Sherwin-Williams (SHW) Prelim. Q4 EPS Misses Consensus

January 14, 2022 7:01 AM EST

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The Sherwin-Williams Company (NYSE: SHW) announced preliminary unaudited sales and earnings results for the fourth quarter and full year ended December 31, 2021.

SUMMARY

  • Fourth quarter 2021 consolidated net sales increased approximately 6.1% compared to the prior year
  • Fourth quarter 2021 diluted net income per share expected to be approximately $1.15 per share, including acquisition-related amortization expense of approximately $0.20 per share
    • Excluding acquisition-related amortization expense, adjusted fourth quarter 2021 diluted net income per share expected to be approximately $1.35 per share
  • Full year 2021 diluted net income per share expected to be approximately $6.96 per share
    • Adjusted full year 2021 diluted net income per share expected to be approximately $8.15 per share, excluding acquisition-related amortization expense and a loss from the Wattyl divestiture of $0.85 and $0.34 per share, respectively
    • Prior adjusted full year 2021 guidance was $8.35 to $8.55 per share, excluding acquisition-related amortization expense and a loss from the Wattyl divestiture of $0.85 and $0.34 per share, respectively
  • Conference call at 8:30 a.m. EST today to discuss preliminary results
  • Company to provide detailed fourth quarter and full year 2021 results, as well as 2022 outlook on January 27th as previously announced

(Consensus sees Q4 EPS of $1.69)

CEO REMARKS

"While we met our consolidated fourth quarter net sales guidance and demand remains robust, we are disappointed in our weaker than expected earnings results in the quarter," said Chairman, President and Chief Executive Officer, John G. Morikis. "Our lower than expected earnings relative to our prior guidance is related to a shortfall in The Americas Group, where sales were below our guidance due to slower than expected improvement in raw material availability and COVID-related labor headwinds in December. While availability of some raw materials has improved slightly, others including select resins and additives specific to our professional contractor products remain in tight supply. Logistics and transportation issues have further impacted the supply chain. Additionally, we faced meaningful labor challenges in The Americas Group in December related to the COVID Omicron variant, as our workforce, including store managers, field sales reps and drivers, experienced reduced staff availability and store hours in some locations. Many of our suppliers and customers have also reported labor-related impacts due to the ongoing COVID resurgence. Sales in our Consumer Brands Group exceeded expectations, driven primarily by non-paint products. Performance Coatings Group's top line results also exceeded expectations and were strong in all businesses and regions.

"As we enter 2022, demand remains strong across the majority of our end markets, though we expect raw material availability and COVID-related issues to persist through the first quarter. Raw material and other costs remain elevated, and we continue to respond with pricing actions in every Group to offset higher costs, including a 12% price increase in The Americas Group effective February 1st. We have continued to invest in our business, including adding 50 million gallons of incremental architectural capacity that is now online. Additionally, we opened 79 paint stores in the U.S. and Canada during 2021, including 32 in the fourth quarter. We remain highly confident in our strategy, our people, and our ability to emerge as an even stronger Company following the current near-term disruptions."

FOURTH QUARTER PRELIMINARY CONSOLIDATED RESULTS

Three Months Ended December 31,

2021

2020

$ Change

% Change

Net sales

$ 4,762.2

$ 4,488.8

$ 273.4

6.1

%

Net income per share - diluted

$ 1.15

$ 1.49

$ (0.34)

(22.8)

%

Adjusted net income per share - diluted

$ 1.35

$ 1.70

$ (0.35)

(20.6)

%

Twelve Months Ended December 31,

2021

2020

$ Change

% Change

Net sales

$ 19,944.6

$ 18,361.7

$ 1,582.9

8.6

%

Net income per share - diluted

$ 6.96

$ 7.36

$ (0.40)

(5.4)

%

Adjusted net income per share - diluted

$ 8.15

$ 8.19

$ (0.04)

(0.5)

%

CONFERENCE CALL ON JANUARY 14, 2022

The Company will conduct a conference call to discuss its preliminary unaudited fourth quarter and full year 2021 results at 8:30 a.m. EST on Friday, January 14, 2022. Participating on the call will be Chairman, President and Chief Executive Officer, John G. Morikis, along with other senior executives.

The conference call will be webcast simultaneously in listen only mode by Issuer Direct. To listen to the webcast on the Sherwin-Williams website, click on the following link, https://investors.sherwin-williams.com/events-and-presentations/default.aspx. An archived replay of the webcast will be available at https://investors.sherwin-williams.com/events-and-presentations/default.aspx beginning approximately two hours after the call ends.

CONFERENCE CALL ON JANUARY 27, 2022

As previously announced, the Company will conduct a conference call to discuss its final financial results for the fourth quarter and full year 2021 and its outlook for the first quarter and full year 2022 at 11:00 a.m. EST on Thursday, January 27, 2022.



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