SHW earnings analysis
What we found in SHW's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
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.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- 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.
- 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.
- 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.
- 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%.
- 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.
- 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.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- 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%.
- 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.
- 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.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $3.43
- Gross margin
- 49.2%
- Operating margin
- 18.1%
- Segment
- Paint Stores Group: $3.890 billion, +5.1% year over year
- Segment
- Consumer Brands Group: $983.5 million, +21.5% year over year
- Segment
- Performance Coatings Group: $1.914 billion, +6.3% year over year
What they said about what is next.
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.
The filing reads about the same as the one before it.
What came before.
- 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…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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