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New Stores and Management Changes for Sherwin-Williams

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Sherwin-Williams opens 100th store at Chicagoland

On November 9, 2016, Sherwin-Williams (SHW) announced the opening of its 100th Chicagoland retail store in the Bucktown neighborhood. The new store offers a wide selection of paints and stains. To simplify color selection, the new store has a ColorSnap Studio color wall that allows customers to choose from more than 1,500 colors and virtually paint the walls before finalizing their color choice.

The company plans to open 20–25 more stores in the area in the next five years.

Sherwin-Williams’s paint store groups represent more than 50.0% of the company’s total revenue. At the end of 3Q16, the paint store groups segment reported revenue of ~$6.0 billion compared to $5.5 billion at the end of 3Q15.

In 1Q16, Sherwin-Williams added 13 new stores. In 2Q16 and 3Q16, it added 18 and 24 new stores, respectively, for a total of 55 new stores at the end of 3Q16. It had 4,141 stores at the end of 3Q16. With the addition of one more new store, Sherwin-Williams’s revenue could rise in its 4Q16 earnings.

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Management change

On November 7, 2016, Sherwin-Williams announced that Christopher M. Connor will retire from his executive chairman position, effective December 31, 2016. However, Connor will continue to be part of the board of directors until the end of his term in 2017. To fill this gap, Sherwin-Williams has asked president and CEO (chief executive officer) John G. Morikis to take over the role of chairman, effective January 1, 2017.

You can indirectly hold Sherwin-Williams by investing in the PowerShares DWA Industrials Momentum ETF (PRN), which has invested 3.1% of its portfolio in Sherwin-Williams as of December 2, 2016. The top three holdings of the fund include Lockheed Martin (LMT), Macquarie Infrastructure (MIC), and Healthcare Services Group (HCSG), which have weights of 3.5%, 3.5%, and 3.4%, respectively.

In the next part, we’ll look at Sherwin-Williams’s latest analyst recommendations.

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