  **[SHW_3403197_1]**
- **Well-positioned for anticipated demand recovery**: Anticipating an improvement in remodeling demand as indicators like **LIRA** begin to rise, Sherwin-Williams is confident that its proactive investments and customer-focused solutions will allow it to **outperform the market** when demand becomes more robust.  **[SHW_3403197_8]** ,  **[SHW_3403197_1]**

cae3412270568aa0fe7a70106f98694d8458e3f8c2719d4991db95aa75e49751

1. **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.  **[SHW_3380269_6]**  The first quarter saw a **mid-single-digit** year-over-year decrease, benefiting from lower costs in monomer, resin, and solvents.  **[SHW_3380269_6]**  They anticipate the biggest benefit in Q1, with modest declines in Q2 and costs flattening in the second half.  **[SHW_3380269_6]** 

2. **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.  **[SHW_3380269_7]**  The company is investing in sales efforts, leveraging their database of painting contractors to target new accounts strategically.  **[SHW_3380269_7]**  Management believes capturing greater market share is not a matter of if, but when.  **[SHW_3380269_7]** 

3. **Impact of Competitor Closures**  
   **Q:** Will you consider acquiring stores from competitors exiting the market?  
   **A:** Management does not plan to acquire competitor stores.  **[SHW_3380269_9]**  Instead, they see competitor exits as an opportunity to gain customers without a cash outlay.  **[SHW_3380269_9]**  They're focused on demonstrating their consistent and reliable value proposition to attract former customers of competitors.  **[SHW_3380269_9]** 

4. **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.  **[SHW_3380269_24]**  They're confident in their strategy and are making focused investments where they have differentiation.  **[SHW_3380269_24]**  As sales improve, they expect to start seeing leverage on SG&A into 2025 and 2026.  **[SHW_3380269_24]** 

5. **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.  **[SHW_3380269_12]**  They will continue their disciplined capital allocation strategy, prioritizing CapEx, dividends (which increased over **18%** in Q1), and share buybacks.  **[SHW_3380269_12]**  They aim to reach a **2 to 2.5** debt-to-EBITDA ratio by year-end.  **[SHW_3380269_12]** 

6. **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.  **[SHW_3380269_15]** **[SHW_3380269_4]**  Benefits from moderating raw material costs and price increases were offset by these factors.  **[SHW_3380269_4]** **[SHW_3380269_15]**  Management expects improvements as global supply chain efficiencies continue.  **[SHW_3380269_4]** 

7. **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**.  **[SHW_3380269_10]**  Protective & Marine is anticipated to grow faster than the Architectural segment.  **[SHW_3380269_17]**  Management sees upside in segments like packaging, automotive refinish, and coil coatings due to new business wins and market trends.  **[SHW_3380269_10]** 

8. **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.  **[SHW_3380269_10]**  While acknowledging that some indices may roll off, they are focused on targeted price increases.  **[SHW_3380269_10]** 

9. **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.  **[SHW_3380269_16]** **[SHW_3380269_22]**  They believe volume improvements will lead to positive segment profit growth in subsequent quarters.  **[SHW_3380269_16]** 

10. **Acquisition Opportunities**  
    **Q:** Are multiples for bolt-on acquisitions decreasing?  
    **A:** In uncertain environments, multiples start to decline.  **[SHW_3380269_23]**  The company is actively pursuing bolt-on acquisitions that fit their strategy, particularly in Industrial Coatings.  **[SHW_3380269_23]**  They are confident in their balance sheet to make acquisitions when the time is right.  **[SHW_3380269_23]** 

11. **New National Account Wins**  
    **Q:** Is winning 56 new exclusive national accounts significant?  
    **A:** Management considers these 56 new account wins to be material.  **[SHW_3380269_5]**  They demonstrate Sherwin-Williams' unique ability to service contractors, both in new residential and property maintenance.  **[SHW_3380269_5]**  The company's footprint, expertise, and local support differentiate them in the market.  **[SHW_3380269_5]** 

12. **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.  **[SHW_3380269_4]**  Some delayed activities may be made up in the second quarter or later in the year.  **[SHW_3380269_4]**  Management remains confident in their strategy and investments driving above-market growth.  **[SHW_3380269_4]** 

13. **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**.  **[SHW_3380269_13]**  The first quarter reflects annualization of accelerated growth investments made in the second half of last year.  **[SHW_3380269_13]**  SG&A is expected to increase **mid-single digits** for the full year, leveling out in the second half.  **[SHW_3380269_13]** 

14. **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.  **[SHW_3380269_9]**  They are focused on reinforcing their consistent and reliable value proposition to attract those customers.  **[SHW_3380269_9]**  They do not plan to purchase competitor stores.  **[SHW_3380269_9]** 

