Earnings call transcript: Sherwin-Williams Q1 2025 reports EPS beat, stock rises

Sherwin-Williams Co. (SHW) reported its first-quarter 2025 earnings, showcasing earnings per share (EPS) of $2.25, slightly surpassing the forecasted $2.20. Despite the revenue coming in at $5.31 billion, below the expected $5.42 billion, the company’s stock price surged by 4.56% in pre-market trading, reflecting positive investor sentiment. The stock closed at $332.20 the previous day, and the current movement positions it closer to its 52-week high of $400.42. According to InvestingPro data, the company commands a substantial market capitalization of $86.8 billion and trades at a P/E ratio of 32.3x, suggesting premium valuation metrics relative to its peers.

Key Takeaways

• Sherwin-Williams exceeded EPS expectations for Q1 2025.
• Revenue fell short of forecasts despite strong performance in certain segments.
• Stock price increased by 4.56% in pre-market trading.
• The company reaffirmed its full-year sales and EPS guidance.
• Strategic acquisitions and new product launches are underway.

Company Performance

Sherwin-Williams demonstrated resilience in a challenging market by achieving an EPS growth of 3.7% year-over-year. The company’s strategic focus on innovation and market expansion, including the acquisition of BASF’s architectural business in Brazil, contributed to its performance. Despite a flat to declining residential repaint market and weak commercial construction spending, Sherwin-Williams managed to gain market share, particularly in the Protective and Marine segments. InvestingPro analysis reveals the company maintains impressive profitability with a gross margin of 48.47% and has consistently raised its dividend for 32 consecutive years, demonstrating strong financial discipline.

Financial Highlights

• Revenue: $5.31 billion, lower than the forecast of $5.42 billion.
• Earnings per share: $2.25, above the forecast of $2.20.
• Gross margin and gross profit increased.
• SG&A expenses decreased due to spending control.

Earnings vs. Forecast

Sherwin-Williams’ EPS of $2.25 surpassed the forecast by $0.05, marking a positive surprise. However, the revenue of $5.31 billion was below the anticipated $5.42 billion, reflecting a shortfall of approximately 2%. Despite this, the EPS beat indicates effective cost management and operational efficiency.

Market Reaction

Following the earnings announcement, Sherwin-Williams’ stock rose by 4.56% in pre-market trading, reflecting investor confidence in the company’s strategic initiatives and financial management. The stock’s performance contrasts with broader market trends, indicating a specific positive sentiment towards Sherwin-Williams.

Outlook & Guidance

The company reaffirmed its full-year sales and EPS guidance, anticipating continued market volatility. Sherwin-Williams remains focused on cost control and flexibility to navigate potential tariff impacts and rising raw material costs. With analyst price targets ranging from $247 to $420 and an overall Financial Health score of "GOOD" according to InvestingPro metrics, the company appears well-positioned despite current market challenges.

Executive Commentary

CEO Heidi Petz emphasized the company’s commitment to expanding its competitive moat, while SVP of Investor Relations Jim Jay highlighted Sherwin-Williams as a source of stability and reliability. CFO Al Moustician provided insights on the housing market’s resilience, despite current challenges.

Risks and Challenges

• Potential tariff impacts could affect cost structures.
• Rising raw material costs pose a risk to margins.
• The residential repaint market remains flat to declining.
• Weak commercial construction and CapEx spending could limit growth.
• DIY segment continues to face pressure.

Q&A

During the earnings call, analysts inquired about the company’s pricing strategies in response to tariffs and the challenges in the residential market. Discussions also covered labor availability and the outlook for the DIY and commercial markets, providing insights into Sherwin-Williams’ strategic responses to these issues.

Full transcript - Sherwin-Williams Co (SHW) Q1 2025:

Conference Moderator: Good morning. Thank you for joining the Sherwin Williams Company’s review of first quarter twenty twenty five results and our outlook for the second quarter and full year of 2025. With us on today’s call are Heidi Petz, chair, president and CEO Al Moustician, chief financial officer Paul Lang, chief accounting officer and Jim Jay, senior vice president, investor relations and communications. This conference call is being webcast simultaneously in listen only mode by Issuer Direct via the Internet at www.sherwin.com. An archived replay of this webcast will be available at www.sherwin.com beginning approximately two hours after this conference call concludes.

This conference call will include certain forward looking statements as defined under The US federal securities laws with respect to sales, earnings and other matters. Any forward looking statement speaks only as of the date of which the such statement is made, and the company undertakes no obligation to update or revise any forward looking statement whether as a result of new information, future events, or otherwise. A full declaration regarding forward looking statements is provided in the company’s earnings release transmitted earlier this morning. After the company’s prepared remarks, we will open the session to questions. I will now turn the call over to Jim Jay.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thank you, and good morning to everyone. Sherwin Williams continued to execute our strategy and delivered solid first quarter results, with the demand environment remaining challenging as we expected. On a year over year basis, consolidated sales were within our guided range, with growth in Paint Stores Group offset by softness in our other two segments. Gross margin and gross profit dollars expanded. SG and A decreased due to continued good spending control.

