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Sherwin-Williams: Preliminary Q4 Sales and Fiscal Earnings

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Sherwin-Williams

In a press release on January 15, Sherwin-Williams (SHW) announced its preliminary fourth-quarter sales numbers and fiscal 2018 earnings. The preliminary numbers indicate that the company’s fourth-quarter revenues could increase 2%—compared to the previous year. Sherwin-Williams expected the revenues to increase by a mid-single-digit percentage. However, sales from the stores opened for more than 12 months in the United States and Canada increased 3%.

Based on the preliminary numbers, Sherwin-Williams expects its fiscal 2018 adjusted EPS to be $18.53. The EPS excludes acquisition-related costs of $4.66 and a non-operating expense of $2.72 per share. In 2017, Sherwin-Williams reported an adjusted EPS of $15.07.

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John G. Morikis, Sherwin-Williams’ chairman, president, and CEO, said, “Our performance in the fourth quarter was disappointing across the board relative to our outlook back in October. Consolidated revenue growth for the fourth quarter fell well short of our previous expectation, due in large part to weak sales growth by our North American stores in October and November. Store sales rebounded somewhat in December, but not enough to bring in the quarter.”

Sherwin-Williams is scheduled to announce its fourth-quarter earnings on January 31.

Stock price updates

Although the preliminary fourth-quarter sales were disappointing, the earnings growth for fiscal 2018 was positive. The stock gained 0.7% and closed at $398.53 for the week ending January 18. The gains helped Sherwin-Williams reduce the gap in its 100-day moving average price. However, the stock traded 4.4% below its 100-day moving average price of $416.8. On a year-to-date basis, Sherwin-Williams has gained 2.3%. PPG Industries (PPG) and Axalta (AXTA) have increased 4.2% and 11.8%, respectively, while RPM International (RPM) has declined 4.8%.

Sherwin-Williams’ 14-day relative strength index is 54, which suggests that the stock isn’t overbought or oversold.

Sherwin-Williams underperformed the PowerShares DWA Industrials Momentum Portfolio ETF (PRN), which gained 2.6% during the week. The fund has invested 3.5% of its portfolio in Sherwin-Williams as of January 18.

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