SHW
MaterialsSherwin-Williams
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Financials
XBRL · SEC EDGAR2007–2025(19yr)| Metric | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $8.0B | $8.0B | $7.1B | $7.8B | $8.8B | $9.5B | $10.2B | $11.1B | $11.3B | $11.9B | $15.0B | $17.5B | $17.9B | $18.4B | $19.9B | $22.1B | $23.1B | $23.1B | $23.6B | +2.1% |
| Gross Profit | $3.6B | $3.5B | $3.3B | $3.5B | $3.7B | $4.2B | $4.6B | $5.2B | $5.6B | $5.9B | $6.8B | $7.4B | $8.0B | $8.7B | $8.5B | $9.3B | $10.8B | $11.2B | $11.5B | +2.9% |
| Gross Margin | 45.0% | 43.8% | 46.0% | 44.8% | 42.7% | 44.1% | 45.3% | 46.4% | 49.0% | 50.0% | 45.3% | 42.3% | 44.9% | 47.3% | 42.8% | 42.1% | 46.7% | 48.5% | 48.8% | +0.4pp |
| Operating Income | — | — | — | $948.0M | $985.0M | $1.3B | $1.4B | $1.7B | $2.0B | $2.2B | $2.3B | $2.6B | $2.8B | $3.4B | $3.1B | $3.4B | $4.2B | — | — | — |
| Operating Margin | — | — | — | 12.2% | 11.2% | 13.7% | 14.2% | 15.2% | 17.3% | 18.3% | 15.3% | 14.9% | 15.7% | 18.4% | 15.5% | 15.3% | 18.1% | — | — | — |
| Net Income | $615.6M | $476.9M | $435.8M | $462.5M | $441.9M | $631.0M | $752.6M | $865.9M | $1.1B | $1.1B | $1.8B | $1.1B | $1.5B | $2.0B | $1.9B | $2.0B | $2.4B | $2.7B | $2.6B | -4.2% |
| Net Margin | 7.7% | 6.0% | 6.1% | 5.9% | 5.0% | 6.6% | 7.4% | 7.8% | 9.3% | 9.6% | 11.8% | 6.3% | 8.6% | 11.1% | 9.3% | 9.1% | 10.4% | 11.6% | 10.9% | -0.7pp |
| Free Cash Flow | $708.7M | $759.0M | $767.9M | $581.4M | $582.0M | $730.8M | $917.1M | $881.0M | $1.2B | $1.1B | $1.7B | $1.7B | $2.0B | $3.1B | $1.9B | $1.3B | $2.6B | $2.1B | $2.7B | +27.4% |
| FCF Margin | 8.9% | 9.5% | 10.8% | 7.5% | 6.6% | 7.7% | 9.0% | 7.9% | 10.7% | 9.0% | 11.1% | 9.7% | 11.1% | 16.9% | 9.4% | 5.8% | 11.4% | 9.0% | 11.3% | +2.2pp |
| EPS (Diluted) | $4.70 | $4.00 | $3.78 | $4.21 | $4.14 | $6.02 | $7.26 | $8.78 | $11.16 | $11.99 | $18.67 | $11.67 | $16.49 | $22.08 | $6.98 | $7.72 | $9.25 | $10.55 | $10.26 | -2.7% |
1. THE BIG PICTURE
Sherwin-Williams is currently a study in defensive positioning, using its massive controlled distribution network to protect its 49% gross margins in a cooling economy. While Sherwin-Williams remains a dominant force in North American coatings, it is increasingly reliant on price increases to offset falling sales volumes and a $10.871 billion debt burden (10-K Item 1, Risks).
2. WHERE THE RISKS HIT HARDEST
Sherwin-Williams’s primary strength—its Integrated Distribution network of 4,853 stores—is directly threatened by Economic and Cyclical Sensitivity. Because these stores represent high fixed costs, the "softer-for-longer" demand environment in housing and manufacturing expected through 2026 could turn this competitive advantage into a margin drag (10-K Item 1, Recent Results). Furthermore, Sherwin-Williams’ Brand Portfolio (including Valspar and Krylon) is highly vulnerable to Raw Material Volatility. Since these products rely on petrochemical-derived resins and solvents, geopolitical disruptions in the Red Sea or Ukraine can spike input costs, forcing Sherwin-Williams to choose between further price hikes or margin compression (10-K Item 1A, Competitive Position).
3. WHAT THE NUMBERS SAY TOGETHER
While Sherwin-Williams leads its peer group with a 49.0% gross margin, its 5.5% operating margin trails significantly behind competitors like Ecolab (19.3%) and PPG (16.6%) (XBRL). This suggests that the cost of maintaining its vast retail footprint and management trainee programs—which saw 1,700 hires in 2025—consumes a larger portion of profits than its peers' models (Competitive Position).
Recent results show a divergence in growth quality: while consolidated net sales rose 5.6% in Q4 2025, the core Paint Stores Group saw a decrease in sales volume, with growth driven entirely by price increases (8-K). This suggests the 2.1% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth is becoming harder to maintain as DIY demand softens. With net debt at $11.3 billion and a 4.3x net leverage ratio, Sherwin-Williams has limited room to maneuver if volume declines accelerate (CAPM). Low short interest of 1.4% suggests investors are not yet betting against Sherwin-Williams, but the reliance on pricing power over volume is a precarious trend (Supplemental Signals).
4. IS IT WORTH IT AT THIS PRICE?
At a Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 24.5x, Sherwin-Williams trades exactly in line with the peer median (Peer Benchmarking). According to the provided analysis, this valuation means the market is pricing in roughly 7.5% long-term growth (CAPM).
