SHERWIN WILLIAMS CO
For the period ended Mar 31, 2025. Filed Apr 29, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 29, 2025
SHW$344.10-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-22.
0000089800-24-000157
Item 2. Management’s Discussion and Analysis of Results of Operations and Financial ConditionCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-29.
0000089800-25-000087
Item 2. Management’s Discussion and Analysis of Results of Operations and Financial ConditionThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 139 previous paragraphs and 125 current paragraphs.
50 unchanged; 56 reworded; 19 added; 32 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
•Consolidated Net sales decreased 1.1% to $5.306 billion in the quarter
Current report
Net sales in the Performance Coatings Group decreased 4.8% primarily due to a 2.6% impact from unfavorable currency translation driven by Latin America. A high-single digit increase in Packaging Net sales, inclusive of an acquisition, was offset by decreases in all other business units.
Current report
Other general expense - net increased $6.9 million in the first quarter of 2025 compared to the same period last year primarily due to increased miscellaneous operating expenses in the Administrative function. See Note 15 in Item 1 for further details.
Current report
The net proceeds from this transaction and other real estate financing transactions are recognized as proceeds from real estate financing transactions within the Financing Activities section of the Statements of Condensed Consolidated Cash Flows. The Company will continue to recognize the related assets within Property, plant and equipment, net on the Consolidated Balance Sheets under US GAAP. These assets will be subject to depreciation over their useful lives in accordance with the Company’s accounting policies. The Company will also allocate payments between interest and repayment of the financing liability over the life of the agreement. See Note 8 in Item 1 and Note 10 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for more information concerning real estate financing.
Current report
Effective April 16, 2025, the Company’s shareholders approved The Sherwin-Williams Company 2025 Equity and Incentive Compensation Plan. See Note 10 in Item 1 for additional information.
Current report
•general business and economic conditions in the United States and worldwide;
Current report
•inflation rates, interest rates, unemployment rates, labor costs, healthcare costs, recessionary conditions, geopolitical conditions, terrorist activity, armed conflicts and wars, public health crises, pandemics, outbreaks of disease and supply chain disruptions;
Current report
•shifts in consumer behavior driven by economic downturns in cyclical segments of the economy;
Current report
•shortages and increases in the cost of raw materials and energy;
Current report
•the loss of any of our largest customers;
Current report
•increased competition or failure to keep pace with developments in key competitive areas of our business;
Current report
•disruptions to our information technology systems, including due to digitization efforts or cybersecurity incidents;
Current report
•policy changes affecting international trade, including import/export restrictions and tariffs;
Current report
•the infringement or loss of our intellectual property rights or the theft or unauthorized use of our trade secrets or other confidential business information;
Current report
•a weakening of global credit markets or changes to our credit ratings;
Current report
•increases in tax rates, or changes in tax laws or regulations;
Current report
•our ability to comply with numerous, complex and increasingly stringent domestic and foreign health, safety and environmental laws, regulations and requirements;
Current report
•our liability related to environmental investigation and remediation activities at some of our currently- and formerly-owned sites;
Current report
•the other risk factors discussed in Part 1, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and our other reports filed with the SEC.
Removed paragraphs (32)
Previous report
•Consolidated Net sales increased 0.7% in the quarter to $6.163 billion
Previous report
Net sales in the Performance Coatings Group was effectively flat as sales volume growth, inclusive of the impact of the 2023 acquisition of SIC Holding GmbH, was fully offset by unfavorable foreign currency translation. Performance was led by Packaging, which increased in all regions, Coil and Industrial Wood.
Previous report
Nine Months Ended September 30, 2024
Previous report
Consolidated Net sales were essentially flat in the first nine months of 2024. Sales volume growth in the Paint Stores and Performance Coatings Groups was offset by lower sales volume in the Consumer Brands Group, inclusive of the impact from the divestiture of the China architectural business and a non-core domestic aerosol business in the prior period. Net sales of all consolidated foreign subsidiaries increased to $3.370 billion in the first nine months of 2024 compared to $3.342 billion in the same period last year. The increase in Net sales for all consolidated foreign subsidiaries was due to growth in the Europe region, partially offset by lower Net sales in the Latin America and Asia regions. Net sales of all operations other than consolidated foreign subsidiaries decreased 0.2% to $14.431 billion in the first nine months of 2024 compared to $14.458 billion in the same period last year.
Previous report
Net sales in the Consumer Brands Group decreased by 8.5% in the first nine months of 2024 primarily due to a mid-single digit percentage sales volume decline primarily due to soft DIY demand in North America and the impact from the divestiture of the China architectural business and a non-core domestic aerosol business in the prior period. In addition, Net sales were unfavorably impacted by foreign currency translation.
Previous report
Net sales in the Performance Coatings Group decreased by 0.4% in the first nine months of 2024 primarily due to selling price decreases, which impacted Net sales by a low-single digit percentage and unfavorable foreign currency translation, partially offset by mid-single digit sales volume growth, inclusive of the acquisition of SIC Holding GmbH in 2023. Performance was led by Industrial Wood and Coil, but was offset by a decrease in General Industrial and Automotive Refinish.
Previous report
Other general expense (income) - net decreased $61.2 million in the third quarter of 2024 compared to the same period last year primarily due to a decrease in provisions for environmental matters, net in the Administrative function and increased net gains on sale or disposition of assets. See Note 15 in Item 1 for further details.
Previous report
Nine Months Ended September 30, 2024
Previous report
Consolidated Cost of goods sold decreased $410.9 million, or 4.3%, in the first nine months of 2024 compared to the same period in 2023 due primarily to moderating raw material costs, partially offset by a low single-digit increase in sales volume.
