The Sherwin-Williams Company announced its financial results for the first quarter ended March 31, 2011. Compared to the same period in 2010, consolidated net sales increased $290.1 million, or 18.5 percent, to $1.86 billion in the quarter due primarily to acquisitions and selling price increases. Acquisitions and favorable currency translation rate changes increased consolidated net sales nine percent and 1.2 percent, respectively.
Net sales in the Paint Stores Group increased 9.2 percent to $929.3 million in the quarter due primarily to selling price increases, improving domestic architectural paint sales to DIY and residential repaint customers and improving protective and marine product sales. During the quarter, net sales from stores open for more than twelve calendar months increased 8.9 percent over last year’s first quarter. Paint Stores Group segment profit increased to $68.9 million in the quarter from $47.8 million last year due primarily to selling price increases partially offset by raw material cost increases. Segment profit as a percent to net sales increased to 7.4 percent from 5.6 percent last year.
Net sales of the Consumer Group increased one percent to $294.9 million in the quarter due primarily to selling price increases and the timing of seasonal shipments to some customers partially offset by the elimination of a portion of a paint program with a large retail customer. Segment profit increased to $41.1 million in the quarter from $37.5 million last year. Segment profit as a percent of net external sales increased to 13.9 percent from 12.8 percent last year due primarily to good cost control and selling price increases partially offset by increasing raw material costs.
The Global Finishes Group’s net sales stated in U.S. dollars increased 49.6 percent to $630.2 million in the quarter due primarily to acquisitions, higher paint sales volume, selling price increases and favorable currency translation rate changes. In the quarter, acquisitions and favorable currency translation rate changes increased net sales of the Global Finishes Group in U.S. dollars by 33.3 percent and 3.6 percent, respectively. Global Finishes Group segment profit in the quarter increased to $36.8 million from $23 million in last year’s first quarter due primarily to increased paint sales volume and good expense control. Foreign currency translation rate changes and acquisitions increased segment profit in the quarter by $1.6 million. As a percent to net external sales, segment profit was 5.8 percent in the quarter versus 5.5 percent last year.
“Although domestic demand remains soft, we are encouraged by the improvement in domestic DIY and protective and marine sales in the Paint Stores Group and continued growth in architectural, protective and marine, OEM and automotive finishes sales in the Global Group,” said Christopher Connor, chairman and chief executive. “Our Consumer Group improved their operating results through disciplined cost management and selling price increases. Our operating segment management teams continue to control costs and implement price increases in an effort to keep pace with rising raw material costs.
“We continued to invest in our Paint Stores Group business by opening seven net new locations,” said Connor. “For the year, we expect to open 50 to 60 net new stores. Our Global Finishes Group acquired three companies over the past twelve months, including Acroma and Sayerlack in Europe and Pinturas Condor in Ecuador. Although these acquisitions had a small impact on our first quarter consolidated net income they expand our global reach and provide important assets to support our worldwide business. During the quarter, we used our cash to continue to buy shares of stock and we increased the dividend rate to $.365 from $.36 last year. Our balance sheet remains flexible and is positioned for future acquisitions and investments in our business.