EBITDA margin in dollars expanded and adjusted earnings per share grew by 3.7% to $2.25 a share. We also continue to execute our disciplined capital allocation strategy, investing $352,000,000 in share repurchases and increasing our dividend by 10%. Let me now turn it over to Heidi, who will provide some additional color on the first quarter before moving on to our outlook and your questions.

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Thank you, Jim, and good morning to everyone. I want to begin by thanking our 64,000 global employees for their sheer determination and willingness to solve challenges as we navigate a wide variety of near term pressures. We’re staying true to our strategy, which is continuing to deliver innovative solutions for our customers, which makes them more productive and profitable. We expected and prepared for a bumpy 2025, and we are executing our playbook as planned. Looking at our specific results in the quarter, I’ll begin with the paint stores group.

Sales grew by a low single digit percentage, with price mix up by mid single digits and volume down low single digits. The price mix component includes our January 2025 price increase, which is ramping up as expected along with the residual impact of our February 2024 increase. We would expect the contribution of price to be lower going forward as we have now annualized the February 2024 increase. Protective and marine grew fastest in the quarter and increased by a high single digit percentage, driven by oil and gas, water and wastewater, high performance flooring and high value infrastructure projects. In residential repaint, sales increased by a mid single digit percentage despite continued softness in existing home sales as our prior growth investments continue to deliver a return.

New residential increased by a low single digit percentage as we continue to secure incremental relationships with new customers. Commercial and property maintenance sales remained under pressure as expected, given weak commercial construction completions and delayed CapEx spending. We expanded segment margin by 120 basis points, 18.4%, while continuing to invest in growth by opening 18 new stores in the quarter. Consumer Brands Group sales were within our expected range. More than half of the decrease was due to unfavorable FX, with the remainder driven mainly by soft DIY demand in North America.

Despite the lower sales, adjusted segment margin expanded to 21.3%. The improvement in adjusted segment margin was due to supply chain efficiencies and continued discipline in controlling general and administrative expenses, while maintaining investments to support our customers’ growth. I also want to reiterate how excited we are about the Souvenil acquisition we announced during the quarter. We expect this transaction to close in the second half of this year. Souvenil is a market leader with multiple profitable growth opportunities and is run by an outstanding management team.

I’m confident it will be a great addition to the Consumer Brands Group and an excellent complement to our existing Latin America business. Performance Coatings Group sales were below our expectations. FX, price mix, and volume all decreased by low single digit percentages, but were partially offset by a low single digit contribution from acquisitions. Regionally, Europe and North America decreased by mid single digit percentages. Asia and Latin America decreased by low single digit percentages.

From a division perspective, Packaging was a bright spot in the quarter with high single digit growth driven by new accounts and the recapture of temporarily lost share. Coil sales were down, but recovered meaningfully in March after a slow start, and we still project full year growth for this business. Industrial wood sales were down against a strong prior year comparison that included an acquisition. General industrial, our largest division, remained under pressure as expected, with softness in heavy equipment demand. Auto Refinish also remained under pressure, although negative FX accounted for almost half of the decline we saw in the quarter.

We are encouraged by meaningful new account wins in this business, which are currently being more than offset by softness in core accounts driven by lower insurance claims. SG and A expense in this segment decreased by a low single digit percentage due to good cost control. Adjusted segment margin decreased 60 basis points, 16.5% due to lower sales. And before moving on to our outlook, I would also like to note the good work being done in our administrative function to control costs, where SG and A was down a mid teens percentage in the quarter, partially offset by higher non operating costs. Our continued focus on simplification and digitization should continue to drive further efficiencies over time.

During our last two conference calls, we communicated that we expected demand in most of our end markets to remain choppy at least through the first half of twenty twenty five, with some not likely to gain momentum until 2026. We are seeing this play out with some additional uncertainty in the market related to tariffs. We also communicated that we are well positioned to outperform the market and that we are highly confident in the clarity of our strategy and, importantly, our team’s deep experience and ability to out execute in this environment. With regard to tariffs, I’ll remind you that approximately 80 of our consolidated revenue is in The United States, with less than 2% in China. In addition, the vast majority of our raw materials are sourced in the region where we are manufacturing.

Whenever there is disruption, there is significant opportunity to demonstrate what makes Sherwin Williams so unique. We are determined to expand our competitive moat in the current environment. Moving on to our specific outlook, the slide deck issued with this morning’s press release includes our expectations for consolidated and segment sales for the second quarter of twenty twenty five. Additionally, we are reaffirming the full year sales and earnings per share guidance we provided in January. The other data points we provided at that time also remain unchanged.