Previous report
Consolidated gross profit increased $412.5 million in the first nine months of 2024 compared to the same period in 2023 primarily due to moderating raw material costs and higher Net sales. Consolidated gross profit as a percent of consolidated Net sales increased in the first nine months of 2024 to 48.4% compared to 46.1% during the same period in 2023 for these same reasons.
Previous report
The Paint Stores Group’s gross profit in the first nine months of 2024 was higher than the same period last year by $181.8 million due primarily to higher Net sales and moderating raw material costs. The Paint Stores Group’s gross profit as a percent of Net sales increased in the first nine months of 2024 compared to the same period in 2023 for these same reasons. The Consumer Brands Group’s gross profit increased by $206.2 million in the first nine months of 2024 compared to the same period last year due primarily to higher fixed cost absorption in the manufacturing and distribution operations within the segment and moderating raw material costs, partially offset by lower Net sales. The Consumer Brands Group’s gross profit as a percent of Net sales increased in the first nine months of 2024 compared to the same period last year for these same reasons. The Performance Coatings Group’s gross profit increased $11.6 million in the first nine months of 2024 compared to the same period last year primarily due to moderating raw material costs, partially offset by lower Net sales. The Performance Coatings Group’s gross profit as a percent of Net sales increased in the first nine months of 2024 compared to the same period last year for these same reasons.
Previous report
Consolidated SG&A increased $329.7 million in the first nine months of 2024 versus the same period last year primarily due to investments in long-term growth strategies, including expenses to support net new store openings and digital technologies, and higher employee-related costs. As a percent of Net sales, consolidated SG&A increased 180 basis points in the first nine months of 2024 compared to the same period last year for these same reasons.
Previous report
The Paint Stores Group’s SG&A increased $166.9 million in the first nine months of 2024 compared to the same period last year primarily due to investments in long-term growth initiatives, including increased spending from new store openings, costs to support higher sales and higher employee-related costs. The Consumer Brands Group’s SG&A increased $1.0 million in the first nine months of 2024 compared to the same period last year due to higher employee-related costs, partially offset by effective cost control in managing the operations of the business. The Performance Coatings Group’s SG&A increased $15.7 million in the first nine months of 2024 compared to the same period last year due primarily to investments in long-term initiatives. The Administrative function’s SG&A increased $146.1 million in the first nine months of 2024 compared to the same period last year due primarily to higher employee-related costs and increased expenses related to digital technologies and systems.
Previous report
Other general expense (income) - net was income of $30.9 million in the third quarter of 2024 compared to expense of $39.9 million in the same period last year primarily due to a decrease in provisions for environmental matters, net in the Administrative function, increased net gains on sale or disposition of assets and a decrease in miscellaneous expenses. This activity was partially offset by the gain recognized in the prior period related to the divestiture of a business. See Note 15 in Item 1 for further details.
Previous report
For information on impairment recognized in prior periods as a result of the divestiture of the China architectural business, see Notes 3 and 5 in Item 1 and Note 3 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Previous report
Interest expense decreased $5.7 million in the first nine months of 2024 compared to the same period last year primarily due to a decrease in long-term debt outstanding during the first nine months of 2024 compared to the same period last year, partially offset by higher interest expense on short-term borrowings. See Note 6 in Item 1 for additional information on the Company’s outstanding debt.
Previous report
Other expense (income) - net was income of $30.2 million in the first nine months of 2024 compared to income of $17.0 million in the same period last year. The increase is primarily due to lower foreign currency transaction related losses in the current year compared to the prior period and an increase in miscellaneous income, partially offset by a decrease in investment gains. See Note 15 in Item 1 for further details.
Previous report
Diluted net income per share for the first nine months of 2024 increased 10.2% to $8.65 per share compared to $7.85 per share in the first nine months of 2023. Diluted net income per share included a $0.59 and $0.60 per share charge for acquisition-related amortization expense for the first nine months of 2024 and 2023, respectively. In the first nine months of 2023, diluted net income per share included a net charge of $0.09 per share related to activities associated with the Company’s restructuring plan. Foreign currency translation rate changes decreased diluted net income per share by $0.06 in the first nine months of 2024.
Previous report
For information on the Company’s restructuring plan, see Note 4 in Item 1 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Previous report
See Note 8 in Item 1 and Notes 8 and 11 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for more information concerning real estate financing.
Previous report
•general business conditions, including the strength of retail and manufacturing economies and growth in the coatings industry;
Previous report
•changes in general domestic and international economic conditions, including due to changes in inflation rates, interest rates, tax rates, unemployment rates, labor costs, healthcare costs, recessionary conditions, geopolitical conditions, government policies, laws and regulations;
Previous report
•any disruption in the availability of, or increases in the price of, raw material and energy supplies;
Previous report
•disruptions in the supply chain, including those related to industry capacity constraints, raw material availability, transportation and logistics delays and constraints, political instability or civil unrest;
Previous report
•losses of or changes in our relationships with customers and suppliers;
Previous report
•competitive factors, including pricing pressures and product innovation and quality;
Previous report
•cybersecurity incidents and other disruptions to our information technology systems, and our reliance on information technology systems;
Previous report
•our ability to protect or enforce our material trademarks and other intellectual property rights;
Previous report
•adverse changes to our tax positions in U.S. and non-U.S. jurisdictions, including as a result of new or revised tax laws or interpretations;
Previous report
•increasingly stringent domestic and foreign governmental regulations, including those affecting health, safety and the environment;
Previous report
•inherent uncertainties involved in assessing our potential liability for environmental-related activities;
Previous report
•other changes in governmental policies, laws and regulations, including changes in tariff policies, accounting policies and standards; and
Reworded paragraphs (56)
Previous wording
The Sherwin-Williams Company, founded in 1866, and its consolidated wholly owned subsidiaries (collectively, the Company) are engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America with additional operations in the Caribbean region and throughout Europe, Asia and Australia.
