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Call sheet · Q1'26

Sherwin-Williams (SHW)

Q1'26 earnings call · held April 28, 2026 · compared with the Q4'25 call · management-credibility review
9/12
Disclosure score
2 medium, 4 low flags
Financial quality
Bottom line
The sleeper story is raw material margin compression that management is downplaying with conservative guidance - propylene up 50% with 75% basket exposure suggests Q2/Q3 margins under more pressure than the 'low to mid single digit' raw cost guide implies. The obvious headline of continued share gains and revenue beats is real, but the binding constraint is their shift to surgical pricing suggesting they lack broad-based pricing power in this environment. Most revealing quote: 'We're not looking for all volume' while simultaneously cutting volume guidance - they're cherry-picking customers and ceding market share battles they can't win profitably. My view changes if they show pricing realization above low single digits or if raw material inflation moderates significantly.

The 30-second version

  • Raw material inflation call is suspiciously conservative
  • Share gains acceleration masked by volume guidance cut
  • Surgical pricing strategy reveals lack of pricing power

What changed this quarter

MetricQ4'25Q1'26Change
Consolidated SalesMid single-digit increase in Q4High single-digit increase in Q1Acceleration driven by core performance
Gross Margin ExpansionFlattish in Q4 excluding Suvenil90 basis points expansion (14th out of 15 quarters)Strong momentum continues
Adjusted Diluted EPSUp 6.7% in Q4Mid single-digit increase in Q1Consistent growth trajectory
Paint Stores Group SalesMid single-digit increase in Q4Mid single-digit increase in Q1Steady performance
Residential RepaintJust below mid single-digit growth in Q4Returned to mid single-digit growth in Q1Re-acceleration in share gains
Protective & MarineHigh single-digit growth in Q4Double-digit growth in Q1 (7th straight quarter)Sustained momentum in infrastructure/data center play
Performance Coatings SalesHigh end of expectations in Q4Slightly above mid single-digit rangeBeating expectations despite industrial weakness
Packaging SalesHigh single-digit growth in Q4High single-digit growth vs high single-digit compImpressive consistency against tough comparison
Consumer Brands Adj Segment MarginDecreased including Suvenil impact in Q4Increased with 34.3% flow-throughStrong operational leverage
Net Operating Cash$3.5 billion full year 2025Improved by $200 million in Q1Strong cash generation continues

Accountability tracked

7 new promises made5 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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