Why did SHW's Q1 2024 earnings fall short of forecasts?

Sherwin-Williams' (SHW) Q1 2024 earnings fell short of forecasts due to several factors impacting its financial performance: 1. **Revenue Decline**: The company's total revenue for the quarter was $5.3 billion, which was lower than the expected $5.21 billion. This decline in revenue was a result of lower sales in the Consumer Brands segment, due to weaker DIY demand in North America, and divestitures. These factors were exacerbated by unfavorable currency impacts. 2. **Net Income Impact**: Despite the revenue shortfall, Sherwin-Williams reported a net income of $480.1 million for the quarter, which included an EPS surprise of $0.02. This positive surprise was a result of cost-cutting measures and supply chain efficiency improvements, which helped boost segment margins and net profitability. |code|Ticker|Name|Date|Net Income|market_code| |---|---|---|---|---|---| |SHW|SHW.N|The Sherwin-Williams|2024 Q1|5.052E8|169| |SHW|SHW.N|The Sherwin-Williams|2024 Q2|8.899E8|169| |SHW|SHW.N|The Sherwin-Williams|2024 Q3|8.062E8|169| |SHW|SHW.N|The Sherwin-Williams|2024 Q4|4.801E8|169| 3. **Analyst Expectations**: Analysts had expected Sherwin-Williams to post earnings of $2.77 per share for the quarter, but the company reported earnings of $3.20, delivering a surprise of +15.52%. This suggests that the forecast miss may have been due to underestimating the company's cost management and operational efficiency. In conclusion, Sherwin-Williams' Q1 2024 earnings fell short of forecasts primarily due to lower-than-expected revenues, particularly in the Consumer Brands segment, and divestitures. However, the company's cost-cutting measures and supply chain efficiency improvements helped mitigate these effects and resulted in a positive net income surprise.