Current wording
The Sherwin-Williams Company, founded in 1866, and its consolidated subsidiaries (collectively, the Company) are engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America with additional operations in the Caribbean region and throughout Europe, Asia and Australia.
Previous wording
The Company is structured into three reportable segments - Paint Stores Group, Consumer Brands Group and Performance Coatings Group (collectively, the Reportable Segments) - and an Administrative function in the same way it is internally organized for assessing performance and making decisions regarding the allocation of resources. See Note 18 in Item 1 for further details on the Company’s Reportable Segments.
Current wording
The Company is structured into three reportable segments - Paint Stores Group, Consumer Brands Group and Performance Coatings Group (collectively, the Reportable Segments) - and an Administrative function, which is representative of the way it is internally organized for assessing performance and making decisions regarding the allocation of resources. See Note 18 in Item 1 for further details on the Company’s Reportable Segments.
Previous wording
◦Net sales from stores in the Paint Stores Group open more than twelve calendar months increased 2.2% in the quarter
Current wording
◦Net sales from stores in the Paint Stores Group open more than twelve calendar months increased 1.2% in the quarter
Previous wording
•Diluted net income per share increased 7.8% to $3.18 per share in the quarter compared to $2.95 per share in the third quarter 2023
Current wording
•Diluted net income per share increased 1.5% to $2.00 per share in the quarter compared to $1.97 per share in the first quarter of 2024
Previous wording
•Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in the quarter increased 1.2% to $1.282 billion in the quarter, or 20.8% of Net sales
Current wording
•Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) in the quarter increased 4.6% to $937.0 million, or 17.7% of Net sales
Previous wording
We remain focused on navigating choppy macroeconomic conditions by purposefully executing our differentiated strategy to provide our customers with solutions that make them more productive and profitable. We remain well-positioned in each of our targeted markets and continue to prioritize investments in new stores, sales and technical personnel, innovation, digital and other growth initiatives that will allow us to generate sustained and profitable above-market growth in an increasingly uncertain and competitive landscape.
Current wording
In a macro-economic environment that remains turbulent, we are focused on being a source of stability and reliability for our customers. Our differentiated strategy, Success by Design, has not changed as we seek to provide our customers with solutions that increase their productivity and profitability. We remain well-positioned in each of our targeted markets and continue to prioritize initiatives such as new stores and digital technologies that we believe will allow us to generate sustained and profitable above-market growth in an increasingly uncertain and competitive landscape.
Previous wording
We employ a disciplined capital deployment strategy, while maintaining a balanced approach toward driving value for our customers and returns to our shareholders. We continue to pursue business acquisitions, transactions and investments that fit our long-term growth strategy. We will return value to our shareholders through the payment of dividends and the reinvestment of excess cash for share repurchases of Company stock. We have a strong liquidity position, with $238.2 million in cash and $3.026 billion of unused capacity under our credit facilities at September 30, 2024. We are, and expect to remain, in compliance with bank covenants.
Current wording
We employ a disciplined capital deployment strategy, while maintaining a balanced approach toward driving value for our customers and returns to our shareholders. We continue to pursue business acquisitions, transactions and investments that fit our long-term growth strategy. We will return value to our shareholders through the payment of dividends and the reinvestment of excess cash for share repurchases of Company stock. We have a strong liquidity position, with $199.8 million in cash and $2.148 billion of unused capacity under our credit facilities at March 31, 2025. We are, and expect to remain, in compliance with bank covenants.
Previous wording
The Company has historically experienced, and expects to continue to experience, variability in quarterly results. The results of operations for the three and nine months ended September 30, 2024 are not indicative of the results to be expected for the full year as our business is seasonal in nature, with the majority of Net sales for the Reportable Segments traditionally occurring during the second and third quarters. However, periods of economic uncertainty can alter the Company’s seasonal patterns.
Current wording
The Company has historically experienced, and expects to continue to experience, variability in quarterly results. The results of operations for the three months ended March 31, 2025 are not indicative of the results to be expected for the full year as our business is seasonal in nature, with the majority of Net sales for the Reportable Segments traditionally occurring during the second and third quarters. However, periods of economic uncertainty can alter the Company’s seasonal patterns.
Previous wording
The following discussion and analysis addresses comparisons of material changes in the consolidated financial statements for the three and nine months ended September 30, 2024 and 2023.
Current wording
The following discussion and analysis addresses comparisons of material changes in the condensed consolidated financial statements for the three months ended March 31, 2025 and 2024.
Previous wording
Consolidated Net sales increased by 0.7% in the third quarter of 2024 primarily due to higher sales in the Paint Stores Group and the impact from the acquisition of SIC Holding GmbH in 2023. These increases were partially offset by lower sales in the Consumer Brands and Performance Coatings Groups as well as unfavorable foreign currency translation. Net sales of all consolidated foreign subsidiaries increased to $1.124 billion in the third quarter of 2024 compared to $1.105 billion in the same period last year. The increase in Net sales for all consolidated foreign subsidiaries was due to higher Net sales in the Europe and Asia regions. Net sales of all operations other than consolidated foreign subsidiaries increased to $5.038 billion in the third quarter of 2024 compared to $5.012 billion in the same period last year.
