MW Sherwin-Williams sees DIY product sales fall, with demand set to deteriorate

By Tomi Kilgore

Stock drops as quarterly profit sees biggest miss in years, even as streak of sales misses is snapped

Shares of Sherwin-Williams Co. took an early dive Tuesday after the paints and coatings maker missed second-quarter profit expectations by a wide margin and said it stepped up cost-cutting measures as demand is set to remain weak and could deteriorate.

The company saw particular weakness in sales of do-it-yourself products in North America, which include brands such as Dutch Boy, Cabot and Krylon paints and coatings, offsetting strength seen in its paint-stores business from professional customers.

The stock (SHW) slid 1.3% in morning trading and was among the Dow Jones Industrial Average's DJIA weaker performers.

"Given the demand softness in the quarter, which we expect will continue, if not deteriorate, in the second half of the year, we aggressively accelerated and increased our restructuring actions, resulting in pretax expenses of $59 million," said Chief Executive Heidi Petz.

With Petz saying there was no reason to believe demand will improve, the 2025 outlook for adjusted earnings per share, which excludes nonrecurring items, was cut to $11.20 to $11.50 from $11.65 to $12.05. Net sales for the year are now expected to move up or down in the low-single-digit percentage range from 2024, compared with previous guidance of moving up by a low-single-digit percentage.

For the second quarter to June 30, net income dropped 15.2% to $754.7 million, while adjusted EPS fell to $3.38 from $3.70 and missed the FactSet consensus of $3.80. The margin of the bottom-line miss was the widest since the second quarter of 2022.

But sales rose 0.7% from the same period a year ago to $6.31 billion, just above the average analyst estimate compiled by FactSet of $6.3 billion, to snap a five-quarter streak of misses.

Among the company's business segments, consumer-brands sales were down 4.1% to $809.4 million, below the FactSet consensus of $836 million, as soft DIY demand in North America offset growth in Europe.

Paint-stores sales rose 2.3% to $3.7 billion, in line with expectations, helped by price increases and increased sales in professional customer markets, particularly in protective, marine and residential repainting products.

Sales of performance coatings slipped 0.3% to $1.8 billion, just above expectations of $1.77 billion.

The stock has slipped 0.9% in 2025, while the Dow has gained 4.4%.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 22, 2025 10:16 ET (14:16 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.