As is typical, we’ll be able to provide an updated full year outlook in July when we have a better view of how the paint and coating season is unfolding, along with potentially greater clarity on the trajectory of the global economy overall. We know there’s a lot of uncertainty in the market right now. What is certain is our strategy, our resolve, and our ability to assess, adapt, and pivot regardless of the obstacles in front of us through the pandemic, an industry wide supply chain crisis, and record inflation to name just a few. We’ve demonstrated our ability to deliver in up cycles, down cycles, and now a choppy cycle. We have a strong track record of delivery for our customers and ultimately for our shareholders.

We continue to operate with confidence, accountability, and our success by design mindset. We are aligned on aggressively pursuing above market growth, making targeted investments that deliver a clear return, controlling general and administrative spending, and executing on our enterprise priorities. And above all, we are focused on being the source of stability, predictability and reliability for our customers, providing them with solutions that increase their productivity and profitability. This concludes our prepared remarks. With that, I’d like to thank you for joining us this morning, and we’ll be happy to take your questions.

Conference Moderator: Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you’re listening on speakerphone to provide optimum sound quality. We do request that each participant please only ask one question.

Your first question is coming from John McNulty from BMO. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Yeah. Good morning. Thanks for taking my question. A question on on the pricing environment and tariffs. It sounds like you have relatively low exposure from a tariff perspective.

If you do start to see raw materials inching up at all in small parts of your basket, do you feel like you have an ability to put that pricing through? And I know normally, you don’t tend to raise price during the kinda heart of the paint season. But if if tariffs warrant that, is that something that you would consider, as we look through 2025? Thanks. Hey, John.

Good morning. This is Jim. Let me let me take a run at that first and maybe talk about raws in general and then turn to Al to answer some of the additional parts of your your question. So if we look at our first quarter of twenty five, raws were flat year over year. With the tariffs starting to come into place, our second quarter guide for raws is gonna be a little bit higher than we initially thought as those tariffs start to go into effect this past month here.

For ’25, we’re still in the range as you saw on our slide deck where our raws are gonna be up a low single digit percentage. But I would say, more likely at the higher end of that low single digits. And, you know, the tariffs, to your point, most of our raw materials are in the region that we’re manufacturing, but we are seeing some impact mainly on on areas like applicators, a little bit on pigment and extenders, a little bit on industrial resins is where we’re seeing it, a little bit on packaging as well. So those are the areas, but overall, the materiality of it is is something that we can manage. I’ll I’ll ask Al maybe to add a little color to that as well.

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yeah, John. This is Al. You know, we we’re looking at the tariffs like we look at other, cost basket increases. We we try to push back, as much as we can. We look for offsets.

And then if if we believe the tariffs are lasting, we will go out and have to had the discipline in the past to go out with additional price increases. To your point, it would not be ideal to go out in the summer, but if you go back a couple years when we’re seeing hyperinflation in 2020, ’20 ’20 ’1, ’20 ’20 ’2, we we did go out during the summer. But, again, you know, we have additional levers. We’re not sitting idle. We have additional levers to pull to help offset tariffs and other increases in costs and the continued choppiness in demand.

And Heidi mentioned it, simplification and digitization in her opening remarks. We’ve been open about we’ve invested heavily in modernizing our systems and expanding our digital capabilities, and you’re starting to see the returns on that in our first quarter. You look at our admin segment, SG and A was down mid teens. That’s not an allocation to the other segments. That is us getting the efficiencies out of the investments in systems.

We also took a you saw we took a small charge, onetime charge in our first quarter. So we’ve continued to look for opportunities to right size our footprint, whether that’s on the manufacturing side or in our SG and A. And you’ll see that continue through our second quarter as we continue to look for opportunities to improve our efficiencies that will help our second half. The last thing I would comment on other levers, you you look at our travel and entertainment, we’ve been very tight on that. Our third party investments or consultants, we’ve been very tight on that, and that’s from work done over the last year.

And then we’ll continue to look at cash conservation. We’re taking a hard look at our CapEx to get cash out of that as the year progresses without impacting Statesville manufacturing or our warehouse automation. And then finally, we’re taking a hard look at our our working capital inventory AP and and driving cash out of that so we can reinvest back in our stock.

Conference Moderator: Thank you. Your next question is coming from Mike Sison from Wells Fargo. Your line is live.

Mike Sison, Analyst, Wells Fargo: Hey, good morning. Great start to the year. I had a follow-up question on price mix for the stores, up mid single digits. Was that mostly price? Or if maybe half half with mix, what is that mix component to the to that equation?

