Headline: Sherwin-Williams Q3 Profits Fall Short of Expectations Amid Weak Demand

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Headline: Sherwin-Williams Q3 Profits Fall Short of Expectations Amid Weak Demand

The third-quarter profit of industrial paint manufacturer Sherwin-Williams fell short of expectations due to declining sales in key segments serving the residential, automotive, and aerospace sectors. Following the announcement, the company's shares dropped by 7.61% in pre-market trading.

Being one of the leading coating manufacturers globally, Sherwin-Williams projected that fourth-quarter net sales might remain unchanged or experience a slight increase in low single digits due to anticipated industry shutdowns during the holiday season.

The company's performance reflects broader trends in the U.S. economy. American automakers faced declines in sales in the third quarter due to fewer sales days and reduced consumer spending amid rising inflation and interest rates. These factors have diminished demand for coatings and related materials.

Additionally, new single-family home sales in the U.S. fell in August. However, there is potential for demand recovery in the coming months as mortgage rates and housing prices begin to decline.

Ohio-based Sherwin-Williams reported adjusted earnings of $3.37 per share for the quarter ending September 30th, falling short of the analysts' average estimate of $3.54 per share compiled by LSEG. The company's third-quarter net sales reached $6.16 billion, slightly below the expected $6.20 billion.

The consumer brands segment, which includes products for the North American DIY market, saw a 7.5% drop in sales to $791 million. The performance coatings segment experienced a slight decline, with sales reaching $1.72 billion.

CEO Heidi Petz commented on the "continuing fluctuations in demand environment." In response to these market conditions, Sherwin-Williams announced a 5% price increase in the paint stores segment effective January 2025.

The company's results mirror those of industry peer PPG Industries, which also experienced a decrease in third-quarter profit due to lower sales in its industrial coatings division.