CLEVELAND, Sept. 29, 2020 /PRNewswire/ -- The
Sherwin-Williams Company (NYSE: SHW) today increased its net sales
guidance for the third quarter 2020 and its net sales and diluted
net income per share guidance for the full year 2020.
The Company now expects third quarter 2020 consolidated net
sales to increase three-to-five percent compared to third quarter
2019. The Company's prior guidance, issued July 28, 2020, was for third quarter 2020
consolidated net sales to be up or down a low-single-digit
percentage compared to third quarter 2019. On a segment basis, The
Americas Group (TAG) third quarter net sales are expected to be up
a low-single-digit percentage compared to our previous guidance of
flat to up a low-single-digit percentage. The Consumer Brands Group
(CBG) third quarter net sales are expected to be up a low-twenties
percentage compared to our previous guidance of up a
low-double-digit percentage. The Performance Coatings Group (PCG)
third quarter net sales are expected to be flat to down a
low-single-digit percentage compared to our previous guidance of
down a low-to-mid-single-digit percentage.
For full year 2020, the Company now expects consolidated net
sales to be flat to up slightly compared to full year 2019. The
Company's prior guidance, issued July 28,
2020, was for full year 2020 consolidated net sales to be
approximately flat year-over-year. On a segment basis, TAG full
year net sales are expected to be flat to up a low-single-digit
percentage. CBG full year net sales are expected to be up a
low-double-digit to mid-teen percentage. PCG full year net sales
are expected to be down a low-to-mid-single-digit percentage.
Based on sales at these levels, the Company is increasing its
full year 2020 diluted net income per share guidance to be in the
range of $20.96 to $21.46 per share. This compares to the Company's
prior guidance of $19.21 to
$20.71 per share issued July 28, 2020. Full year 2020 diluted net income
per share guidance includes acquisition-related amortization
expense of approximately $2.54 per
share. Full year 2019 earnings per share was $16.49 and included acquisition-related costs of
$3.21 per share and other adjustments
of $1.42 per share.
Commenting on the Company's updated third quarter and full year
2020 guidance, John G. Morikis,
Chairman and Chief Executive Officer, said, "Demand for
architectural coatings has been stronger than expected in the third
quarter, led by our DIY, residential repaint and new residential
segments. Demand on the industrial side of our business has also
improved, led by continued strength in packaging and emerging
momentum in other segments, most notably in automotive refinish and
industrial wood. As a result, our sales expectations for the third
quarter and full year 2020 have improved. We now expect our full
year 2020 adjusted diluted net income per share to increase 12.5%
at the midpoint of the range compared to the prior year. In
addition to improving demand, credit for the improved outlook goes
to the dedicated employees of Sherwin-Williams who have remained
focused on winning new business, serving our customers and
delivering solutions through these on-going, challenging
conditions."
The Company is scheduled to release third quarter 2020 financial
results on October 27, 2020, at which
time it will provide its outlook on fourth quarter sales and
further details regarding full year guidance.
About Sherwin-Williams
Founded in 1866, The Sherwin-Williams Company is a global leader in
the manufacture, development, distribution, and sale of paints,
coatings and related products to professional, industrial,
commercial, and retail customers. Sherwin-Williams manufactures
products under well-known brands such as Sherwin-Williams®,
Valspar®, HGTV HOME® by Sherwin-Williams, Dutch Boy®, Krylon®,
Minwax®, Thompson's® Water Seal®,
Cabot® and many more. With global headquarters in Cleveland, Ohio, Sherwin- Williams® branded
products are sold exclusively through a chain of more than 4,900
company-operated stores and facilities, while the company's other
brands are sold through leading mass merchandisers, home centers,
independent paint dealers, hardware stores, automotive retailers,
and industrial distributors. The Sherwin-Williams Performance
Coatings Group supplies a broad range of highly-engineered
solutions for the construction, industrial, packaging and
transportation markets in more than 120 countries around the world.
Sherwin-Williams shares are traded on the New York Stock Exchange
(symbol: SHW). For more information, visit www.sherwin.com.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains certain "forward-looking statements,"
as defined under U.S. federal securities laws, with respect to
sales and other matters. These statements can be identified by the
use of forward-looking terminology such as "believe," "expect,"
"may," "will," "should," "project," "could," "plan," "goal,"
"potential," "seek," "intend" or "anticipate" or the negative
thereof or comparable terminology. These forward-looking statements
are based upon management's current expectations, estimates,
assumptions and beliefs concerning future events and conditions.
