Industrial paintmaker Sherwin-Williams profit misses estimates on weak demand
Oct 22 (Reuters) -Industrial paintmaker Sherwin-Williams SHW.N missed Wall Street estimates for third-quarter profit on Tuesday, hurt by lower sales in its segments that cater to thehousing, automotive and aerospace sectors.
Shares of the company were 7.61% lower in premarket trading. The firm expects fourth-quarter net sales to be flat to up in the low single-digit percentages, against the backdrop of potential shutdowns by industrial customers during the holiday season.
WHY IT'S IMPORTANT U.S. automakers reported a fall in third-quarter sales due to fewer selling days and weaker consumer spending amid inflationary challenges and higher interest rates, weighing on demand for coatings and furnishings materials.
Sales of new U.S. single family homes also fell in August and could recover in the coming months as declining mortgage rates and house prices stimulate demand.
CONTEXT The company, one of the world's largest coating makers, supplies paints, coatings and specialty materials under the brands Valspar, Minwax, Purdy and many more. Last week, industry peer PPG Industries PPG.N also reported a third-quarter profit miss due to lower sales at its industrial coatings segment.
BY THE NUMBERS Ohio-based Sherwin-Williamsposted an adjusted profit of $3.37 per share for the three months ended Sept. 30, compared with analysts' average estimate of $3.54 per share, according to data compiled by LSEG. The specialty chemicals maker reported net sales of $6.16 billion for the third quarter, below estimatesof $6.20 billion. Net sales in the consumer brands segment fell 7.5% to $791 million, hurt by softness in the DIY market in North America, while sales at the performance coatings segment fell slightly to $1.72 billion.
KEY QUOTE CEO Heidi Petz pointed to"continued choppiness in the demand environment", and announced a 5% price increase effective January 2025 in the paint stores segment.
Reporting by Pooja Menon in Bengaluru; Editing by Shilpi Majumdar and Devika Syamnath
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