Paint firm and Motley Fool Stock Advisor pick Sherwin-Williams
Of Sherwin's three primary business segments, only its Global Group managed to post positive growth -- sales improved by 14.8%, and profits jumped by 21.7%. The Paint Stores segment struggled "due primarily to soft architectural paint sales" and saw a 1.9% sales drop; a 3.2% boost from acquisitions was easily offset by falling existing sales. The segment's total profits plummeted nearly 32%, thanks to a tough combination of lower sales and higher costs on raw materials. The Consumer Group was the top-line laggard, experiencing a 4.8% sales drop as profit fell a severe 24%, which was attributed to "soft DIY demand at most of the Segment's retail customers."
The fall in earnings wasn't pretty, but it came in ahead of analyst projections, as did sales. Sherwin is still firmly profitable and has been buying back its own shares, which served to soften the blow of the per-share profit decrease. But until domestic trends stabilize, stock performance will likely remain on the red side of the color scheme.
Lead-pigment litigation proceedings in Rhode Island and a few other states also continue to be an overhang on the company and rivals such as NL Industries
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.