Friday, April 17, 2009

Sherwin-Williams Paints It Up

Sherwin-Williams (SHW) reported EPS at way over guidance. The actual EPS was $.32 compared to guidance of $.05 to $.25. As controversial as guidance is, how can you miss by such a wide mark and then not report any significant factors contributing to the variance. Sales are down. They are having trouble getting their SG&A down as quickly and foreign exchange went against them. Almost any company is saying this.

Lets have a close read of the earnings release.

"Net sales in the Paint Stores Group of $898.4 million in the quarter were 12.9% lower than last year's first quarter due primarily to weak paint sales volume and corresponding weakness in non-paint sales categories." That's rich; the paints store group sales were down because paint sales are down. and oh there are a few non paint categories and they were also down. I cannot believe the senior officers and board of directors would accept a comment of this nature as acceptable; if thats what the operating group tried to report.

Therefore investors should not be satisfied either.

The earnings release does not let investors understand the company. Perhaps its because the executive do not have a firm handle on whats going on.