Sherwin-Williams Q1 2025 Revenue at $5.307 Billion, Shipbuilding and Protective Coatings Sales Surge, Addressing Tariffs
On April 29, Sherwin-Williams (Sherwin-Williams) announced its first-quarter 2025 financial results. For the quarter, consolidated net sales decreased by 1.1% year-over-year to $5.307 billion, primarily due to an unfavorable currency translation impact of about 1%. Sales declines in the Performance Coatings Group and Consumer Brands Group were partially offset by sales growth in the Paint Stores Group. Pre-tax profit was $655.3 million, up 2.0% year-over-year, primarily due to higher sales prices and effective cost control in the Paint Stores Group, though declines in sales volume across all segments partially offset this growth. Adjusted EBITDA grew by 4.6%, reaching $937 million. Net income was $503.9 million, flat compared to the same period last year.
"As we expected, Sherwin-Williams continued executing its strategy amidst a volatile demand environment, achieving solid Q1 results driven by improved gross margin and strong cost controls," said Heidi G. Petz, Chairman, President, and CEO of Sherwin-Williams. "Led by the Paint Stores Group, consolidated sales were in line with our expected range, with adjusted diluted net earnings per share and adjusted EBITDA both achieving mid-single-digit percentage growth. We continued our consistent capital allocation strategy, investing $351.7 million in share repurchases, and increased the dividend by 10.5% for the quarter."
"Sales growth in the Paint Stores Group benefited from high single-digit percentage growth in protective and marine coatings. Residential repaint sales achieved mid-single-digit growth, driven by the continued strong returns from our prior investments. Despite the weakness in the new housing market, new residential sales continued to outperform the market. As expected, commercial and property maintenance performance was under pressure due to weak commercial construction completions and delayed capital expenditures. We continued to invest in growth, opening 18 new stores this quarter, which improved the segment's profitability. Sales in the Consumer Brands Group declined due to continued softness in North American DIY demand and foreign exchange headwinds, but the adjusted segment profit margin improved due to good cost control. In the Performance Coatings Group, packaging coatings achieved high single-digit growth. However, sales in other industrial businesses declined, as growth in new customers did not fully offset weaknesses in core customer businesses."
According to the quarterly report, Sherwin-Williams Paint Stores Group (PSG) achieved net sales of $2.939 billion in Q1 2025, a 2.3% year-over-year increase, mainly driven by higher sales prices. This led to a moderate single-digit percentage decrease in net sales but was partially offset by a low single-digit decline in sales volume. Net sales in some professional customer end-markets grew, with high single-digit percentage growth in protective and marine coatings, and mid-single-digit growth in residential repaint. Segment profit was $541.2 million, up 9.7% year-over-year, primarily due to net sales growth, though partially offset by higher employee-related costs.
The Consumer Brands Group (CBG) achieved net sales of $762.2 million in Q1 2025, a 6.0% year-over-year decline, primarily due to weak North American DIY demand and unfavorable currency translation factors in Latin America (approximately 3%). Segment profit was $131.9 million, down 14.0% year-over-year, mainly due to the decline in net sales, although effective cost control partially offset this impact. Amortization expenses related to acquisitions led to a 200 basis point decrease in the percentage of segment profit to net sales for both Q1 2025 and Q1 2024. Severance and other restructuring costs also caused a 200 basis point drop in the percentage of segment profit to net sales in Q1 2025.
The Performance Coatings Group (PCG) achieved net sales of $1.602 billion in Q1 2025, a 4.8% year-over-year decline, primarily due to unfavorable currency translation in Latin America (approximately 3%). Net sales in the packaging coatings segment (including an acquisition) grew by high single digits but were offset by declines in all other business segments. Sales in all regions decreased: mid-single-digit declines in Europe and North America, low-single-digit declines in Asia and Latin America. Industrial wood finishes sales were down due to a weak residential end-market, which was challenging compared to last year. Coil coatings showed some recovery as the quarter progressed; however, general industrial coatings declined due to weak demand in heavy equipment. Automotive refinish sales declined, nearly half of which was due to unfavorable foreign exchange, though the weakness in core business was partially offset by continued profitability from new customers. Segment profit was $212.7 million, down 10.5% year-over-year, primarily due to lower net sales. Amortization expenses related to acquisitions caused a 300 basis point decrease in the percentage of segment profit to net sales for both Q1 2025 and Q1 2024, and severance and other restructuring costs caused a 20 basis point decrease in the percentage of segment profit to net sales in Q1 2025.
Ms. Petz stated, "We expect soft demand across several end-markets to persist through the second half of the year. Regarding the current tariffs, it is important to note that the majority of our revenue comes from the U.S., and most of our raw materials are sourced from our manufacturing locations. In the ongoing macroeconomic turbulence, we remain focused on providing customers with stable and reliable assurances, offering them differentiated solutions that enhance their productivity and profitability. Our experienced management team has navigated through various operational cycles, and I am confident in our ability to assess, adjust, and take decisive actions to outperform the market. We remain committed to actively seeking growth opportunities, making targeted investments with clear returns, controlling general and administrative expenses, and executing on our corporate priorities."
Ms. Petz continued, "We expect consolidated net sales in Q2 2025 to show a low single-digit percentage change compared to Q2 2024. Our full-year 2025 guidance remains unchanged, with consolidated net sales expected to show a low single-digit percentage change compared to full-year 2024. Diluted net income per share is expected to be between $10.70 and $11.10, including $0.80 per share in acquisition-related amortization expenses and $0.15 per share in severance and other restructuring costs, compared to $10.55 per share in 2024. For the full year 2025, adjusted diluted net income per share is expected to be between $11.65 and $12.05, compared to $11.33 per share in 2024, reflecting a 4.6% growth at the median. We expect to update our full-year guidance when we report Q2 results in July."