Current wording
Consolidated Net sales decreased by 1.1% in the first quarter of 2025 primarily due to unfavorable foreign currency translation. Lower sales in the Performance Coatings and Consumer Brands Groups were partially offset by higher sales in the Paint Stores Group. Net sales of all consolidated foreign subsidiaries decreased to $1.045 billion in the first quarter of 2025 compared to $1.103 billion in the same period last year. The decrease in Net sales for all consolidated foreign subsidiaries was primarily due to lower Net sales in the Europe and Latin America regions. Net sales of all operations other than consolidated foreign subsidiaries decreased to $4.261 billion in the first quarter of 2025 compared to $4.264 billion in the same period last year.
Previous wording
Net sales in the Paint Stores Group increased by 3.2% in the third quarter of 2024 primarily due to low-single digit sales volume growth and continued realization of higher selling prices implemented earlier in the year. Net sales increased in most professional customer end markets, led by protective and marine, residential repaint and new residential. Net sales from stores open for more than twelve calendar months increased by 2.2% in the third quarter of 2024 compared to last year’s comparable period. Net sales of non-paint products increased 1.0% in the third quarter of 2024 compared to last year’s comparable period. A discussion of changes in volume versus pricing for sales of non-paint products is not pertinent due to the wide assortment of general merchandise sold.
Current wording
Net sales in the Paint Stores Group increased by 2.3% in the first quarter of 2025 primarily due to selling price increases, which impacted Net sales by a mid-single digit percentage, partially offset by a low-single digit percentage decrease in sales volume. Net sales increased in certain professional customer end markets, led by a high-single digit percentage increase in protective and marine and a mid-single digit percentage increase in residential repaint. Net sales from stores open for more than twelve calendar months increased by 1.2% in the first quarter of 2025 compared to last year’s comparable period. Net sales of non-paint products decreased 0.4% in the first quarter of 2025 compared to last year’s comparable period. A discussion of changes in volume versus pricing for sales of non-paint products is not pertinent due to the wide assortment of general merchandise sold.
Previous wording
Net sales in the Consumer Brands Group decreased by 7.5% in the third quarter of 2024 primarily due to soft DIY demand in North America and a 3.6% impact from unfavorable foreign currency translation driven by Latin America. These decreases were partially offset by selling price increases in Latin America, which impacted Net sales by a low-single digit percentage and a low-single digit percentage sales volume increase in Latin America and Europe.
Current wording
Net sales in the Consumer Brands Group decreased by 6.0% in the first quarter of 2025 primarily due to soft DIY demand in North America and a 3.3% impact from unfavorable currency translation driven by Latin America.
Previous wording
Consolidated Cost of goods sold decreased $65.5 million, or 2.0%, in the third quarter of 2024 compared to the same period in 2023 primarily due to improved efficiencies in manufacturing and distribution operations and foreign currency translation rate changes, which decreased Cost of goods sold by approximately 1%. These decreases were partially offset by a low single-digit increase in sales volume.
Current wording
Consolidated Cost of goods sold decreased $89.7 million, or 3.2%, in the first quarter of 2025 compared to the same period in 2024 primarily due to a low-single digit decrease in volume and currency translation rate changes, which decreased Cost of goods sold by 1.7%.
Previous wording
Consolidated gross profit increased $111.3 million in the third quarter of 2024 compared to the same period in 2023 primarily due to higher Net sales in the Paint Stores Group and improved efficiencies in manufacturing and distribution operations. Consolidated gross profit as a percent of consolidated Net sales increased in the third quarter of 2024 to 49.1% compared to 47.7% during the same period in 2023 for these same reasons.
Current wording
Consolidated gross profit increased $28.1 million in the first quarter of 2025 compared to the same period in 2024 primarily due to higher selling prices in the Paint Stores Group, partially offset by lower sales volumes in all segments and currency translation rate changes. Consolidated gross profit as a percent of consolidated Net sales increased in the first quarter of 2025 to 48.2% compared to 47.2% during the same period in 2024 for these same reasons.
Previous wording
The Paint Stores Group’s gross profit in the third quarter of 2024 was higher than the same period last year by $59.6 million due primarily to higher Net sales. The Paint Stores Group’s gross profit as a percent of Net sales was effectively flat in the third quarter of 2024 compared to the same period in 2023. The Consumer Brands Group’s gross profit increased by $55.1 million in the third quarter of 2024 compared to the same period last year due primarily to higher fixed cost absorption in the manufacturing and distribution operations within the segment, partially offset by lower Net sales. The Consumer Brands Group’s gross profit as a percent of Net sales increased in the third quarter of 2024 compared to the same period in 2023 for these same reasons. The Performance Coatings Group’s gross profit decreased $14.1 million in the third quarter of 2024 compared to the same period last year due primarily to lower sales in North America and unfavorable foreign currency related impacts. The Performance Coatings Group’s gross profit as a percent of Net sales decreased in the third quarter of 2024 compared to the same period last year for these same reasons.
Current wording
The Paint Stores Group’s gross profit in the first quarter of 2025 was higher than the same period last year by $79.8 million due primarily to higher Net sales driven by higher selling prices. The Paint Stores Group’s gross profit as a percent of Net sales increased in the first quarter of 2025 compared to the same period in 2024 for these same reasons. The Consumer Brands Group’s gross profit decreased by $32.7 million in the first quarter of 2025 compared to the same period last year due primarily to lower Net sales and unfavorable currency related impacts. The Consumer Brands Group’s gross profit as a percent of Net sales decreased in the first quarter of 2025 compared to the same period in 2024 for these same reasons. The Performance Coatings Group’s gross profit decreased $26.2 million in the first quarter of 2025 compared to the same period last year due primarily to lower Net sales and unfavorable currency related impacts. The Performance Coatings Group’s gross profit as a percent of Net sales increased slightly in the first quarter of 2025 compared to the same period last year.
