Industrial paintmaker Sherwin-Williams profit misses estimates on weak demand
Adds details on store closures in paragraph 3, analyst comment in paragraph 6
By Pooja Menon
Oct 22 (Reuters) -Industrial paintmaker Sherwin-Williams SHW.N missed third-quarter profit estimates on Tuesday, hurt by lower sales in its segments that cater to the housing, automotive and aerospace sectors, sending its shares down more than 4% before the bell.
The company expects its 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.
Sherwin-Williams said it was forced to shut down about 225 stores for a short period during the fourth quarter due to the Hurricane Milton.
WHY IT'S IMPORTANT
U.S. automakers reported a fall in third-quarter sales due to fewer selling days and weaker consumer spending, pressuring demand for coatings and furnishings materials. Sales of new U.S. single family homes also fell in August.
KEY QUOTE
CEO Heidi Petz announced a 5% price increase in the paint stores segment, effective January 2025, and pointed to "continued choppiness in the demand environment".
Analysts at KeyBanc Capital Markets said the stores closed by Sherwin-Williams represented nearly 5% of the total stores under the paint stores segment and are expected to have a "noticeable impact" on the quarter's performance.
CONTEXT
The company supplies paints, coatings and specialty materials under brands such as Valspar, Minwax and Purdy.
Peer PPG Industries PPG.N also missed profit expectations last week due to lower sales in its industrial coatings segment.
BY THE NUMBERS
Sherwin-Williams posted an adjusted profit per share of $3.37 for the quarter, versus analysts' estimate of $3.54, data compiled by LSEG showed.
Net sales of $6.16 billion also missed estimates of $6.20 billion.
Net sales in the consumer brands segment fell 7.5%, hurt by softness in the do-it-yourself market in North America. Sales at its performance coatings segment fell slightly to $1.72 billion.
Its biggest segment, paint stores, saw a 3% rise in net sales during the period.
Reporting by Pooja Menon in Bengaluru; Editing by Shilpi Majumdar and Devika Syamnath
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