Sherwin-Williams Reports Higher Profit, Raises Outlook

By Tess Stynes

Sherwin-Williams Co. raised its outlook for 2016 as the paint maker reported its first-quarter earnings rose 12% amid better-than-expected revenue growth driven by stronger sales volume.

For 2016, the Cleveland company raised its per-share earnings estimate to a range of $12.50 to $12.70 from its previous estimate of $12.20 to $12.40.

For the current quarter, Sherwin-Williams forecast per-share earnings of $3.95 to $4.15 and net sales growth in the low- to mid-single digits. Analysts polled by Thomson Reuters expected per-share profit of $4.10 and revenue growth of 3% to $3.22 billion.

Sherwin-Williams last month agreed to buy rival Valspar Corp. for more than $9 billion, a deal that would help Sherwin-Williams get better access to big-box retailers such as Lowe's Cos., where Valspar is a big seller, and expand abroad.

For the latest quarter, net sales in Sherwin-Williams paint store group increased 11% to $1.62 billion amid broad growth across its markets. Sales at established stores increased 9.4%.

Consumer group net sales grew 7.5% to $378.1 million, mostly owing to sales of HGTV Home by Sherwin-Williams paint to home-improvement retailer Lowe's.

Over all, Sherwin-Williams reported a profit of $147.1 million, or $1.57 a share, up from $131.4 million, or $1.38 a share, a year earlier. Excluding items such as acquisition-related costs, adjusted earnings were $1.81 a share. Revenue increased 5.1% to $2.57 billion.

The company expected per-share profit of $1.50 to $1.65 and sales growth in the low single digits.

Gross margin rose to 49% from 46.2%.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

April 21, 2016 08:27 ET (12:27 GMT)

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