Sherwin-Williams raises 2024 profit forecast on upcoming residential demand
July 23 (Reuters) -Sherwin-Williams SHW.N on Tuesday raised its full-year earnings forecast and posted a second-quarter profit that beat Wall Street estimates, as the paintmaker was helped by higher prices and increased sales across its paint stores and coating segments.
"We're also encouraged by growth in new residential, where we expect continued momentum over the back half of the year," said CEO Heidi Petz.
She added that the company expects consolidated net sales during the third quarter of 2024 to be up a low-single digit percentage compared to the year-ago period. Petz took the helm at Sherwin-Williams at the beginning of this year.
Shares of the company were up 5.5% in premarket trading.
The firm raised its 2024 adjusted profit per share forecast to a range of $11.10 to $11.40. Analysts were expecting $11.37 per share, per LSEG data.
U.S. home sale data for April shows sales rising, with supply being the highest in more than 16 years, boosting spend on residential repaint, driving profits for paintmakers higher. Additionally, with interest rates expected to go lower, the demand for homes would increase.
Industry peer PPG Industries PPG.N reported a lower-than-expected quarterly revenue due to weakness in its industrial coatings unit, yet the company expects an overall improvement in the second half of the year.
Overall sales for Sherwin-Williams inched up to $6.27 billion for the quarter ended June 30, from $6.24 billion a year ago, but falling short of estimates of $6.33 billion, as per LSEG data.
However, CEO Petz flagged a continued weakness in the Consumer Brands Group sales, impacted by soft DIY-paint demand in the U.S. Net sales in the segment fell 10.7% from a year ago.
On an adjusted basis, the Ohio-based company reported a profit of $3.70 per share for the reported quarter, compared with estimates of $3.48 per share.
Reporting by Seher Dareen in Bengaluru; Editing by Shailesh Kuber
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