Sherwin-Williams Announces 3Q Earnings

The Sherwin-Williams Co mpany has announced its financial results for the third quarter and nine months ended September 30, 2015. Compared to the same periods in 2014, consolidated net sales increased $1.7 million, or 0.1%, to $3.15 billion in the quarter and increased $174.6 million, or 2.0%, to $8.73 billion in nine months due primarily to higher paint sales volume in our Paint Stores and Consumer Groups. Unfavorable currency translation rate changes decreased consolidated net sales 3.6% in the quarter and 3.2% in nine months.

Diluted net income per common share in the quarter increased to $3.97 per share from $3.35 per share in 2014 and increased in
nine months to $9.04 per share from $7.39 per share last year. The increases in third quarter and nine month diluted net income per common share were due primarily to improved operating results of the Paint Stores and Consumer Groups. Currency
translation rate changes decreased diluted net income per common share by $.09 per share in the quarter and $.20 in nine
months.

Net sales in the Paint Stores Group increased 2.9% to $2.09 billion in the quarter and increased 5.0% to $5.53 billion in nine months due primarily to higher architectural paint sales volume. Net sales from stores open for more than twelve calendar months increased 2.1% in the quarter and increased 3.9% in nine months over last year’s comparable periods. Paint Stores Group segment profit increased $75.6 million to $507.4 million in the quarter from $431.8 million last year and increased $163.4 million to $1.12 billion in nine months from $954.0 million last year due primarily to higher paint sales volume. Segment profit as a percent to net sales increased in the quarter to 24.3% from 21.3% last year and increased in nine months to 20.2% from 18.1% in 2014.

Net sales of the Consumer Group increased 9.4% to $421.6 million in the quarter and increased 10.4% to $1.26 billion in nine months due primarily to sales of HGTV HOME by Sherwin-Williams paint to Lowe’s stores. Segment profit increased to
$88.3 million in the quarter from $79.0 million last year and increased to $257.9 million in nine months from $222.5 million last year due primarily to improved operating efficiencies. As a percent to net external sales, se
gment profit increased in the quarter to 20.9% from 20.5% last year and increased in nine months to 20.4% from 19.5% last year.

The Global Finishes Group’s net sales stated in U.S. dollars decreased 9.3% to $486.1 million in the quarter and decreased 7.4% to $1.46 billion in nine months. Unfavorable currency translation rate changes decreased net sales by 8.3% in the quarter and 7.6% in nine months. Stated in U.S. dollars, segment profit decreased in the quarter to $55.1 million from $60.8 million last year due primarily to unfavorable currency translation rate changes and the gain on the early termination of a customer agreement in the third quarter 2014 partially offset by decreasing raw material costs. Nine month segment profit decreased to $151.3 million from $162.1 million last year due primarily to unfavorable currency translation rate changes. Third quarter and nine month 2014 segment profit included a $6.3 million gain on the early termination of a customer agreement. Unfavorable currency translation rate changes reduced segment profit $9.0 million in the quarter and $21.7 million in nine months. As a percent to net external sales, segment profit was flat at 11.3% in the quarter versus the third quarter 2014 and 10.4% in nine months compared to 10.3% in 2014.

The Latin America Coatings Group’s net sales stated in U.S. dollars decreased 22.1% to $156.0 million in the quarter and decreased 16.3% to $472.3 million in nine months due primarily to unfavorable currency translation rate changes partially offset by selling price increases. Unfavorable currency translation rate changes decreased net sales by 23.6% in the quarter and 18.5% in nine months. Stated in U.S. dollars, segment profit decreased in the quarter to $2.1 million from $11.8 million last year and decreased in nine months to $15.7 million from $27.4 million last year due primarily to increasing raw material costs and unfavorable currency translation rate changes partially offset by selling price increases. Unfavorable currency translation rate changes decreased segment profit $5.0 million in the quarter and $10.6 million in nine months. As a percent to net external sales, segment profit decreased in the quarter to 1.4% from 5.9% last year and decreased in nine months to 3.3% from 4.9% last year.