15. **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**.  **[SHW_3380269_24]**  They are focused on growing operating margin through gross margin expansion and SG&A leverage.  **[SHW_3380269_24]**  They remain committed to their investment strategy to drive growth.  **[SHW_3380269_24]** 

3d10a5f0c3da5d9c30c6c5e37e4f7dba367e3dec0c155f35267cadf9d75cdbb1

- **Sherwin-Williams expects volume declines in its Consumer Brands Group, projecting sales to be down high single to low double digits in the second half of 2024.**  **[SHW_3393953_12]**  This is due to continued softness in the North American DIY market, with consumers facing headwinds such as inflation and household debt.  **[SHW_3393953_21]**
- **The company's gross margin improvements may not be sustainable, as raw material tailwinds are expected to diminish in the second half, with raw material costs forecasted to be flat year-over-year.** Allen Mistysyn stated that "the raw material tailwind won't be as high" in the second half.  **[SHW_3393953_22]** **[SHW_3393953_7]**
- **Management declined to provide specific guidance on longer-term gross margins, which could indicate uncertainty about future profitability improvements.** When asked about longer-term gross margin opportunity, Allen Mistysyn responded, "we're not going to talk to that specifically that long-term target today."  **[SHW_3393953_4]**

a461200e05e4c1646f4d877630cffc14c48d221015689c6eb28922a78e490c58

1. **Pricing Dynamics & Outlook**  
   **Q:** What are the pricing dynamics for 2024 and 2025?  
   **A:** SHW announced a **5% price increase**, effective January 6.  **[SHW_3403197_4]**  This aims to offset **higher feedstock costs**, **wage inflation**, and **significantly higher healthcare expenses**.  **[SHW_3403197_4]**  They expect to achieve **50% to 60%** price realization, influenced by timing of national account contracts and competitive dynamics.  **[SHW_3403197_4]** 

2. **SG&A Investments & Margins**  
   **Q:** How will SG&A spend impact margins and growth?  
   **A:** SHW increased SG&A in Q3 to invest in long-term strategies and widen their competitive moat.  **[SHW_3403197_3]**  They are confident these investments will yield returns and view this as the ideal time to invest ahead of market recovery.  **[SHW_3403197_3]**  SG&A is expected to **moderate next year**, with an eye on operating margin expansion as volumes grow.  **[SHW_3403197_11]** **[SHW_3403197_17]** 

3. **Competitive Landscape & Market Share**  
   **Q:** What are the opportunities from competitors' changes?  
   **A:** SHW sees opportunities from competitors' shifts, such as PPG and Kelly-Moore.  **[SHW_3403197_6]** **[SHW_3403197_7]**  They focus on capturing **quality sales** in premium segments, not commodities.  **[SHW_3403197_7]**  Kelly-Moore is viewed as a short-term share gain, while PPG represents a long-term opportunity.  **[SHW_3403197_7]**  They're committed to earning and retaining valuable customers over time.  **[SHW_3403197_7]** 

4. **Raw Materials Cost Trends**  
   **Q:** How are raw material costs impacting SHW?  
   **A:** Raw materials were **flattish year-over-year** in Q3 and expected to remain so in Q4.  **[SHW_3403197_12]**  **Propylene costs** increased **almost 50%** year-over-year due to supply outages.  **[SHW_3403197_12]**  **TiO2 supply** is readily available with stable pricing.  **[SHW_3403197_12]**  Overall, raw materials are expected to be down **low single digits** for the year.  **[SHW_3403197_12]** 

5. **Remodeling Demand Outlook**  
   **Q:** What is the outlook for remodeling demand?  
   **A:** SHW is optimistic about a **resurgence in home renovation**, aligning with their long-term view.  **[SHW_3403197_8]**  Indicators like LIRA are expected to tick up in the **second or third quarter of next year**.  **[SHW_3403197_8]**  They anticipate solid performance in their residential repaint business, benefiting from current investments.  **[SHW_3403197_8]** 

6. **Impact of Hurricanes on Guidance**  
   **Q:** What is the hurricane impact on Q3 and Q4?  
   **A:** Hurricanes reduced Q3 sales by less than **one point** and impacted earnings by about **$0.05 per share**.  **[SHW_3403197_9]**  Recovery in Q4 is uncertain due to the time it takes customers to resume activities.  **[SHW_3403197_9]**  This adds variability to their Q4 outlook.  **[SHW_3403197_9]** 