Previous wording
Consolidated Selling, general and administrative expenses (SG&A) increased $137.2 million in the third quarter of 2024 versus the same period last year primarily due to investments in long-term growth strategies, including expenses to support net new store openings and digital technologies, and higher employee-related costs. As a percent of Net sales, consolidated SG&A increased 200 basis points in the third quarter of 2024 compared to the same period last year for these same reasons.
Current wording
Consolidated Selling, general and administrative expenses (SG&A) decreased $6.0 million in the first quarter of 2025 versus the same period last year primarily due to effective cost control in managing the operations of the business and currency translation rate changes, partially offset by modestly higher employee-related costs. As a percent of Net sales, consolidated SG&A increased 30 basis points in the first quarter of 2025 compared to the same period last year.
Previous wording
The Paint Stores Group’s SG&A increased $75.0 million in the third quarter of 2024 compared to the same period last year due primarily due to investments in long-term growth initiatives, including increased spending from new store openings, and higher employee-related costs. The Consumer Brands Group’s SG&A decreased $5.4 million in the third quarter of 2024 compared to the same period last year primarily due to effective cost control in managing the operations of the business, partially offset by higher employee-related costs. The Performance Coatings Group’s SG&A decreased $0.5 million in the third quarter of 2024 compared to the same period last year primarily due to lower employee-related costs. The Administrative function’s SG&A increased $68.1 million in the third quarter of 2024 compared to the same period last year due primarily to higher employee-related costs and increased expenses related to digital technologies and systems.
Current wording
The Paint Stores Group’s SG&A increased $27.2 million in the first quarter of 2025 compared to the same period last year due primarily due to higher employee-related costs. The Consumer Brands Group’s SG&A decreased $5.4 million in the first quarter of 2025 compared to the same period last year primarily due to lower employee-related costs and currency translation rate changes. The Performance Coatings Group’s SG&A decreased $6.8 million in the first quarter of 2025 compared to the same period last year primarily due to effective cost control in managing the operations of the business and currency translation rate changes. The Administrative function’s SG&A decreased $21.0 million in the first quarter of 2025 compared to the same period last year due primarily to effective cost control in managing the operations of the business, including spending on digital project investments and lower employee-related costs.
Previous wording
Interest expense increased $1.5 million in the third quarter of 2024 compared to the same period last year primarily due to an increase in short-term borrowings. See Note 6 in Item 1 for additional information on the Company’s outstanding debt.
Current wording
Interest expense increased $0.8 million in the first quarter of 2025 compared to the same period last year. See Note 6 in Item 1 for additional information on the Company’s outstanding debt.
Previous wording
Other expense (income) - net was expense of $9.5 million in the third quarter of 2024 compared to income of $8.0 million in the same period last year primarily due to higher foreign currency transaction losses in the current year and an increase in miscellaneous expenses, partially offset by an increase in miscellaneous income. See Note 15 in Item 1 for further details.
Current wording
Other expense (income) - net was expense of $2.9 million in the first quarter of 2025 compared to income of $7.7 million in the same period last year primarily due to higher currency transaction losses in the current year, a decrease in net investment gains and an increase in miscellaneous expenses. See Note 15 in Item 1 for further details.
Previous wording
The effective tax rate was 21.2% for the third quarter of 2024 compared to 24.5% for the third quarter of 2023, and 22.4% for the first nine months of 2024 compared to 22.9% for the first nine months of 2023. The decrease in the effective tax rate for both periods was primarily due to a more favorable impact of tax benefits related to employee share-based payments. The other significant components of the Company’s effective tax rate were consistent year-over-year in both periods. See Note 16 in Item 1 for further details.
Current wording
The effective tax rate was 22.8% for the first quarter of 2025 compared to 21.1% for the first quarter of 2024. The increase in the effective tax rate was primarily due to a less favorable impact of tax benefits related to employee share-based payments. The other significant components of the Company’s effective tax rate were consistent year-over-year. See Note 16 in Item 1 for further details.
Previous wording
Diluted net income per share in the third quarter of 2024 increased 7.8% to $3.18 per share compared to $2.95 per share in the third quarter of 2023. Diluted net income per share included a $0.19 per share charge for acquisition-related amortization expense in both the third quarter of 2024 and 2023. In the third quarter of 2023, diluted net income per share also included a charge of $0.06 per share related to activities associated with the Company’s restructuring plan. Foreign currency translation rate changes decreased diluted net income per share by $0.04 in the third quarter of 2024.
Current wording
Diluted net income per share increased 1.5% to $2.00 per share in the first quarter of 2025 compared to $1.97 per share in the first quarter of 2024. Diluted net income per share in the first quarter of 2025 included charges for for acquisition-related amortization expense of $0.19 per share and severance and other restructuring expenses of $0.06 per share. Diluted net income per share in the first quarter of 2024 included a charge for acquisition-related amortization expense of $0.20 per share. Foreign currency translation rate changes decreased diluted net income per share by $0.03 in the first quarter of 2025.
Previous wording
The Company’s financial condition and liquidity remained strong at September 30, 2024. The Company generated $2.219 billion in Net operating cash during the first nine months of 2024. The Company returned cash of $1.972 billion to its shareholders in the form of dividends and share repurchases during the first nine months of 2024. The Company’s EBITDA increased 5.5% to $3.616 billion for the first nine months of 2024. Refer to the Non-GAAP Financial Measures section below for the definition and calculation of EBITDA.
