Sherwin-Williams Cuts Third-Quarter Outlook on Disruptions
Sherwin-Williams Cuts Third-Quarter Sales Outlook on Disruptions
(Bloomberg) -- Sherwin-Williams Co. lowered its revenue forecast for the third quarter, becoming the second paint-maker in two days to signal that supply-chain disruptions are vexing sales.
Hurricane Ida’s lingering impact is contributing to an already existing difficulty in obtaining raw materials, the Cleveland-based company said in a statement Wednesday. Third-quarter sales will be up or down by just a low single-digit percentage from the year-earlier period, compared with a prior expectation of as much as a high single-digit increase. The guidance for full-year sales and earnings per share remains unchanged.
The paint-maker’s shares fell 2.3% to $295.93 at 9:36 a.m. in New York. The company’s stock had risen 24% this year through Tuesday.
Sherwin-Williams says demand for its products remains strong but it’s struggling to get a steady supply of raw materials. PPG Industries Inc., a maker of industrial paints and coatings, on Tuesday cited similar circumstances in withdrawing its 2021 financial guidance. Chemical companies, particularly those along the U.S. Gulf Coast, have been battered by weather events including a debilitating freeze last winter and the hurricane last week.
“Persistent and industrywide raw material availability issues have not improved as anticipated, impacting our ability to fully meet the strong demand,” Sherwin-Williams Chief Executive Officer John Morikis said in the statement. The supply issues, compounded by Ida, are expected to “to negatively impact our third-quarter consolidated sales by a high-single digit percentage.”
The company intends to provide an update on its full-year outlook when it reports third-quarter earnings on Oct. 26. For now, it’s keeping its full-year earnings guidance at $8.01 to $8.31 per diluted share, including an amortization expense of 80 cents a share related to an acquisition and a 34-cent loss on a divestiture.
©2021 Bloomberg L.P.