Sherwin-Williams Stock Surges as Residential Growth Powers Adjusted Profit Beat

Sherwin-Williams (SHW) shares rose Tuesday after the paint maker posted better-than-forecast second-quarter adjusted profit on higher residential sales. The paint maker also raised its 2024 profit outlook.

Adjusted earnings per share (EPS) of $3.70 jumped 12.5% year-over-year and beat the $3.46 consensus estimate of analysts polled by Visible Alpha. However, revenue of $6.27 billion was up less than 1% and trailed expectations of $6.33 billion.

The company raised its full-year outlook for both EPS and adjusted EPS. EPS for 2024 is now seen between $10.30 and $10.60, up from April’s guidance of $10.05 to $10.55, while adjusted EPS projections were revised up to a range of $11.10 to $11.40 from $10.85 to $11.35.

Residential Growth Despite ‘Down Market’

Chief Executive Officer (CEO) Heidi Petz said residential sales were driving demand for the company’s paint products, although “General Industrial demand was soft in all regions.”

“We are clearly seeing a return on last year’s growth investments in residential repaint, where volume increased by a mid-single digit percentage in a down market,” Petz said. “We’re also encouraged by growth in new residential, where we expect continued momentum over the back half of the year.”

Sherwin-Williams shares were 3.3% higher at $333.02 as of 10:18 a.m. ET Tuesday. They have gained about 7% this year.