This expectation appears difficult to justify given management’s own guidance of "low to mid-single digit" sales growth for 2026 and the admission of "continued demand choppiness" (Recent Results). Sherwin-Williams’s 1.0% dividend yield is at the bottom of its peer group, and unlike PPG or CRH, it is not currently yielding significant returns through buybacks (Peer Benchmarking). If growth were to align with a more conservative 5.0% trajectory, the justified multiple would drop to 15.8x—representing a 36% downside from current levels (CAPM). The current price requires a belief that Sherwin-Williams can significantly outperform its "softer-for-longer" forecast.
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if sales volumes in the Paint Stores Group continue to decline for consecutive quarters, indicating that customers are no longer willing to absorb price increases.
- Constructive if Sherwin-Williams successfully reduces its $10.871 billion debt load, as lower interest obligations would free up cash flow for the share repurchases that currently lag behind peers like PPG (Risks, Peer Benchmarking).
6. BOTTOM LINE
Structural Advantage: A dominant, integrated distribution network of nearly 5,000 specialty stores that provides a direct, high-barrier-to-entry channel to professional contractors.
Bottom Line: Sherwin-Williams is a premier operator, but its current valuation demands growth that its own management suggests is unlikely in the near term.
1. Top 5 Material Risks
- Economic and Cyclical Sensitivity: Sherwin-Williams’ results are highly sensitive to global economic conditions, particularly in the construction, housing, and manufacturing segments. High interest rates and inflation have historically reduced demand for new residential homes and existing home turnover, and Sherwin-Williams expects these pressures to persist through 2026.
- Raw Material and Energy Costs: Sherwin-Williams relies on global sources for petrochemical-derived resins, latex, solvents, and titanium dioxide. Unexpected shortages, supplier capacity constraints, or geopolitical instability—such as the conflict in Ukraine or shipping disruptions in the Red Sea—can increase costs or limit product availability, directly impacting earnings.
- Debt and Liquidity: With total debt of approximately $10.871 billion as of December 31, 2025, Sherwin-Williams must dedicate significant cash flow to debt service. This leverage limits the capital available for dividends, share repurchases, and strategic investments, and increases vulnerability to credit market tightening.
- Information Technology and Cybersecurity: Sherwin-Williams is undergoing a multi-year digitization initiative to harmonize financial processing systems. Disruptions to these systems, or sophisticated AI-powered cyberattacks, could compromise critical financial reporting, operational processes, and confidential data, leading to regulatory fines and reputational damage.
- International Operations: Approximately 19.6% of consolidated net sales in 2025 were generated by foreign subsidiaries. These operations are exposed to risks including foreign currency exchange fluctuations, political instability, and trade policy shifts, such as the 2023 loss of $41.8 million resulting from the devaluation of the Argentine peso.
2. Company-Specific Risks
- Lead Pigment Litigation: Sherwin-Williams is a defendant in numerous legal proceedings regarding the historical manufacture and sale of lead pigments and lead-based paints. While no amounts are currently accrued, adverse outcomes could have a material impact on liquidity and financial condition.
- Acquisition Integration: Sherwin-Williams’s growth strategy relies on acquisitions, such as the October 2025 purchase of Suvinil (with annual sales of approximately $525 million). Failure to successfully integrate these businesses or realize expected returns could adversely affect financial results.
- Sustainability Expectations: Sherwin-Williams has established public goals regarding greenhouse gas emissions and renewable energy. Failure to meet these evolving stakeholder expectations or regulatory standards could result in reputational harm, increased costs, and potential liabilities.
- Labor Market Competition: Sherwin-Williams faces an increasingly competitive labor market. An inability to attract and retain a qualified workforce across its stores, manufacturing, and research operations could impair its ability to meet strategic objectives and customer needs.
3. Regulatory/Legal Risks
- Data Privacy Compliance: Sherwin-Williams must comply with a complex web of global privacy laws, including the EU’s GDPR, China’s Personal Information Protection Law, and the California Consumer Privacy Act. Non-compliance risks significant penalties, enforcement actions, and costly remediation.
- Environmental Regulation: Sherwin-Williams is subject to stringent health, safety, and environmental laws, including those related to climate change and chemical management. Compliance costs are expected to increase, and Sherwin-Williams is currently involved in investigation and remediation activities at various owned and third-party sites.
- Anti-Bribery Laws: Operations in foreign jurisdictions expose Sherwin-Williams to the Foreign Corrupt Practices Act and the UK Bribery Act. Despite internal controls, any violation could lead to criminal or civil proceedings and material adverse effects on financial condition.
4. Financial Impact Map
Economic Downturns → Sales, Earnings, and Cash Flow → Cyclical segments (housing, construction, manufacturing) account for significant discretionary spending sensitivity. Raw Material Cost Volatility → Earnings and Cash Flow → Petrochemical-derived inputs (resins, solvents) are subject to global supply/demand dynamics and geopolitical instability. Debt Service Obligations → Cash Flow from Operations → $10.871 billion in total debt (as of Dec 31, 2025) requires substantial cash allocation, reducing funds for dividends and growth. Foreign Currency Fluctuations → Net Sales and Earnings → 19.6% of 2025 net sales are derived from foreign subsidiaries, exposing Sherwin-Williams to exchange rate volatility and currency controls. Environmental Remediation → Earnings → Costs for investigation and cleanup at currently/formerly owned and third-party sites may exceed current accruals.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Jan 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Mar 2025 | — |