Current wording
The Company’s financial condition and liquidity remained strong at March 31, 2025. The Company used $61.1 million in Net operating cash during the first quarter of 2025 primarily as a result of seasonal increases in working capital requirements, partially offset by Net income. This Net operating cash usage was funded through an increase in Short-term borrowings. The Company returned cash of $552.1 million to its shareholders in the form of dividends and share repurchases during the first quarter of 2025. The Company’s EBITDA increased 2.4% to $917.7 million for the first three months of 2025. Refer to the Non-GAAP Financial Measures section below for the definition and calculation of EBITDA.
Previous wording
At September 30, 2024, the Company had Cash and cash equivalents of $238.2 million and total debt outstanding of $10.140 billion. Total debt, net of Cash and cash equivalents, was $9.902 billion. The Company continues to maintain sufficient short-term borrowing capacity at reasonable rates, and the Company has sufficient cash on hand and total available borrowing capacity to fund its current operating requirements.
Current wording
At March 31, 2025, the Company had Cash and cash equivalents of $199.8 million and total debt outstanding of $10.776 billion. Total debt, net of Cash and cash equivalents, was $10.577 billion. The Company continues to maintain sufficient short-term borrowing capacity at reasonable rates, and the Company has sufficient cash on hand and total available borrowing capacity to fund its current operating requirements.
Previous wording
Net working capital, defined as Total current assets less Total current liabilities, decreased $819.4 million to a deficit of $1.244 billion at September 30, 2024 compared to a deficit of $424.4 million at September 30, 2023. The net working capital decrease is due to an increase in current liabilities and a decrease in current assets.
Current wording
Net working capital, defined as Total current assets less Total current liabilities, decreased $195.9 million to a deficit of $1.837 billion at March 31, 2025 compared to a deficit of $1.641 billion at March 31, 2024. The net working capital decrease is due to an increase of $393.2 million in current liabilities partially offset by an increase in current assets of $197.3 million.
Previous wording
Current asset balances decreased $224.5 million at September 30, 2024 compared to September 30, 2023 primarily due to a decrease in Cash and cash equivalents of $265.2 million primarily due to the timing of the SIC Holding acquisition in October 2023 and a decrease of $14.9 million in Other current assets, partially offset by an increase of $32.5 million in Accounts receivable, net and an increase in Inventories of $23.1 million.
Current wording
Current asset balances increased $197.3 million at March 31, 2025 compared to March 31, 2024 primarily due to an increase in Inventories of $137.2 million, an increase in Other current assets of $36.2 million and an increase in Cash and cash equivalents of $19.9 million.
Previous wording
Current liability balances increased $594.9 million at September 30, 2024 compared to September 30, 2023 primarily due to an increase in Short-term borrowings of $576.9 million, an increase in Other accruals of $140.3 million, primarily related to environmental liabilities, liabilities from contracts with customers, commitments related to Non-Traded Investments and miscellaneous other current liabilities, an increase in Accounts payable of $112.9 million and an increase in the Current portion of operating lease liabilities of $21.7 million, partially offset by a decrease in Accrued taxes of $165.3 million, a decrease in the Current portion of long-term debt of $49.3 million and a decrease of $42.3 million in compensation and taxes withheld. At September 30, 2024 and 2023, the Company’s current ratio was 0.83 and 0.94, respectively, compared to 0.83 at December 31, 2023.
Current wording
Current liability balances increased $393.2 million at March 31, 2025 compared to March 31, 2024 primarily due to an increase in Short-term borrowings of $542.2 million, an increase in Accounts payable of $59.0 million and an increase in the Current portion of operating lease liabilities of $16.1 million, partially offset by a decrease in the Current portion of long-term debt of $198.3 million and a decrease in Other accruals of $18.2 million, primarily related to decreases in environmental liabilities and miscellaneous other current liabilities, partially offset by an increase in commitments related to Non-Traded Investments. The Company’s current ratio was 0.77, 0.79 and 0.78 at March 31, 2025, December 31, 2024 and March 31, 2024, respectively.
Previous wording
Net property, plant and equipment increased $507.9 million in the first nine months of 2024 and $764.1 million in the twelve months since September 30, 2023. The increase in the first nine months was primarily due to capital expenditures of $730.6 million, partially offset by depreciation expense of $217.3 million and foreign currency translation and other adjustments of $5.4 million. Since September 30, 2023, the increase was primarily due to capital expenditures of $1.080 billion and foreign currency translation and other adjustments of $5.6 million, partially offset by depreciation expense of $291.6 million and the sale or disposition of fixed assets of $29.9 million.
Current wording
Net property, plant and equipment increased $130.2 million in the first three months of 2025 and $654.6 million in the twelve months since March 31, 2024. The increase in the first three months was primarily due to capital expenditures of $180.9 million and currency translation and other adjustments of $29.2 million, partially offset by depreciation expense of $79.9 million. Since March 31, 2024, the increase was primarily due to capital expenditures of $935.9 million and assets acquired through business combinations of $41.0 million, partially offset by depreciation expense of $306.2 million, the sale or disposition of fixed assets of $10.7 million and currency translation and other adjustments of $5.4 million.
Previous wording
Capital expenditures primarily represented expenditures related to construction activities associated with the new headquarters and research and development (R&D) center in the Administrative function. Construction of the new headquarters and R&D center is expected to be complete in 2025. In addition, capital expenditures were related to manufacturing capacity expansion, operational efficiencies and maintenance projects in the Consumer Brands and Performance Coatings Groups and the opening of new paint stores and renovation and improvements in existing stores in the Paint Stores Group.
