Sherwin-Williams Q1 2025: Navigating Contradictions in Tariffs, Margins, and Market Sentiment

Tariff impact and pricing strategy, gross margin performance, volume growth expectations, customer sentiment and market outlook, and gross margin performance and cost management are the key contradictions discussed in Sherwin-Williams' latest 2025Q1 earnings call.



Sales and Market Dynamics:
- Sherwin-Williams delivered consolidated sales within their guided range, with growth in the Paint Stores Group offset by softness in other segments.
- Sales were up by a low single-digits percentage in the Paint Stores Group, while volumes decreased by a low single-digits percentage.
- The growth was primarily driven by price, with price mix up by mid-single-digits and a low single-digits decline in volume.

Gross Margin and Supply Chain Efficiency:
- Gross margin and gross profit dollars expanded, supported by a mid-single-digits increase in price mix and supply chain efficiencies.
- Despite flat raws year-over-year, the company benefited from improvements in supply chain efficiencies and cost control measures.
- Continued simplification and digitization efforts contributed to these efficiencies.

Segment Performance:
- Protective and Marine grew by a high single-digits percentage, driven by strong demand in oil and gas, water and wastewater, and infrastructure projects.
- Residential Repaint sales increased by a mid-single-digits percentage, supported by prior growth investments and new accounts.
- Commercial and property maintenance sales remained under pressure due to weak commercial construction completions and delayed CapEx spending.

Tariffs and Pricing Strategy:
- The company anticipates a low single-digits percentage increase in raws for 2025, with additional price increases being a possibility if tariffs continue to impact costs.
- Tariffs have been felt mainly in applicators, pigments, and industrial resins, and the company is actively evaluating price increase levers.
- Pricing strategies are dependent on the volatility and duration of tariffs, with a willingness to act if deemed necessary.