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yeah, Mike. It was predominantly price, and I give the stores team a lot of credit. They really did a great job coming into this price increase, giving our customers enough lead time before the increase was implemented. They did additional training in the field, which provided a strong and better effectiveness this year versus last year. If you recall, we talked last year about, we were up half a percent, which was split evenly between price and volume.

So we got off to a little bit slower start on price effectiveness last year, and it ramped up as we got through the second quarter and into our third quarter. And, again, I think they did a really nice job of making sure the price went in and it was effective. The mix side of that is, as res repaint, is growing at a mid single digit, percentage, which is absolutely taking market share in a down market, that has a positive mix shift relative to the other segments like commercial and property maintenance. So that would be the mix side of it, but it was predominantly priced.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thank you, Mike.

Conference Moderator: Thank you. Your next question is coming from Vincent Andrews from Morgan Stanley. Your line is live. Thank you. Could you talk a

Vincent Andrews/David Begleiter, Analysts, Morgan Stanley/Deutsche Bank: little bit more about COGS and gross margins just because you had volume down across the three segments? You said raws were flat, but the cost performance kind of looks better than that with no diseconomies from the volume and no benefit from raws and the margins were up. So is there anything else in there that we should be thinking about? And likewise, on SG and A, it was down in the first quarter, but you’re still projecting it up low single digits for the full year. You flexing that a little bit in the first quarter just given the volume challenges?

And maybe that has to be made up later in the year. What was the cadence of that going to look like?

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yes, Vincent. On the gross margin, the selling price increased certainly in Paint Stores Group had an effect a a predominant effect on that. And as Paint Stores Group grows faster than the other segments, it does lift our gross margin. And then we also had supply chain efficiencies in the quarter. I think the team, through the continuous improvement, work they’re doing, the simplification work they’re doing is really finding their stride, you will, that as we we get increased volume, they’re able to drive efficiencies through our operations.

So those would be the three main drivers there. On SG and A, I think, you know, we didn’t flex. I wouldn’t say we flexed our SG and A down, specifically in the in the first quarter. I think when we go back to July of last year and look when we were looking at the first half of twenty five and and the full year ’25, we, you know, we understood that we’d be under continued pressure from a demand environment. So we proactively attacked SG and A on all all fronts across all segments and and and including admin, and you’re seeing the results of that.

That being said, we’re continue we’re gonna continue to add 80 to a hundred stores. We’re gonna continue to add the reps associated with that and strategic investments across the other segments that over the course of the year, you’re gonna see some of that pick up. We’ll give you a better view of the second half in July when we have a better view of the demand environment. And as we typically have done, if we believe demand is gonna be stronger or our gross margin is gonna be stronger, you can guarantee that we’ll flex our selling customer facing investments in the second half accordingly as we have typically done in the past. But again, we’ll give you an update on that in July.

Thank you, Vincent.

Conference Moderator: Thank you. Your next question is coming from Ghansham Panjabi from Baird. Your line is live.

Ghansham Panjabi, Analyst, Baird: Hi. Good morning. How do you expect the new residential end market to play out for you as the year unfolds? Context of many of the major homebuilders lowering their expectations versus a few months back, but I think you also mentioned incremental share gains and so on. So just curious how that nets out for you.

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Morning, Ghansham. This is Heidi. I think you said it well. The long term is absolutely solid. I think we continue to, you know, not only have a strong position, but gain position in in these challenging times within this segment that’s been working in different ways to strengthen partnerships with some of these customers that are also not only solving for affordability, but but really looking to simplify, you know, their their product offering, etcetera.

So the depth of the partnership, I think, has never been in a in a better place. Our focus on incremental partnerships obviously continues to be where we’re looking. But at the end of the day, we are all watching the same things here, the thirty year mortgage rate, you know, still staying in that six and a half to 7% range. And so while builders continue to offer incentives and solve for affordability, I think we’re we’re in a position here where we’re gonna continue to partner in new ways with them so that when the market does recover, they’re in the best position to grow and grow in a good cost position.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thanks, Ghansham.

Conference Moderator: Thank you. Your next question is coming from Patrick Cunningham from Citi. Your line is live.

Patrick Cunningham, Analyst, Citi: Hi, good morning. Just on the continued strength in res repaint, can you comment on underlying market trends, backlogs And any concerns with pressure on the consumer and maybe the thing that people aren’t talking about as much immigration policy?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Yes. The res repaint segment continues to be bright spot for us here as well. Obviously, the market you categorized, I think, very appropriately, which is flat and and certainly choppy. And this is a a really good example, you know, and Al mentioned earlier, where we’re disciplined in laying in the SG and A. You know, we continue to lay that in, you know, ahead of the curve as we like to say so that we were in the best position to capture shares we are right now.