Current wording
Capital expenditures primarily represented expenditures related to construction activities associated with the new global headquarters and research and development (R&D) center in the Administrative function. Construction of the new global headquarters and R&D center is expected to be complete in 2025. Also included in 2025 capital expenditures were expenditures related to manufacturing capacity expansion, operational efficiencies and maintenance projects in the Consumer Brands and Performance Coatings Groups and the opening of new paint stores and renovation and improvements in existing stores in the Paint Stores Group.
Previous wording
In 2024, the Company expects to spend approximately the same as 2023 for capital expenditures, which it will fund primarily through the generation of operating cash. Core capital expenditures are targeted to be approximately 2% of Net sales in 2024 and are expected to be for investments in various productivity improvement and maintenance projects at existing manufacturing, distribution and R&D facilities and new store openings. Additionally, the Company will continue to construct its new headquarters and R&D center. Refer to “Real Estate Financing” below for further information on the financing transaction for the new headquarters.
Current wording
In 2025, the Company expects to spend slightly less than 2024 for capital expenditures, which it will fund primarily through the generation of operating cash. Core capital expenditures, which exclude expenditures associated with the new global headquarters and R&D center, are expected to be for investments in various productivity improvement and maintenance projects at existing manufacturing, distribution and R&D facilities and new store openings. Refer to “Real Estate Financing” below for further information on the financing transaction for the new global headquarters.
Previous wording
In December 2022, the Company closed a transaction to sell and subsequently lease back its partially-constructed new headquarters. As part of the terms of the transaction, the Company is contractually obligated for completing the construction of the building and related improvements at the new headquarters. This transaction did not meet the criteria for recognition as an asset sale under U.S. generally accepted accounting principles (US GAAP) and as such, was accounted for as a real estate financing transaction. The Company expects to receive total proceeds approximating $800 million to $850 million on an incremental basis until completion of construction. The initial lease term includes the construction period and extends for 30 years thereafter, and the Company has the right and option to extend the lease term. The lease payment amounts during the construction period are dependent upon the timing and amount of total reimbursement of construction and other costs received by the Company. The amount of the lease payments during the initial 30 year lease term will be calculated upon completion of the construction period and receipt of total reimbursement of construction and other costs. Once determinable, this is expected to result in a significant increase in the Company’s long-term contractual obligations.
Current wording
In December 2022, the Company closed a transaction to sell and subsequently lease back its partially-constructed new global headquarters. As part of the terms of the transaction, the Company is contractually obligated for completing the construction of the building and related improvements at the new global headquarters. This transaction did not meet the criteria for recognition as an asset sale under U.S. generally accepted accounting principles (US GAAP) and as such, was accounted for as a real estate financing transaction. The Company received the final proceeds for the new global headquarters in the first quarter of 2025 for a total of $800 million. The initial lease term includes the construction period and extends for 30 years thereafter, and the Company has the right and option to extend the lease term. The lease payment amounts during the construction period are dependent upon the timing and amount of total reimbursement of construction and other costs received by the Company. Lease payments over the next twelve months are expected to be approximately $50 million. The amount of the lease payments during the initial 30 year lease term will be calculated upon completion of the construction period. Once determinable, this is expected to result in a significant increase in the Company’s long-term contractual obligations.
Previous wording
Goodwill increased $31.0 million from December 31, 2023 and increased $244.7 million from September 30, 2023. The increase during the first nine months of 2024 was primarily due to purchase accounting allocations of $27.1 million and foreign currency translation fluctuations of $3.9 million. The increase over the twelve month period from September 30, 2023 was primarily due to purchase accounting allocations of $181.3 million and foreign currency translation fluctuations and other adjustments of $63.4 million.
Current wording
Goodwill increased $128.3 million from December 31, 2024 and increased $87.0 million from March 31, 2024. The increase during the first three months of 2025 was primarily due to purchase accounting allocations of $74.8 million and foreign currency translation fluctuations of $53.5 million. The increase over the twelve month period from March 31, 2024 was primarily due to purchase accounting allocations of $95.8 million, partially offset by foreign currency translation fluctuations and other adjustments of $8.8 million.
Previous wording
Intangible assets decreased $223.6 million from December 31, 2023 and $167.1 million from September 30, 2023. The decrease during the first nine months of 2024 was primarily due to amortization of $244.8 million and foreign currency translation fluctuations and other adjustments of $0.4 million, partially offset by capitalized software of $21.6 million. The decrease over the twelve month period from September 30, 2023 was primarily due to amortization of $319.6 million and trademark impairment of $24.0 million, partially offset by purchase accounting allocations of $110.7 million, capitalized software of $21.6 million, and foreign currency translation fluctuations and other adjustments of $44.2 million.
Current wording
Intangible assets decreased $39.8 million from December 31, 2024 and $284.1 million from March 31, 2024. The decrease during the first three months of 2025 was primarily due to amortization of $81.0 million, partially offset by currency translation fluctuations and other adjustments of $41.2 million. The decrease over the twelve month period from March 31, 2024 was primarily due to amortization of $325.6 million and currency translation fluctuations and other adjustments of $17.5 million, partially offset by capitalized software of $30.7 million and purchase accounting allocations of $28.3 million.
Previous wording
See Note 5 in Item 1 for further details concerning the Company’s Goodwill and Intangible assets and Note 3 in Item 1 for information on the impairment test performed as a result of the China architectural business divestiture in in the third quarter of 2023. In addition, see Note 7 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for more information concerning the Company’s Goodwill and Intangible assets.
Current wording
See Note 5 in Item 1 and Note 6 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for more information concerning the Company’s Goodwill and Intangible assets.
