Americans are buying more paint and are willing to pay higher prices for it.
Shares of Sherwin-Williams(NYSE: SHW) were up 4% as of 10:30 ET following a strong earnings report.
Americans aren't putting away the paint brush
Investors knew coming into this earnings season that high interest rates have eaten into home construction and renovations, but consumers appear to be moving forward with smaller home improvement jobs like painting.
Sherwin-Williams earned $3.70 per share in the second quarter on revenue of $6.27 billion. That's a mixed result relative to Wall Street's consensus estimates of $3.48 per share in earnings on sales of $6.33 billion, but it demonstrates the company's pricing power.
"Led by strong performance in the Paint Stores Group, we continued to execute on our proven strategy across the company to deliver consolidated sales within our expectations, gross margin expansion, EBITDA growth, and a 12.5% ... increase in adjusted diluted net income per share," CEO Heidi G. Petz said in a statement.
Net sales in the company's paint store group were up 3.5% year over year, the result of moderating raw material costs and the benefit of higher selling prices implemented earlier in the year.
Is Sherwin-Williams stock a buy?
Sherwin-Williams raised its full-year 2024 earnings guidance to $11.10-$11.40 per share, up from $10.85-$11.35, which tracks Wall Street's consensus estimate for $11.37 per share. The company also continues to lean on cash return strategies, allocating $1.34 billion to dividends and share repurchases so far this year.
Sherwin-Williams is unlikely to deliver the growth numbers of a bleeding-edge tech stock, but the company is proving its resilience in a challenging market. For investors seeking ballast for their portfolio, Sherwin-Williams is an attractive option.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool recommends Sherwin-Williams. The Motley Fool has a disclosure policy.