I would say the backlog, overall, the sentiment is positive relative to activity with the caveat that these tend to be a bit smaller in project size, but still the activity is strong and growing. Overall, this is an area where as we continue to to try to work hard to to bring these contractors in, finding new ways to partner with the the the contractors that are coming in new to ResRepaint, making sure that our teams are trained, prepared, understanding how to leverage the data that we own, how they’re trained and prepared to to put the right products in the hands of these contractors to help them get on and off of job sites faster so that they can be as productive as as possible. And your point on immigration and labor, you know, it it’s not new for us that we’re continuing to focus on our value proposition here, which is simply to help these crews get on and off of job sites faster. So helping to solve for productivity is at the core of of what we’re trying to do with with this segment and all segments. But this this is a good example.

There’s a lot of growth opportunity for us here. It’s a it’s a it’s a growing segment, and we’re we have a lot of market share upside to be gained here.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thank you, Patrick.

Conference Moderator: Thank you. Your next question is coming from Duffy Fischer from Goldman Sachs. Your line is live.

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yes. Good morning. Just trying to understand a little bit better the interplay between the pricing, cadence this year and and the cost cadence. So normally, I think you guys would talk about getting more of an announced price increase in q two of the year it’s announced. Sounds like you got more than normal in q one.

Does that mean that there’s still pricing going higher sequentially? And is that pricing high enough to in or to offset or, you know, even do better than the cost that’s gonna increase sequentially? Yeah. Duffy, I would say that there’s still more room to run on the price increase effectiveness. That being said, I think we got out ahead of it a little bit more in this go round than we did a year ago.

I you know, if it’s enough, it depends on, I guess, how well we can offset the different impacts on the tariffs and how long we expect those to continue. And that will and as we typically do and look at our total cost basket, you know, we we’ll look at, as much as we can offset it. If we we don’t think we can, offset a % of it, then we will have to look out for another price increase. But I I think, you know, to be determined is the answer to that because it’s still volatile. The tariff today may not be the tariff a week from today, and, you know, we don’t wanna get that too far ahead of ourselves either.

That being said, I mean, outside of paint stores, there’s other price increases going in in the different segments, to help offset that total cost basket that we talked about in January. Thank you, Duffy.

Conference Moderator: Thank you. Your next question is coming from John Roberts from Mizuho. Your line is live.

Steve Byrne/John Roberts, Analysts, Bank of America/Mizuho: Yes. Thank you. Could you talk about the high single digit growth in Protective and Marine? PPG kept that part of their North American architectural business. So is there some disruption going on that’s allowing you to take some share there?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Absolutely. You know, there there are a few things that we mentioned this early in in our prepared remarks, that high single digit. I’m I’m very pleased with the team’s execution here in a in a choppy environment. So, you know, oil and gas, water, wastewater, we obviously talk about our high performance floor covering where we’ve got an industry leading portfolio as a result of some some acquisitions there. So, yes, I do think that we are gaining strength and gaining momentum in this business and plan to continue to be very aggressive here.

John, I’d also tell you that there there’s a good pipeline of projects here. The timing is often hard to predict from local projects with a simple solution that, you know, we’re looking more for speed of service all the way up to larger mega projects where we can really put forward a simpler, faster, and and safer solution that no one else can do at scale, I think, puts us in a really unique position to continue to to leverage the momentum that’s behind us. And, again, great great work by the team head down, and and focus on taking share.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thank you, John.

Conference Moderator: Thank you. Your next question is coming from Christopher Parkinson from Wolfe Research. Your line is live.

Christopher Parkinson/Emily Fusco, Analysts, Wolfe Research/Deutsche Bank: Great. Thank you so much. Can we take a step back and just look at PCG just given everything that’s going on in the world? And just perhaps just a quick comment or two on, you know, would Refinish P and M, just, you know, where you think the opportunities are intermediate to long term and, you know, what perhaps you’re watching just given the macro volatility? Thank you so much.

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Yeah. Chris, I I mentioned PNM briefly a moment ago, but I’ll refinish. And I’ll just remind you, half of that is, you know, FX related. So the team has been laser focused on on new accounts, installations, share wallet. Obviously, not enough today to cover up for some of the core business, but, you know, the no one no one is immune from what’s happening relative to some of the claims.

But the determination of the team, I think, is on display here, and and I would and I would expect and you should expect to continue to see that play out. If I go around general industrial, we’ve mentioned that certainly a business that’s been under pressure. We expect that to continue to be under pressure. You know, heavy equipment, transportation demand continues to be soft. The team is out every day demonstrating the the value proposition that we bring to to these customers.