Previous wording
Other assets increased $234.6 million from December 31, 2023 and $331.3 million from September 30, 2023. The increase in the first nine months of 2024 and from September 30, 2023 was primarily due to an increase in Non-Traded Investments and other assets related to contracts with customers, deposits, including the deposit related to the acquisition that closed in October 2024 (see Note 3 in Item 1), and assets related to cloud computing arrangements. See Note 1 in Item 1 for further details on the Company’s Non-Traded Investments.
Current wording
Other assets increased $126.8 million from December 31, 2024 and $459.2 million from March 31, 2024. The increase in the first quarter of 2025 was primarily due to an increase in Non-Traded Investments, partially offset by a decrease in assets related to cross currency swap contracts. The increase from March 31, 2024 was primarily due to an increase in Non-Traded Investments, finance lease right-of-use (ROU) assets and assets related to cloud computing arrangements. See Notes 1 and 12 in Item 1 and Notes 1 and 9 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 in for further information.
Previous wording
Deferred income taxes decreased $51.4 million from December 31, 2023 and $16.7 million from September 30, 2023 primarily due to amortization of acquisition-related intangible assets.
Current wording
Deferred income taxes decreased $21.5 million from December 31, 2024 and $80.3 million from March 31, 2024 primarily due to amortization of acquisition-related intangible assets.
Previous wording
Depreciation of capital expenditures and other expenses related to ongoing environmental compliance measures were included in the normal operating expenses of conducting business. The Company’s capital expenditures, depreciation and other expenses related to ongoing environmental compliance measures were not material to the Company’s financial condition, liquidity, cash flow or results of operations during the first nine months of 2024. Management does not expect that such capital expenditures, depreciation and other expenses will be material to the Company’s financial condition, liquidity, cash flow or results of operations in 2024. See Notes 8 and 15 in Item 1 for further information on environmental-related long-term liabilities.
Current wording
Depreciation of capital expenditures and other expenses related to ongoing environmental compliance measures were included in the normal operating expenses of conducting business. The Company’s capital expenditures, depreciation and other expenses related to ongoing environmental compliance measures were not material to the Company’s financial condition, liquidity, cash flow or results of operations during the first three months of 2025. Management does not expect that such capital expenditures, depreciation and other expenses will be material to the Company’s financial condition, liquidity, cash flow or results of operations in 2025. See Notes 8 and 15 in Item 1 for further information on environmental-related long-term liabilities.
Previous wording
There have been no significant changes to the Company’s contractual obligations and commercial commitments in the first nine months of 2024 as summarized in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
There have been no significant changes to the Company’s contractual obligations and commercial commitments in the first three months of 2025 as summarized in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
Shareholders’ equity increased $440.3 million during the first nine months of 2024 primarily as a result of Net income of $2.201 billion and an increase in Other capital of $277.8 million mainly associated with stock-based compensation expense and stock option exercises. These increases were partially offset by $1.444 billion of treasury stock activity mainly attributable to treasury stock repurchases, cash dividends paid on common stock of $543.6 million and a decrease in AOCI of $51.9 million mainly due to foreign currency translation adjustments.
Current wording
Shareholders’ equity increased $78.9 million during the first three months of 2025 primarily as a result of Net income of $503.9 million, an increase in AOCI of $102.3 million mainly due to currency translation adjustments and an increase in Other capital of $46.2 million mainly associated with stock-based compensation expense and stock option exercises. These increases were partially offset by $373.2 million of treasury stock activity mainly attributable to treasury stock repurchases and cash dividends paid on common stock of $200.4 million.
Previous wording
Shareholders’ equity increased $376.1 million since September 30, 2023 primarily as a result of Net income of $2.558 billion and an increase in Other capital of $367.5 million mainly associated with stock-based compensation expense and stock option exercises. These increases were partially offset by $1.931 billion of treasury stock activity mainly attributable to treasury stock repurchases, cash dividends paid on common stock of $698.9 million and an increase in AOCI of $80.2 million mainly due to foreign currency translation adjustments.
Current wording
Shareholders’ equity increased $626.4 million since March 31, 2024 primarily as a result of Net income of $2.680 billion and an increase in Other capital of $323.6 million mainly associated with stock-based compensation expense and stock option exercises. These increases were partially offset by $1.569 billion of treasury stock activity mainly attributable to treasury stock repurchases, cash dividends paid on common stock of $741.3 million and a decrease in AOCI of $67.9 million mainly due to currency translation adjustments.
Previous wording
During the first nine months of 2024, the Company purchased 4.4 million shares of its common stock for treasury purposes through open market purchases. The Company acquires its common stock for general corporate purposes, and depending on its cash position and market conditions, it may acquire additional shares in the future. The Company had remaining authorization at September 30, 2024 to purchase 35.3 million shares of its common stock.
Current wording
During the first three months of 2025, the Company purchased 1.0 million shares of its common stock for treasury purposes through open market purchases. The Company acquires its common stock for general corporate purposes, and depending on its cash position and market conditions, it may acquire additional shares in the future. The Company had remaining authorization at March 31, 2025 to purchase 33.4 million shares of its common stock.
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Previous report — wording carried elsewhere
Net sales in the Paint Stores Group increased by 2.5% in the first nine months of 2024 primarily due to low-single digit sales volume growth and realization of higher selling prices that were implemented earlier in the year. Net sales from stores open for more than twelve calendar months increased 1.6% in the first nine months of 2024 compared to last year’s comparable period. Net sales of non-paint products increased 0.5% in the first nine months of 2024 compared to last year’s comparable period. A discussion of changes in volume versus pricing for sales of products other than paint is not pertinent due to the wide assortment of general merchandise sold.