Sherwin-Williams' Q2 growth falls short of expectations

Shares of Sherwin-Williams dropped Thursday morning after the company released its second-quarter earnings report, which highlighted modest growth that fell below economists' expectations.

Though the company pulled in revenues of $3.22 billion, up 2.8% year-over-year, that was well below the 5% growth rate many expected, according to Motley Fool.

Net income for the quarter ended June 30 received a decent boost of 8% to $378.1 million, but that put adjusted net earnings of $4.06 per share below the consensus forecast.

Much of the sales growth was owing to higher paint sales volume in the Paint Stores Group, which contributed to a 6.2% net sales increase.

However, the company posted declines across other segments, including the Consumer Group (which decreased 2.6%, primarily owing to the initial shipments of the HGTV Home by Sherwin-Williams paint to Lowe's stores in the second quarter of last year).

Global Finishes was down 1.3%, and the Latin American Coatings Group was down 11.2%.

John Morikis, president and CEO, said, "We are pleased to report record sales and earnings per share from the continued positive sales volume and strong operating results of our Paint Stores Group and operating margin improvements in our Global Finishes Group. Our Paint Stores Group posted another quarter of positive operating results and architectural volume growth. Consumer Group continues to invest in customer programs to increase sales and improved its six month operating results through improved operating efficiencies. Our Global Finishes Group improved its operating results through improved operating efficiencies and good cost control. The Latin America Coatings Group continues to manage through the negative effects of currency devaluation and weak end market demand in some geographies."