Coil, Al mentioned earlier, and packaging, certainly a lot of momentum relative to the continued focus on for coil, new business. Winds have been very positive and offsetting a flat core, flat market. And we’ll continue to see, as we’ve gone through the quarter with some some momentum in March, we expect full year growth ahead there. Packaging, hit on, and I think the the fact that we’re not only, you know, gaining and and winning here, but making sure that some of the temporary share that we that we lost for a bit is coming back into Sherwin Williams has been a fantastic pickup. And then industrial wood, we we often talk about, as you know, this correlates pretty closely to our US new residential kind of segment.

So while that data continues to be choppy, seems that really focused again on new accounts, getting in front of more customers and and share of wallets, we can continue to to focus on offsetting some of the softness in that core. But by and large, I think if you look in aggregate, there’s some really good things happening in the portfolio. And, again, I give the team a lot of credit. You know, we knew what we were coming into in this year. And while the core health is not you know, the core markets aren’t where we want them to be, the team’s done a really nice job, you know, focusing on new wins to offset that that that shrink.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thank you, Chris.

Conference Moderator: Thank you. Your next question is coming from Aleksey Yefremov from KeyBanc. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams0: Thanks. Good morning. I wanted to come back to the consumer question. It was in PSG. I mean, your repaint performance has has been very solid and steady.

But are you hearing like how are consumers reacting to current uncertainty? What’s happening underneath with the market itself? Any comments there?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Well, I’ll start and hand it over to to Al here. You know, there there’s certainly still a pretty flat market. I think, generally, by and large, you know, this obviously ties a lot to existing home sales. People are still interested and willing to spruce up their homes with a project that’s, you know, more affordable, more attainable. So so paint itself tends to be still in a very strong position.

I think the underlying market continues to be choppy, but some of the the work that we’ve done not only to secure our position and the you know, outpacing the market to your point, in addition to all the things I mentioned before relative to our controlled model, the data that we own, we can be very smart and surgical in terms of how we’re, you know, engaging these customers, meeting them where they’re at, helping them, you know, think about how they’re going to continue to grow their business, whether it’s, you know, leveraging innovations that we’re bringing to them. You know, while they’re in in the home painting walls, we’ve launched our gallery series. I’ll remind you, which was a factory finish on cabinets, trim, and millwork. We’ve since because that has taken off so well, we’ve since gone back and brought more of a a total system for these contractors when they’re in, you know, someone’s home that they can do everything, the total system from primers all the way to top coat so that they can be as productive as possible. So it’s how we’re approaching a flat market, making sure that our team and these contractors have the right tools to be as productive as possible.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Yeah. This is Jim. Just to add maybe a little bit on the industrial side as well. I think, you know, Heidi said it well in prepared remarks. We’re seeing a little bit of that consumer behavior in the auto refinish piece where, you know, people are perhaps delaying a repair on their vehicle.

We we’re absolutely going after new accounts, market share to offset that. But right now, the consumer’s a little bit, you know, wait and see a bit there. But overall, I think, you know, you’ve got other pressures as well around credit card debt, things like that. So the consumer is still, you know, a little bit of a challenging place, but our our model and the value prop that we bring is is allowing us to have, in some cases, record new account activity in some of our business.

Heidi Petz, Chair, President and CEO, Sherwin-Williams: And one other piece here too. This is an area where the the scale that we have in some of our segments really allows us to offset some of that underlying softness or consumer hesitation. So I think res repaint is a great example of of that as well.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thanks, Alexey.

Conference Moderator: Thank you. Your next question is coming from Arun Viswanathan from RBC Capital Markets. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams1: Great. Thanks for taking my question. Yeah. Congrats on the progress in Q1. Good quarter in a challenging environment.

So I guess, just curious on on that. You know, how did March shape up? And how is how did April shape up as well? As I know there was a little bit, colder weather in January and February, which maybe led to weaker than expected results. So so was March actually quite strong, And did that carry into April?

And that kinda gives you the confidence to reiterate the full year in the face of all this volatility. Maybe just comment on some kinda near term trends what you’re seeing. Thanks.

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yeah. Arun, I I’ll I’ll I’ll start with April and work my way back. I I think April is started where we expected it to start and within our our guide for for two q. You know, March got better, but when March was better than January, February. But when I look at the first quarter and, you know, we had comments last year about weather.

I mean, the reality is Southeast Division, Southwest Division is our two largest divisions. And if there was going to be a weather impact on a small quarter like our first quarter, it’d be those two divisions that would be laggards in the quarter. And I would say when you look at their performance, they were at or above the overall paint stores group performance. So I don’t to suggest that weather had any impact on our first quarter nor do I think it has an impact on our second quarter. Thanks, Arun.

Conference Moderator: Thank you. Your next question is coming from Jeff Zekauskas from JPMorgan. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams2: Thanks very much. I think mortgage rates are now something like $6.08, and builders get a lot of their metal fittings from China. Lumber prices are higher. Do you have a general assessment of the inflation of building costs and whether that will make a difference. You know, are higher mortgage rates making a a difference to the building market?

