Sherwin-Williams lifts sales 7.9% to $6.86 billion as profit margin declines
Key Facts
Sherwin-Williams reported a 7.9% rise in consolidated sales to $6.86 billion in the third quarter ended September 30, 2026, topping revenue estimates of $6.78 billion, while adjusted EPS fell short of consensus. Adjusted EPS was $3.63, versus expectations of $3.69, according to estimates cited by Investing.com. Net income fell 1.5% to $821 million, while diluted EPS rose 0.9% to $3.38. The results reveal a divergence between sales growth and weaker earnings growth, alongside a decline in gross margin and higher costs. Investing.com reported that the stock fell 5.93% in premarket trading on October 27 following the results.
Sales growth was faster than in the year-earlier period, when third-quarter sales rose 3.2% to $6.36 billion and adjusted diluted EPS increased 6.5% to $3.59. In the third quarter of 2026, sales expanded at a faster pace, but adjusted EPS reached only $3.63, below analysts’ estimate. Second-quarter results provide separate context: sales rose 7.5% to $6.79 billion and diluted EPS increased 14.3% to $3.43, compared with the second quarter of 2025. These are year-over-year growth rates for each quarter, not a comparison between consecutive quarters. The figures show that faster sales growth in the third quarter was not matched by comparable earnings growth.
The decline in gross margin weighed on the company’s ability to convert higher sales into earnings, with the margin falling to 47.8% from 49.2% in the third quarter of the prior year. Coverage published by Investing.com attributed the contraction mainly to higher raw-material and supply-chain costs. The company statement, according to the correction in the evidence, also cited the sales mix, including the Suvinil acquisition and faster growth in lower-margin segments. On the demand side, the Paint Stores and Performance Coatings segments recorded low-single-digit sales-volume growth; that description does not apply to the company as a whole. At the same time, the statement identified a pricing impact at the consolidated sales level, without establishing that this impact alone explains revenue growth.
In its full-year guidance, the company kept its annual sales outlook unchanged but lowered its adjusted diluted EPS range to $11.85–$12.15. That implies a midpoint of $12.00, below analysts’ consensus of $12.09, according to Investing.com. The company also expects mid-single-digit growth in fourth-quarter sales, while customer and demand indicators tracked by management pointed to an expected slowdown through the rest of 2026 and into 2027. The company returned $749 million to shareholders in the third quarter through dividends and share repurchases. It was scheduled to hold a conference call to discuss results and guidance at 10:00 a.m. Eastern Time on October 27, 2026.