CLEVELAND, Ohio — The Sherwin-Williams Co. announced its financial results for the second quarter and six months ended June 30, 2010. Compared to the same periods in 2009, consolidated net sales increased $195.2 million, or 10 percent, to $2.143 billion in the quarter and increased $210 million, or 6 percent, to $3.709 billion in six months.
Favorable currency translation rate changes increased consolidated net sales 1.3 percent in the quarter and 1.9 percent in six months. Acquisitions increased consolidated net sales 1.9 percent in the quarter and 1.1 percent in six months.
Diluted net income per common share in the quarter increased to $1.64 per share from $1.35 per share in 2009. Charges during the quarter of $.08 per share, relating to costs to repurchase $84.9 million in long-term debt, were not included in the EPS guidance for the second quarter or full year 2010 issued on April 22, 2010. In six months, diluted net income per common share increased to $1.94 per share, including costs of the debt repurchase in second quarter 2010 and the $.10 per share relating to the health care legislation in first quarter 2010, from $1.66 per share last year. Acquisitions had an unfavorable impact on second quarter diluted net income per common share that offset favorable currency translation rate changes in the quarter. For the year, favorable currency translation rate changes more than offset the dilution from acquisitions resulting in an increase of $.02 per share on diluted net income per common share.
Net sales in the Paint Stores Group increased 6.4 percent to $1.245 billion in the quarter and increased 1.3 percent to $2.096 billion in six months due to improving domestic architectural paint sales primarily to residential repaint contractors and improving industrial maintenance product sales. Net sales from stores open for more than twelve calendar months increased 5.9 percent in the quarter and 1 percent in six months over last year’s comparable periods. Paint Stores Group segment profit increased to $212 million in the quarter from $193.5 million last year and increased to $259.7 million in six months from $250.1 million last year due primarily to higher second quarter sales volume and selling price increases partially offset by continuing raw material cost increases and increases in selling, general and administrative expenses. Segment profit as a percent to net sales increased in the quarter to 17.0 percent from 16.5 percent last year and increased in six months to 12.4 percent from 12.1 percent in 2009.
Net sales of the Consumer Group increased 11.9 percent to $410.2 million in the quarter and 7.3 percent to $702.4 million in six months due primarily to improving demand at some of the segment’s retail, industrial and institutional customers. Segment profit increased to $80.7 million in the quarter from $66.1 million last year and increased to $118.2 million in six months from $96.3 million last year. Segment profit in the quarter increased as a percent to net external sales to 19.7 percent from 18 percent last year and increased in six months to 16.8 percent from 14.7 percent due primarily to increased sales and cost savings realized from previous year site rationalizations partially offset by increasing raw material costs.
The Global Finishes Group’s net sales stated in U.S. dollars increased 18.8 percent to $486.5 million in the quarter and increased 17.5 percent to $907.6 million in six months due primarily to acquisitions, favorable currency translation rate changes and higher paint sales volume. In the quarter and six months, acquisitions increased net sales in U.S. dollars by 9.2 percent and 4.9 percent, respectively, and favorable currency translation rate changes increased net sales by 5 percent and 7.2 percent, respectively. Stated in U.S. dollars, Global Finishes Group segment profit in the quarter increased to $40 million from $31.2 million and increased in six months to $63 million from $36.5 million last year due primarily to increased paint sales volume and good expense control. Favorable foreign currency translation rates had a positive effect of $2.3 million on segment profit in the quarter and $7.6 million in six months. Acquisitions had an unfavorable impact on segment profit of 0.9 percent of net sales in the quarter and 0.5 percent of net sales in six months. As a percent to net external sales, segment profit was 8.2 percent in the quarter versus 7.6 percent last year and 6.9 percent in six months compared to 4.7 percent in 2009.
The company acquired 1.95 million shares of its common stock through open market purchases in the quarter and 2.35 million shares in six months. The company had remaining authorization at June 30, 2010 to purchase 8.40 million shares.
Commenting on the second quarter and six months financial results, Christopher M. Connor, chairman and CEO, said, "We are pleased that all our operating segments achieved sales and operating profit growth on a year over year basis in this uncertain environment. Our operating segments continue to control costs and have implemented price increases to offset the current raw material increases."
