Sherwin-Williams (NYSE: SHW) reported Q1 EPS of $4.08, $0.14 better than the analyst estimate of $3.94. Revenue for the quarter came in at $4.15 billion versus the consensus estimate of $4.13 billion.

• Consolidated net sales increased 2.6% in the quarter to $4.15 billion
  • Net sales from stores in U.S. and Canada open more than twelve calendar months increased 7.4% in the quarter
• Diluted net income per share increased to $3.46 per share in the quarter compared to $2.62 per share in the first quarter 2019
• Excluding the impact of acquisition-related amortization expense, diluted net income per share increased to $4.08 per share in the quarter versus $3.60 per share in the first quarter 2019, excluding the impact of acquisition-related costs and the pension plan settlement expense
• Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) increased 8.3% in the quarter to $623.1 million, or 15.0% of sales

Commenting on the results, John G. Morikis, Chairman and Chief Executive Officer, said, "My deepest thanks goes to the entire Sherwin-Williams team for their focus on the health and well-being of our employees, our customers, our communities and our Company as we manage through the ongoing COVID-19 pandemic. We delivered outstanding results in the first quarter driven by strong architectural paint demand to start the year, and minimal impacts from the pandemic in our North American stores business until late in the quarter. Sales grew year-over-year in line with our guidance, gross margin expanded 260 basis points to 45.6% and adjusted earnings per share increased 13.3% to $4.08 per share. Adjusted EBITDA grew 8.3% to $623.1 million, or 15.0% of sales compared to 14.2% of sales in the first quarter last year, and we continued to return cash to shareholders as we repurchased 1.7 million shares of our common stock in the first quarter.

"In The Americas Group, same store sales growth was 7.4% in the quarter, with strong demand in all architectural end markets through mid-March, and segment margin improved by 140 basis points. In the Consumer Brands Group, higher volume sales through most of the Group's North American retail customers was more than offset by our planned exit of business at ACE and softness in some international end markets. In the Performance Coatings Group, moderating raw material costs and good cost control drove margin expansion despite industrial demand that remained highly variable by end market and geography.

"We anticipate that the rapid deterioration of the U.S. and global economies experienced late in the first quarter due to the COVID-19 pandemic will most likely continue through the second quarter. We see no immediate, meaningful improvement ahead in most end markets we serve, and we are unable to predict when any noticeable improvement will occur. Given the trends and indicators we see at this time, we anticipate second quarter 2020 consolidated net sales will decrease by a low-to-mid-teens percentage versus the second quarter of 2019.

"For the full year 2020, we are revising our sales guidance to reflect uncertainties in the timing and pace of improvement in the U.S. and global operating environment. If economic conditions begin returning to normal in the third quarter 2020 and continue improving through the fourth quarter 2020, we anticipate full year consolidated net sales to be flat to down a low single digit percentage. If economic conditions do not materially improve until the first quarter 2021, we anticipate full year 2020 consolidated net sales to decrease by a mid-to-high single digit percentage. This is compared to our previous full year 2020 sales guidance of an increase of 2% to 4%. Considering our revised range of potential sales, we are revising our diluted net income per share guidance for 2020 to be in the range of $16.46 to $18.46 per share compared to our previous guidance of $19.91 to $20.71 per share and compared to $16.49 per share earned in 2019. Full year 2020 earnings per share includes acquisition-related amortization expense of approximately $2.54 per share, respectively. Full year 2019 earnings per share includes acquisition-related costs of $3.21 per share and other adjustments of $1.42 per share."

GUIDANCE:

Sherwin-Williams sees FY2020 EPS of $16.46-$18.46, versus the consensus of $21.07.

• Revising FY20 diluted net income per share guidance to a range of $16.46 to $18.46 per share, including acquisition-related amortization expense of $2.54 per share, due to COVID-19 pandemic. Prior FY20 guidance was $19.91 to $20.71 per share, including acquisition-related costs of $2.79 per share

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