7. **Refinish and Packaging Businesses**  
   **Q:** What is the outlook for Refinish and Packaging businesses?  
   **A:** Refinish sales are **down low single digits** year-to-date, affected by **double-digit declines in claims**.  **[SHW_3403197_15]**  SHW expects improving claims and share gains to be tailwinds next year.  **[SHW_3403197_15]**  Packaging sales were **up high single digits** in Q3, with volume up **low double digits**.  **[SHW_3403197_15]**  Strong performance is expected in Q4 and over the next 12 months.  **[SHW_3403197_15]** 

8. **CapEx Guidance Explanation**  
   **Q:** What's happening with CapEx versus guidance?  
   **A:** Year-to-date CapEx includes **$415 million** for new headquarters, with reimbursements reducing net CapEx to about **$200 million**.  **[SHW_3403197_19]**  Core CapEx stands at **$355 million**, aligning with their guidance of **$520 million**, around **2% of sales**.  **[SHW_3403197_19]** 

9. **First Half 2025 Outlook**  
   **Q:** Is first half 2025 outlook a continuation of current trends?  
   **A:** SHW expects the first half of next year to remain **choppy**, continuing the trends seen in the back half of 2024.  **[SHW_3403197_21]** 

10. **SG&A Leverage Strategy**  
    **Q:** How is SHW thinking about SG&A leverage?  
    **A:** SHW is managing SG&A tightly, focusing on selling investments that drive productivity and growth.  **[SHW_3403197_22]**  They aim to achieve SG&A leverage as macro demand improves and volumes increase.  **[SHW_3403197_22]** 

11. **Balancing Growth and Margins**  
    **Q:** How is SHW balancing investments and operating margin expansion?  
    **A:** SHW focuses on driving operating margin by balancing gross margin expansion and prudent SG&A management.  **[SHW_3403197_23]**  They invest strategically now to accelerate growth when demand returns, expecting higher operating margins in the future.  **[SHW_3403197_23]** 

efb2642d4d68db85594f54d6968998f0dc2c96c4b41d904400e9df5bca9e3d8a

1. **Raw Material Cost Outlook**  
   **Q:** Will raw materials be down mid-single digits next year?  
   **A:** Sherwin-Williams expects raw material costs to be down **low single digits** in 2024, with about **85%** of that benefit occurring in the first half. They are not assuming another material drop in costs as the year progresses, basing their outlook on current indicators.  **[SHW_3370814_7]** ,  **[SHW_3370814_22]** 

2. **SG&A Expense Increase**  
   **Q:** What's driving the SG&A jump and its impact?  
   **A:** Approximately **70%** of the adjusted SG&A increase is attributed to operating segments, mainly the Paint Stores Group, due to adding **76 new stores** and additional reps. The remaining increase is from compensation, including stock-based comp. These costs will annualize in the first half of next year, and the company expects to return to more typical SG&A investments in 2024.  **[SHW_3370814_6]** 

3. **Pricing Actions and Implementation**  
   **Q:** How will the 5% price increase be realized?  
   **A:** The 5% price increase effective February 1 is expected to have a rollout similar to past increases, reaching similar effectiveness with consolidated price up **low single digits**. The increase addresses prior cost inflation, including wages, and is essential to continue offering differentiated services and solutions.  **[SHW_3370814_9]** ,  **[SHW_3370814_22]** 

4. **Residential Repaint Volume Outlook**  
   **Q:** What's the expectation for residential repaint growth in 2024?  
   **A:** The residential repaint market is expected to be **flat**, but Sherwin-Williams anticipates **mid-single-digit volume growth** by taking market share through investments and focusing on contractor partnerships. They don't see downside risk and are confident in their ability to outpace the market.  **[SHW_3370814_8]** ,  **[SHW_3370814_17]** 

5. **Gross Margin Expansion Drivers**  
   **Q:** How will volume, price, raws, and mix affect margin expansion?  
   **A:** Volume, particularly in pro architectural sales, is the primary driver of gross margin expansion. In 2024, price will have a greater impact than raw materials, and focusing on higher-margin segments will contribute to improved margins.  **[SHW_3370814_15]** ,  **[SHW_3370814_22]** 

6. **Potential Share Gains from Competitor's Exit**  
   **Q:** Does Kelly-Moore's exit present a share gain opportunity?  
   **A:** Yes, Kelly-Moore's exit creates a **void** that Sherwin-Williams sees as an opportunity, especially on the West Coast. They plan to be **very competitive** and aggressive in capturing that market share.  **[SHW_3370814_21]** 

7. **Under-absorption and Supply Chain Normalization**  
   **Q:** Will under-absorption impacts reverse in 2024?  
   **A:** Sherwin-Williams expects to return to a **normalized production schedule** in 2024, allowing for more efficient plant operations. This should lead to improved performance and help reverse the under-absorption impacts experienced in 2023.  **[SHW_3370814_12]** 