Readers are cautioned not to place undue reliance on any
forward-looking statements. Forward-looking statements are
necessarily subject to risks, uncertainties and other factors, many
of which are outside the control of the Company that could cause
actual results to differ materially from such statements and from
the Company's historical results and experience. These risks,
uncertainties and other factors include such things as:
finalization of our financial statements for the quarter ended
September 30, 2020; general business
and economic conditions; the Company's ability to successfully
integrate past and future acquisitions into its existing
operations, as well as the performance of the businesses acquired;
strengths of retail and manufacturing economies and the growth in
the coatings industry; changes in the Company's relationships with
customers and suppliers; changes in raw material availability and
pricing; adverse weather conditions or impacts of climate change,
natural disasters and public health crises, including the COVID-19
pandemic; the duration, severity and scope of the COVID-19 pandemic
and the actions implemented by international, federal, state and
local public health and governmental authorities to contain and
combat the outbreak and spread of COVID-19, which may exacerbate
one or more of the aforementioned and/or other risks, uncertainties
and factors more fully described in the Company's reports filed
with the Securities and Exchange Commission (SEC); and other risks,
uncertainties and factors described from time to time in the
Company's reports filed with the SEC. Since it is not possible to
predict or identify all of the risks, uncertainties and other
factors that may affect future results, the above list should not
be considered a complete list. Any forward-looking statement speaks
only as of the date on which such statement is made, and the
Company undertakes no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Investor Relations Contacts:
Jim Jaye
Senior Vice President, Investor Relations & Corporate
Communications
Direct: 216.515.8682
james.r.jaye@sherwin.com
Eric Swanson
Vice President, Investor Relations
Direct: 216.566.2766
eric.r.swanson@sherwin.com
Media Contact:
Julie Young
Vice President, Global Corporate Communications
Direct: 216.515.8849
corporatemedia@sherwin.com
Regulation G Reconciliations
Management of the Company believes that investors' understanding
of the Company's operating performance is enhanced by the
disclosure of diluted net income per share excluding certain
Valspar acquisition-related costs and other adjustments. This
adjusted earnings per share measurement is not in accordance with
U.S. generally accepted accounting principles (GAAP). It should not
be considered a substitute for earnings per share computed in
accordance with U.S. GAAP and may not be comparable to similarly
titled measures reported by other companies. The following tables
reconcile diluted net income per share computed in accordance with
U.S. GAAP to adjusted diluted net income per share.
|
Current
Guidance(1) (After-tax)
|
|
Prior
Guidance(2)
(After-tax)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2020
|
|
Year Ended
December 31, 2020
|
|
Year Ended
December 31, 2019
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
After-Tax
(3)
|
Diluted net income per
share
|
$
|
20.96
|
|
$
|
21.46
|
|
$
|
19.21
|
|
$
|
20.71
|
|
$
|
16.49
|
Trademark
impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.00
|
Brazil indirect tax
credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(.36)
|
California litigation
expense provision reduction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(.28)
|
Tax credit investment
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
.79
|
Pension plan
settlement expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
.27
|
Total other
adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.42
|
Integration costs
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
.69
|
Acquisition-related
amortization expense (5)
|
|
2.54
|
|
|
2.54
|
|
|
2.54
|
|
|
2.54
|
|
|
2.52
|
Total
acquisition-related costs
|
|
2.54
|
|
|
2.54
|
|
|
2.54
|
|
|
2.54
|
|
|
3.21
|
Adjusted diluted net
income per share
|
$
|
23.50
|
|
$
|
24.00
|
|
$
|
21.75
|
|
$
|
23.25
|
|
$
|
21.12
|
|
|
(1)
|
Provided September
29, 2020
|
|
|
(2)
|
Provided July 28,
2020
|
|
|
(3)
|
The Regulation G
reconciliations for the year ended December 31, 2019 were disclosed
in the Company's Current Report on Form 8-K filed with the SEC on
January 30, 2020.
|
|
|
(4)
|
Integration costs
consist primarily of professional service expenses, salaries and
other employee-related expenses dedicated directly to the
integration effort, and severance expense. These costs are included
in Selling, general and administrative and other expenses and Cost
of goods sold.
|
|
|
(5)
|
Acquisition-related amortization expense consists
primarily of the amortization of intangible assets related to the
Valspar acquisition and is included in Amortization.
|
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SOURCE The Sherwin-Williams Company