Sherwin-Williams’ consolidated net sales rose 16.7% in the fourth quarter to $1.5 billion and 13.1% percent in 2004 to $6.11 billion. Net sales results include the operations of three acquisitions not yet fully annualized in the fourth quarter of 2004 and the operations of Duron and Paint Sundry Brands, beginning with the month of Sept. 2004, the company said. The acquisitions boosted consolidated net sales by 10% ($128 million) in the fourth quarter and 4.1% ($222.6 million) for the year. Net income rose 16.5% in the fourth quarter to $82.5 million and 18.4% for the full year to $393.3 million.
Net sales of the paint stores segment rose 22.8% in the fourth quarter to $1.02 billion and 14.6% for the year to $3.98 billion, thanks to strong domestic architectural paint sales to contractor and DIY customers and improvement of industrial maintenance and product finishes sales. The acquisition of Duron added approximately 11% to paint store segment’s fourth quarter net sales and 3.5% to full year net sales. Net sales from stores opened more than 12 calendar months rose 10.9% in the fourth quarter and 10.1% for the year. Operating profit rose five percent during the quarter and 19% for the year.
The consumer segment’s net sales rose 5.2% to $261.5 million in the fourth quarter and nine percent to $1.30 billion for the year. Acquisitions increased net sales in the fourth quarter by 12.1%. However, this was partially offset by sales declines resulting from the elimination of a paint program with a customer, a negative impact of 3.9% on net sales due to the impairment of a customer sales incentive program and inventory adjustments at some of its retail customers. For the year, acquisitions increased net sales 7.2%. Operating profit dropped 52.8% in the fourth quarter and 5.7% for the year, which S-W attributed primarily to the impact of an additional $7.8 million charge for the impairment of certain assets and sharply increasing raw material costs that could not be offset by acquisition operating profits and favorable manufacturing absorption related to unit volume increases, the company said.
Automotive finishes segment recorded a 15.7% rise in net sales in the fourth quarter to $131.7 million and a 12.6% percent increase to $514.3 million for the year. Improving domestic and international sales, the April 2004 acquisition of a majority interest in an automotive coatings company and new product introductions helped drive the gains. Segment operating profit increased 3.1% in the quarter and 10.8% for the year. The company said operating profit for the fourth quarter and the year improved despite rising raw material costs, particularly in the fourth quarter.
At the company’s international coatings segment, net sales dropped 5.5% to $85.5 million in the fourth quarter, but rose 11.7% to $318.6 million for the year.
“We are pleased that we were able to report record earnings….in spite of rapidly rising raw material costs,” said Christopher M. Connor, chairman and CEO. “This improvement was due to significant volume gains, control of operating expenses and the benefits of effective tax planning. Though significant raw material cost increases have adversely