8. **Mix Shift Opportunities**  
   **Q:** Which markets offer the greatest ability to drive mix shift?  
   **A:** There's significant opportunity in **residential repaint** to drive mix improvement by focusing on premium products that enhance contractor productivity and profitability. Contractors are receptive to higher-quality products that save time and labor costs.  **[SHW_3370814_16]** ,  **[SHW_3370814_24]** 

9. **EPS Outlook Variability**  
   **Q:** What could offset expected EPS growth despite sales guidance?  
   **A:** **Volume** is the biggest variable affecting earnings. Choppiness in demand across segments and regions could impact operating margins and leverage. Better-than-expected volume would lead to higher EPS than currently guided.  **[SHW_3370814_11]** 

10. **New Residential Market Timing**  
    **Q:** What's the lag between housing starts and paint sales?  
    **A:** The typical lag between a housing start and the paint sale has extended from about **4 months to 6 months** due to factors like labor shortages. Improved new single-family starts will likely result in stronger sales in the second half as projects reach completion.  **[SHW_3370814_23]** 

11. **Property Maintenance Segment Decline**  
    **Q:** What's causing the decline in property maintenance?  
    **A:** Property maintenance was down **low single digits** in the quarter due to tough comparisons but was up **mid to high single digits** for the year. The company is positioned to benefit from upgrading properties and expects to continue taking share.  **[SHW_3370814_10]** 

12. **DIY Market Weakness**  
    **Q:** Why is DIY weak in both Paint Stores and Consumer Brands?  
    **A:** In Paint Stores, DIY caters to a unique, higher-end customer and represents a small portion of business, especially during this time of year. In Consumer Brands, the DIY market is **choppy**, and the company is working closely with retail partners to strengthen this segment.  **[SHW_3370814_14]** 

13. **Contractor Backlogs and Remodel Activity**  
    **Q:** What's the update on contractor backlogs and remodel activity?  
    **A:** Contractor backlogs and repair and remodel activity are **normalizing**. Visibility is limited, but the current state is stable, and more information will be available in the next quarter or two.  **[SHW_3370814_25]** 

14. **Customer Order Patterns into Spring Season**  
    **Q:** What are expectations around customer orders into the spring paint season?  
    **A:** Expectations are for a **normal** seasonal improvement. Alignment and partnership with retail customers have never been better, and the company anticipates normal order patterns into the spring season.  **[SHW_3370814_13]** 

15. **CEO's Perspective and Strategy**  
    **Q:** Do you bring a different perspective as the new CEO?  
    **A:** While sharing common values with the previous CEO, Heidi Petz brings different perspectives due to her background. She believes in the company's strategy and aims to build on the strong foundation, continuing to drive growth and strengthen the model.  **[SHW_3370814_18]** 

16. **Magnitude of Share Gains and PSG Guidance**  
    **Q:** Can you help us understand the magnitude of share gains in Paint Stores Group?  
    **A:** The company is taking share across segments, including New Residential and Property Management, by securing incremental agreements even in challenging times. They expect Paint Stores Group to be at the upper end of sales guidance, driven by share gains.  **[SHW_3370814_19]** 

17. **SG&A Leverage Outlook**  
    **Q:** Will SG&A leverage return to positive in the future?  
    **A:** The company expects SG&A leverage to improve as the market normalizes and demand increases, leading to positive leverage in future years like 2025 and 2026. They will continue investing strategically to drive long-term growth.  **[SHW_3370814_20]** 

18. **Paint Stores Group Top Line Guidance**  
    **Q:** What's anticipated from growth investments in Paint Stores Group?  
    **A:** Significant investments in segments like residential repaint are expected to drive share gains and volume growth. The company is posting **mid-single-digit gallon gains** and believes no one is better positioned to help contractors grow their businesses.  **[SHW_3370814_5]** 

19. **Feedback on Price Increase and Mix Experience**  
    **Q:** What's the feedback on the price increase and any mix shifts?  
    **A:** Conversations with customers about the price increase focus on ensuring they understand the reasons and are prepared to pass it along. There's an emphasis on **premium products**, and contractors are adopting higher-quality products for efficiency and profitability.  **[SHW_3370814_24]** 

20. **Underperformance in DIY Segment**  
    **Q:** Can you contrast the reasons for DIY weakness in both segments?  
    **A:** In Paint Stores, DIY is a smaller, higher-end segment and is particularly small during this time of year. In Consumer Brands, the DIY market is **choppy**, and the company is aligning closely with retail partners to address challenges and opportunities.  **[SHW_3370814_14]** 

4e1ea9043b6b4aed3fd2c8a2b7b755c9522f32cc957999f317807da974ace55e

Sherwin-Williams Co (SHW)

Financials