10-Q · April 28, 2026
Sherwin-Williams reported Q1 net sales of $5,666.9 million, up 6.8% year-over-year, with gross margin expanding to 49.1% and GAAP diluted EPS rising 7.5% to $2.15. Operating cash flow returned to positive $139.1 million…
Earnings analysis · 10-Q
SHW earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
Sherwin-Williams delivered a solid Q2, with revenue up 7.5% to $6.789 billion and GAAP diluted EPS up 14.3% to $3.43, supported by growth in every operating segment and SG&A leverage. Cash generation improved…
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Sherwin-Williams delivered a solid Q2, with revenue up 7.5% to $6.789 billion and GAAP diluted EPS up 14.3% to $3.43, supported by growth in every operating segment and SG&A leverage. Cash generation improved materially, with $1.487 billion of six-month operating cash flow and approximately $1.257 billion of implied free cash flow. Offsetting factors are management’s expectation for softer demand in the second half, raw-material and logistics inflation, a $12.072 billion debt balance, and a widening working-capital deficit.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $3.43
What stood out
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Revenue and EPS grew strongly
Q2 net sales increased $474.8 million, or 7.5%, year over year to $6.789 billion; sequentially, revenue rose from $5.670 billion in Q1 2026. GAAP diluted EPS increased $0.43, or 14.3%, to $3.43.
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SG&A leverage offset modest gross-margin dilution
Gross margin was 49.2%, down 20 basis points from 49.4% a year earlier due primarily to Suvinil dilution, but operating leverage improved as SG&A fell 90 basis points as a percentage of sales to 31.0%. Implied operating margin expanded to 18.1% from 17.5% in Q2 2025.
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Broad-based segment sales growth
All three operating segments grew: Paint Stores rose $187.8 million to $3.890 billion, Consumer Brands rose $174.1 million to $983.5 million, and Performance Coatings rose $112.7 million to $1.914 billion.
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Suvinil and same-store sales aided growth
Consumer Brands delivered the fastest growth at 21.5%, including a 16.0% acquisition/divestiture contribution and a 1.6% favorable currency impact. Paint Stores’ comparable-store sales increased 4.2%.
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Operating cash flow accelerated
Six-month operating cash flow increased $435.0 million to $1.487 billion. After $230.1 million of capital expenditures, implied six-month free cash flow was $1.257 billion, with capex equal to 1.8% of six-month sales.
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Liquidity supports shareholder returns
Liquidity included $293.5 million of cash and $1.969 billion of unused credit capacity at June 30, 2026. The company repurchased 5.6 million shares during the first six months and retained authorization for 24.0 million shares.
What to watch
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Soft demand and input-cost inflation persist
Management expects softer demand to persist through the second half of 2026 while facing inflation in raw materials, energy, logistics and packaging. Q2 gross margin declined 20 basis points year over year to 49.2%.
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Debt and interest burden increased
Total debt rose to $12.072 billion at June 30, 2026 from $10.871 billion at December 31, 2025, while six-month interest expense increased $51.3 million year over year to $267.5 million.
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Working-capital deficit widened
Net working capital worsened by $856.7 million year over year to a $2.628 billion deficit, and the current ratio declined to 0.73 from 0.87 at December 31, 2025. The filing states there were no material changes to previously disclosed risk factors during the first six months of 2026.
Management's outlook
The 10-Q MD&A does not provide a numerical EPS or revenue range. Management expects a “softer-for-longer” demand environment to continue in the second half of 2026, alongside inflation in raw materials, energy, logistics and packaging; it targets core capital expenditures of approximately 2% of 2026 net sales.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.