And then maybe to ask Arun’s question in a in a different way. Was April up or down low single digits in sales? Which one?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: So, Jeff, why don’t I start just from a a homebuilder standpoint relative to the sentiment for both tariffs and rates? I think, obviously, the the biggest catalyst will be any movement in rates by and large is held to be true for everybody. But relative to tariffs, the the largest concern that we’re hearing from our customers is are are things related to steel and aluminum. So if you think HVAC systems, garage doors, window frames, those are those are the areas that where they’re most concerned. But then it goes back to Al’s point and Jim’s point earlier how, I think, by and large, everyone’s looking at at input cost in total and where where we can help offset, you know, simplification comes in to solve for affordability.

So those would be the biggest areas of concerns through the homebuilder’s perspective.

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yeah. Jeff, you you know we’re not gonna give you an up or down for April. Just, you know, historically, we’ve not done that. We we’re pleased with how April start has started within our expectations and within our guide for the second quarter. On the higher mortgage rates, you know, what we had talked about on our first quarter or our January call also is that, you know, life goes on.

People are continuing getting married. I saw household formations were over one and a 1,250,000, recently. People are having children. So they’re looking at other options for, better affordability. It might be a smaller home.

It might be a smaller lot. It might be in a a different, school district than than they want it. But, you know, I think what, you know, as the mortgage rates continue to stay at a higher level and existing homes inventory doesn’t grow, the next logical place is to go see if we can, you know, build a new home or or fit into a home that’s already built and just waiting to be sold. So I I think there’s, those types of things going on every day. We keep talking about that.

Ideally, we see interest rates get we don’t I don’t think we need to get them back to $5.05 and a half. We saw a lot of movement when they got closer to six to six and a half because that pent up demand is is so strong. So I don’t think people are gonna just wait until mortgage rates drop to 5%. Thank you, Jeff.

Conference Moderator: Thank you. Your next question is coming from Greg Melich from Evercore. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams3: Hi. Thanks. I wanted to dig a little deeper on the gross margin expansion. So I guess on the first quarter, over 100 basis points, but but raws were still tame. And now if they’re gonna rise a little bit more and we get less benefit from price going forward, should we expect the first quarter to have been the biggest expansion in gross margin?

Or are there other things at work that could help us through the year?

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yes. There’s other other things, Greg, that that can, and will help us through the year as we talk about simplification and some of the other self help levers that that were have pulled or are looking to pull on our on our second quarter. Part of what, see on a year over year change, and I talked about this in January, we’re expecting to see a similar type of margin improvement in our second half as we saw in our first half. I think you’re seeing a little bit more of an improvement year over year in our first quarter just because last year, our first quarter was our smallest gross margin performance, and then it improved as the year went on. So yes, you’re probably going to see our first quarter being the largest improvement, but part of that’s history.

Part of that is and we’ll talk about our second quarter. I know we didn’t give a sales breakout, but expecting price to be similar in our second quarter on a consolidated basis as it was in our first quarter because of additional price increases across the other two segments that’ll help. Yes, paint stores will not have as big of a tailwind in the second quarter as the first quarter, but there’s also other price going in across the other

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: segments. Thank you, Greg.

Conference Moderator: Thank you. Your next question is coming from Steve Byrne from Bank of America. Your line is live.

Steve Byrne/John Roberts, Analysts, Bank of America/Mizuho: Yes. Thank you. If we just look at the last month in your resi repaint volumes, what would you estimate when the the paint contractors actually locked in that those projects into their backlog, how long ago would that have been? And can you comment on whether your resi repaint volumes in the quarter were up year over year? And what was the spread in your estimate versus the underlying market?

What kind of a delta is that you’re gaining share in the resi repaint?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Yeah. Steve, the typically, the backlog, the sight line for res repaint would be between the four to six week range. And so I think that would be pretty consistent in terms of, you know, when when they’re planning, when we’re we’ve got sight line with them. In terms of the year over year dynamic, Al, I’ll let you comment on that and jump back in if I need to.

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yeah. I think, based on our mid mid single digit performance on res repaint, we our our volumes were up, and you look at it in a, you know, a flat to down ish market, you know, we’re we’re absolutely taking a taking share in that low single digit percentage. And it’s really, you know, Steve, the continued focus on making the right investments within our paint stores group, predominantly in res repaint both on stores and reps and and, you know, driving that volume in a down market. We’ll I I I continue to expect to

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: see that as we go through the year. Thank you, Steve.

