Sherwin-Williams misses Q1 profit target as demand in North America drags
April 23 (Reuters) -Paintmaker Sherwin-Williams SHW.N missed Wall Street estimates for first-quarter profit on Tuesday due to lower sales in North America, sending shares of the company nearly 5% lower in premarket trading.
US existing home sales fell in March due to higher mortgage rates and house prices, limiting repair and remodel spend by home buyers who tend to paint before and after the sale of a home.
Sales at the Sherwin-Williams's consumer brands segment, which markets and sells paint and related products to the do-it-yourself (DIY) market, fell about 7% to $811 million in the first quarter from a year earlier.
Net sales at its performance coatings segment, which develops and sells industrial coatings, also dropped to $1.68 billion from $1.71 billion a year earlier.
The company said weak demand in North America was, however, partially offset by growth in the European markets.
Sherwin said it continues to see "demand choppiness in several end markets" and expects second quarter consolidated net sales to remain flat or rise in low-single digits compared to a year earlier.
Peer PPG Industries PPG.N, which also reported a fall in sales last week, has initiated strategic reviews of its architectural coatings business in the United States and Canada and for its silica products business.
Sherwin-Williams is positioned to benefit from the sale of PPG's architectural coatings business, as it is expected to be the most common substitute for PPG paint, according to a survey conducted by Morgan Stanley Research.
"While uncertainties persist in the macroeconomic environment...we are encouraged by pro architectural demand and sentiment in April," said Sherwin CEO Heidi Petz.
On an adjusted basis, the Ohio-based company reported a profit of $2.17 per share for the three months ended March 31, compared with analysts' average estimate of $2.21 per share.
Sherwin-Williams nets sales since 2021 https://reut.rs/4aKKgZL
Reporting by Vallari Srivastava in Bengaluru; Editing by Shinjini Ganguli
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