Sherwin-Williams Shares Sink on Q4 Results and Outlook

By
Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published January 26, 2023
Image of Sherwin-Williams sign

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Key Takeaways

  • Sherwin Williams (SHW) saw the biggest losses of any S&P 500 stock on Jan. 26 as the company warned about 2023 profit and sales.
  • The move lower followed a mixed fourth quarter earnings report, with revenue coming in below expectations but profit beating forecasts.
  • The company's CEO cited challenges including inflation, limitations on raw materials, and slower economic growth.

Sherwin-Williams (SHW) was the worst-performing stock in the S&P 500 on Jan. 26 as the paint maker posted mixed fourth quarter financial results, and it warned about profit and sales for 2023.

Sherwin-Williams reported revenue rose 9.8% to $5.23 billion, short of forecasts. Earnings per share (EPS) of $1.89 beat expectations.

CEO John Morikis explained that the company faced "difficult operating conditions," including "relentless" cost inflation, limited raw material availability, slowing economies, the war in Ukraine, and COVID-19 lockdowns in China.

Morikis indicated that the company expected a "very challenging demand environment" in 2023, especially from the housing market, which he said "will be under significant pressure." He said slowdowns in Europe, which are also beginning to appear across certain sectors in the U.S., and continuing COVID-19 concerns in China will also weigh on its business.

2023 Guidance

Sherwin-Williams anticipates full-year EPS of $7.95 to $8.65, while it expects revenue to be flat to down by a mid-single-digit percentage. Both were well below analysts' estimates.

Shares of Sherwin-Williams sank 9% on Jan. 26, and they've lost almost a quarter of their value in the past 12 months.

Chart showing the share price performance of Sherwin-Williams (SHW) over the past year

YCharts
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