$SHW · SHERWIN WILLIAMS CO
Sherwin-Williams filed its 10-Q for Q3 FY2026, reporting consolidated net sales of $6.86B (+7.9% YoY), with growth across all three segments. Diluted GAAP EPS was $3.38 vs $3.35 a year ago; adjusted diluted EPS was $3.63 vs $3.59. Gross margin contracted 140 bps to 47.8% as cost of goods sold grew faster than revenue. Net income declined slightly to $821M from $833M. The company repurchased $2.357B in stock during the first nine months, reducing diluted share count to 242.8M from 249.0M.
- Consolidated net sales rose 7.9% YoY to $6.86B, driven by selling price increases and the Suvinil acquisition
- Gross margin contracted to 47.8% from 49.2% YoY, a 140 bps decline
- Diluted GAAP EPS of $3.38 vs $3.35 YoY; adjusted diluted EPS of $3.63 vs $3.59
- Paint Stores Group same-store sales increased 3.9% in the quarter
- Treasury stock repurchases totaled $2.357B in the first nine months, reducing shares outstanding by ~6M shares YoY
Stock down 2.58% to $326.51 in the regular session despite the revenue beat, suggesting the 140 bps gross margin contraction and flat net income ($821M vs $833M YoY) are weighing on sentiment for this $79.26B market cap name.
The margin compression at Sherwin-Williams signals that even pricing power in the coatings sector may not fully offset input cost inflation, a read-through for the broader industrials space.
Sherwin-Williams' 7.9% revenue growth outpaces most coatings peers, but the 140 bps gross margin compression mirrors industry-wide raw material and input cost pressures. The Suvinil acquisition in Latin America contributed 2.6% of consolidated growth.
Gross margin erosion is the key risk: 47.8% vs 49.2% YoY, driven by higher cost of goods sold outpacing price increases. Interest expense jumped 18.9% to $139.3M in the quarter, reflecting higher debt levels. The $2.357B in buybacks has reduced shareholders' equity to $3.977B from $4.598B at year-end 2025.