Sherwin-Williams (SHW) Q3 2026 Earnings Call: Pricing, Margins and 2027 Cost Outlook
Source Tradingkey
Key Takeaways
- Consolidated sales grew by a high-single-digit percentage, supported by mid-single-digit price/mix and low-single-digit contributions from acquisitions and volume. Sherwin-Williams reported volume growth in every quarter of 2026 to date.
- Adjusted diluted EPS increased approximately 1%. Adjusted EBITDA rose 3.3% to $1.4 billion, with adjusted EBITDA margin at 20.5%.
- Management narrowed full-year 2026 adjusted diluted EPS guidance to $11.85-$12.15 while retaining the previous $12 midpoint.
- Paint Stores Group sales increased by a mid-single-digit percentage. Its 8% price increase, effective September 1, is tracking as planned and is expected to reach the historical realization range in the first half of 2027.
- Management expects approximately $75 million of cost savings in 2027 and low- to mid-single-digit raw material inflation, with the largest year-over-year impact expected in the first half.
- Demand is expected to remain choppy across most end markets into 2027. Management is not assuming a macroeconomic recovery in its planning.
Key Financial Data
| Metric | Q3 2026 performance | Commentary |
|---|---|---|
| Consolidated sales | High-single-digit growth | Included mid-single-digit price/mix and low-single-digit contributions from acquisitions and volume |
| Adjusted diluted EPS | Approximately 1% growth | Sales-to-earnings conversion was below management’s standards |
| EBITDA | Up 3.4% | Higher sales were partly offset by cost pressures |
| Adjusted EBITDA | Up 3.3% to $1.4 billion | Adjusted EBITDA margin was 20.5% |
| Reported SG&A | Mid-single-digit increase | Fell 50 basis points as a percentage of sales |
| Net operating cash, year to date | Up 10%, or $232 million | Driven by higher net income and lower working-capital cash usage |
| Capital returned to shareholders | $749 million in Q3; $3 billion year to date | Through share repurchases and dividends |
| Net debt/adjusted EBITDA | 2.4x | Quarter-end ratio |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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