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Sherwin-Williams Lowers Guidance, Citing Supply Chain and Labor Issues

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Sherwin-Williams paint

Daniel Acker/Bloomberg

Sherwin-Williams shares slid Friday after the paint maker lowered its guidance to account for supply-chain and labor issues.

The company said it now expects fourth-quarter adjusted earnings of $1.35 a share, below the FactSet consensus of $1.68. It is also expecting sales of $4.762 billion, in line with consensus of $4.764 billion.

For the full year, the company predicts earnings per share to be about $8.15, lower than previous guidance of between $8.35 and $8.55 a share, and consensus estimates of $8.48 a share. Net sales for the year were forecast at $19.94 billion, in line with analysts’ expectations.

Sherwin-Williams (ticker: SHW ) attributed the lower-than-expected earnings to a shortfall in its Americas operation, where sales slowed down due to strains in raw material availability and Covid-related labor headwinds in December.

“While availability of some raw materials has improved slightly, others including select resins and additives specific to our professional contractor products remain in tight supply,” Chief Executive John Morikis said in a press release. “Logistics and transportation issues have further impacted the supply chain.”

Going into 2022, demand remains strong, but Morikis foresees raw material availability and labor constraints to continue throughout the first quarter. To offset costs, the company will begin hiking prices across its Americas Group by 12% starting Feb. 1.

The stock was down 2.1% to $310.74 on Friday. Shares gained 32% last year, but have fallen almost 10% in 2022.

Write to Sabrina Escobar at [email protected]