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FY2026 Q1
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The Sherwin-Williams Company earnings call
Buzzberg read
January 1 price increase realization trending better than expected.
Sherwin-Williams reported solid Q1 results that beat its own guidance, with strong sales in all segments and continued share gains. Management maintained full-year guidance, raising its raw material inflation outlook but also its price mix expectations, resulting in a neutral tone as it navigates volatility from the Middle East conflict. Q1 sales grew high-single-digit %, with paint stores +mid-single-digit %, consumer brands +low-single-digit % ex-Souvenir, and performance coatings +mid-single-digit %.
Buzzberg read January 1 price increase realization trending better than expected. Sherwin-Williams reported solid Q1 results that beat its own guidance, with strong sales in all segments and continued share gains. Management maintained full-year guidance, raising its raw material inflation outlook but also its price mix expectations, resulting in a neutral tone as it navigates volatility from the Middle East conflict. Q1 sales grew high-single-digit %, with paint stores +mid-single-digit %, consumer brands +low-single-digit % ex-Souvenir, and performance coatings +mid-single-digit %. Read full analysisCollapse analysis
Sherwin-Williams reported solid Q1 results that beat its own guidance, with strong sales in all segments and continued share gains. Management maintained full-year guidance, raising its raw material inflation outlook but also its price mix expectations, resulting in a neutral tone as it navigates volatility from the Middle East conflict. Q1 sales grew high-single-digit %, with paint stores +mid-single-digit %, consumer brands +low-single-digit % ex-Souvenir, and performance coatings +mid-single-digit %.
- Gross margin expanded 90 bps y/y, the 14th expansion in the last 15 quarters.
- Full-year EPS guidance unchanged despite raising raw material inflation outlook to low-to-mid single digits (from low single digits).
- Management is taking more 'surgical' price increases rather than broad increases, and raised consolidated price mix guidance to the high end of the low-single-digit range.
Revenue$5.6669B+1% QoQ
EPS$2.35+5% QoQ
Gross margin49.07%Reported
Operating margin14.31%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Margins
Full-year raw material inflation outlook raised to low to mid single digits.
Pricing
Expect continued volatility and prepared for additional price increases.
Show 3 more callouts
Demand
Residential repaint returns to mid-single-digit growth.
Demand
Automotive refinish sales up low teens with broad-based gains.
Demand
Packaging sales up high singles against strong comparison.
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $5.6669B | +1% QoQ |
| EPS | $2.35 | +5% QoQ |
| Gross margin | 49.07% | Reported |
| Operating margin | 14.31% | Reported |
| Free cash flow | $0.0008B | Reported |
| Capex | $0.1383B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| RevenueCONSUMER_BRANDS | FY2026 | -3%–-1% | -2% | Maintained |
| RevenuePERFORMANCE_COATINGS | FY2026 | 4%–6% | 5% | Maintained |
AI, capex & demand read
Management read
Confident
Management expressed confidence in their ability to outperform and gain share despite market challenges, emphasizing aggressive share gain efforts and strategic pricing actions.
Investment and capacity
Management mentioned that SG&A increased due to non-annualized operating costs and depreciation related to new buildings, indicating ongoing investment in infrastructure. They also reiterated plans to open 80-100 new stores for the year, and noted continued portfolio optimization with store closures. The company is investing in new global headquarters and a global technology center, as highlighted
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Companiesreturns since call
Supply chain
Supply chain
Jim Jay
Raw material inflation is expected to hit P&L more materially in Q2 and H2, exiting the year at the high end of the low-to-mid single-digit range, as feedstock price increases flow through contracts with a lag. Industrial segments in APAC/EMEA see it first, then North American architectural. — The delayed pass-through means Sherwin's own margins will compress before price increases catch up, but also signals rising input costs for industrial gas suppliers and competing coatings makers who are not as contractually insulated.
Evidence
“sustained inflation in these commodities typically takes about a quarter or two before we begin seeing an impact in our P&L”
Supply chain
Ben Meisenzahl
Consumer Brands segment margin improved to 34.3% flow-through, driven by global supply chain efficiencies and premium mix, not reallocation of costs. This is a structural improvement in a business that has typically had lower margins. — Suggests internal cost-out programs are yielding durable margin gains that competitors may not have, widening Sherwin's competitive advantage in the DIY/architectural space.
Evidence
“There is no reallocation. I know back in 2023, we talked about how we had that fixed cost allocation between the businesses. Nothing here.”
Supply chain
Jim Jay
The packaging segment's strong growth (high single digits) is not just a regulatory one-off. The BPA ban in Europe (EFSA) and similar moves in Asia and LATAM still have a lot of room to run, positioning Sherwin for multi-year conversion-led growth. — Global regulatory shifts in food-contact coatings are a durable share-shift catalyst that Sherwin is capitalizing on, potentially at the expense of other coatings suppliers with less advanced BPA-NI technology.
Evidence
“if you look at Asia and LATAM, there's still a lot of room to run in those regions as well.”
External signals
Supply-chain alpha · 3returns since call
Raw material inflation is expected to hit P&L more materially in Q2 and H2, exiting the year at the high end of the low-to-mid single-digit range, as feedstock price increases flow through contracts with a lag. Industrial segments in APAC/EMEA see it first, then North American architectural.
Consumer Brands segment margin improved to 34.3% flow-through, driven by global supply chain efficiencies and premium mix, not reallocation of costs. This is a structural improvement in a business that has typically had lower margins.
The packaging segment's strong growth (high single digits) is not just a regulatory one-off. The BPA ban in Europe (EFSA) and similar moves in Asia and LATAM still have a lot of room to run, positioning Sherwin for multi-year conversion-led growth.
Methodology & coverage
Management-only analysis. All 5 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.