Sherwin-Williams Q2 2020 Earnings Report
Key Takeaways
Sherwin-Williams reported a decrease in consolidated net sales by 5.6% to $4.60 billion due to COVID-19 impacts, but diluted net income per share increased to $6.48. Adjusted EBITDA increased 6.2% to $979.0 million.
Consolidated net sales decreased 5.6% to $4.60 billion.
Net sales from stores in U.S. and Canada open more than twelve calendar months decreased 6.9%.
Diluted net income per share increased to $6.48 compared to $5.03 in Q2 2019.
Adjusted EBITDA increased 6.2% to $979.0 million, or 21.3% of sales.
Sherwin-Williams
Sherwin-Williams
Sherwin-Williams Revenue by Segment
Forward Guidance
The company anticipates sequential improvement in demand for the third quarter compared to the second quarter with demand softness continuing in some end markets in the U.S. and global environments for the remainder of 2020. For the full year 2020, the company now expects full year consolidated net sales will be approximately flat to last year and increasing diluted net income per share guidance for 2020 to be in the range of $19.21 to $20.71 per share.
Positive Outlook
- Anticipate sequential improvement in demand for Q3 compared to Q2.
- Expect full year consolidated net sales will be approximately flat to last year.
- Increasing diluted net income per share guidance for 2020 to be in the range of $19.21 to $20.71 per share.
- Gross margin expanded 330 basis points to 48%.
- Teams adjusted quickly to meet customer demand while we temporarily shifted to curbside pickup and delivery, and delivered better than expected sales and profit results with sequential improvement through the quarter.
Challenges Ahead
- Demand softness continuing in some end markets in the U.S. and global environments for the remainder of 2020.
- Revised sales guidance continues to reflect uncertainties in the timing and pace of improvement in the U.S. and global environments.
- In the Performance Coatings Group, softening industrial demand and the impact of COVID-19 affected most of the end markets and all of the geographies served.
- Consolidated net sales improved sequentially in each month of the quarter, led by unprecedented demand for architectural DIY paint in North America. While sales were down by a mid-single digit percentage overall
- Net sales in The Americas Group decreased 8.4% due primarily to the impacts of COVID-19 on demand in most end market segments served, partially offset by higher DIY paint sales in the U.S. and Canada.
Revenue & Expenses
Visualization of income flow from segment revenue to net income