The Sherwin-Williams Company (SHW) Earnings & Analysis

Latest quarter

Sherwin-Williams reported Q2 FY2026 revenue of $6.8 billion, up 7.52% from $6.3 billion a year earlier. The company’s revenue, as the consensus counts it, was $6.8 billion versus consensus revenue of $6.6 billion.

The company reported diluted EPS of $3.43, up 14.3% from $3.00 in Q2 FY2025. Adjusted EPS, as the consensus counts it, was $3.70, compared with consensus adjusted EPS of $3.56.

Heidi Petz said Paint Stores Group grew by a mid-single-digit percentage, with low-single-digit volume growth and price/mix at the low end of mid-single digits. She said Consumer Brands Group sales exceeded the company’s expectations, while Performance Coatings Group grew in every division and region.

Sherwin-Williams reported gross margin of 49.2%, compared with 49.4% a year earlier, and operating margin of 18.1%, compared with 17.4%. The company reported free cash flow of $1.2 billion, compared with $931.1 million in Q2 FY2025.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Heidi Petz said Sherwin-Williams’ updated outlook assumes no broad-based demand recovery, because customer feedback and the company’s leading indicators showed limited meaningful improvement in most end markets. She said the company planned to seek incremental volume while maintaining the products, services and supply solutions it provides to customers.

Petz said raw-material inflation remained a variable the company was managing, citing higher oil and related cost pressures and expected volatility through the remainder of the year. She said the company did not expect raw-material availability to become a supply issue. The company announced an 8% Paint Stores Group price increase effective September 1 to offset raw-material and other cost inflation.

Ben Meisenzahl said the September increase was expected to follow the company’s historical realization trend over time, though some customer contracts could extend into 2027. He said the company timed the increase to balance inflation, customer relationships and share gains. Meisenzahl said Performance Coatings Group pricing was being applied more selectively by business unit or region, reflecting its different route to market.

Petz said Paint Stores Group had opened 45 stores year to date and closed 57 stores, or about 1% of its store base. When an analyst asked about the closures, she said they followed a profitability threshold and formed part of active portfolio management. She said Sherwin-Williams remained on pace to open 80 to 100 new stores during 2026, with approximately 30 net additions, and expected to operate at the high end of its 80 to 100 net-new-store range beginning in 2027.

On demand, Petz said new residential remained under pressure, while the company reported growth in residential repaint, property maintenance, commercial, protective and marine. She said protective and marine had recorded its eighth consecutive quarter of at least high-single-digit growth. In response to analyst questions, Petz said DIY had not shown meaningful improvement, while the company continued to report share gains in the Pro Who Paints segment.

Meisenzahl said the company expected raw-material costs to increase in the second half and identified those costs as an economic headwind. He said volume assumptions in the company’s guidance were relatively consistent between the first and second halves, while pricing changed as Sherwin-Williams balanced pricing against inflation.

Guidance

Sherwin-Williams changed its FY2026 non-GAAP EPS outlook to $11.85–$12.15 and its GAAP EPS outlook to $10.92–$11.22. The company also expects Q4 FY2026 consolidated net sales to increase by a mid-single-digit percentage.