Conference Moderator: Thank you. Your next question is coming from Chuck Cerankosky from Northcoast Research. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Good morning, everyone. Looking at the 18 store openings, the paint stores group had in the first quarter. That seems like a pretty good start to the year. What are you looking at for total openings this year? Where are they being built if there’s any concentration and any staffing challenges as the stores open?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Yeah, Chuck. So 18 in the quarter, and we’ll continue to be very focused on 80 to a hundred throughout the year for the total annual number. In terms of kind of location, obviously, we won’t get into where we’re putting laying those stores in, but the way that we approach that, and I know you’re well aware of this too, the algorithm that that we really use to understand not just where density is, but where density will be to make sure that we are, you know, intercepting the market at the right time to to support our contractors as they’re looking to do the exact same. So it’s it’s very much based on where the the volume and the density is and is is going, you know, certainly across the country. In terms of staffing, I would tell you our our turnover continues to be to our kind of our record low seven to 9% in stores.

We’re really proud of how we hire, onboard, and retain and engage talent. A lot of focus and effort there from the the paint stores organization led by Justin Bins to make sure that we’re doing just that. We don’t have an an outlying problem candidly relative to making sure we get the right people, get the right resources focused on making sure we get the right type of talent in. And once we have them in, I I point back to the the low turnover as an indicator that not only do we have the right people, but we’re progressing the right talent throughout throughout the organization.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thank you, Chuck.

Conference Moderator: Thank you. Your next question is coming from Kevin McCarthy from Vertical Research Partners. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams4: Yes. Thank you, and good morning. Heidi, one of the things that changed relative to last quarter is you announced in February an agreement to acquire BASF’s architectural business in Brazil. So in that context, I was wondering if you could talk a little bit about what appealed to you there and your strategic ambitions in LatAm. And related to that, a couple of clarifications.

When when do you think that deal would close within the second half? And are you now including that in your guidance on slide seven, or is that excluded?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Yeah. This this souvenir has been an asset that we’ve been looking at for quite some time, Kevin. And you can imagine, you know, the interest in appeal when this becomes available was was pretty significant for a number of reasons. And I would start with, you know, we’ve got a a strong business already in Latin America with a fantastic team from Sherwin Williams. And so this became an obvious complement not only to the talent and the team, the brand, having a leading brand in Latin America clearly is a signal of of high interest when we can be, you know, market market leaders in a key market that’s of high interest to us.

And so it’s a combination of not only the the brand and the assets that come along with it, but fantastic leadership team. In terms of the the timing of close, can’t can’t give you any more than we’re we’re targeting second half, which we’re we’re feeling very positive about, and it is currently not in in the guidance as you see.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: And to add to that, Kevin, just thinking about the Brazil market for architectural as well. It’s a large and growing market. The GDP, we’ve talked about Brazil GDP growing maybe around 1% over the last several years. Architectural coatings have been growing faster than that, and souvenir has been growing even faster than that. So we fully expect to to continue accelerate that growth.

And as Heidi mentioned, it’s a great complement to to what we’re doing right now. Very little conflict in terms of channels or brands or anything like that fits very well together. And thanks for the question, Kevin.

Conference Moderator: Thank you. Your next question is coming from Josh Spector from UBS. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams5: Yeah. Hi. Good morning. I wanted to ask about the time line for share gains on commercial and the property maintenance side. You guys have been clear for a while that you’re gaining share, but the flow through there would be delayed.

Is is that something you’d see in the second half of this year resulting in outperformance versus market, or is that even longer term than that that we should be thinking about?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Josh, you’ll see some, but it is longer term. And and I’ll I’ll point back to obviously, there’s a I would call this an unprecedented competitive landscape today. And so the the two segments that you spoke to typically tend to be larger, multiyear, in some cases, projects. And so the timing of these will certainly reflect that. I would suspect that we’ll be talking about this for the next eighteen to twenty four months.

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yeah, Josh, the only thing I would add is, we we have often talked about, exclusive agreements, and we continue to monitor those and and make sure we’re we’re gaining share there. So even if the next commercial job started today, you know, we’re twelve to eighteen months out before we get to painting. And then the other on the property maintenance side, any share gains that that we’ve gotten are being masked by the corp being being backwards, especially with the higher interest rates that we have talked about and the lack of CapEx projects going, being completed.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thank you, Josh.

Conference Moderator: Thank you. Your next question is coming from Mike Harrison from Seaport Research Partners. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams6: Hi. Good morning. Wanted to dig in a little bit further on the Souvenir acquisition. I was wondering, Heidi, if you can give us any early sense of how you might be thinking about operational synergies or potential cross selling opportunities related to that acquisition, whether those would be in Brazil or maybe, more broadly in other parts of South America? And then also, are there any investments, that you, might anticipate could be required as part of the integration process for Souvenir?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: You know, great question. You know, there’s there’s a few things here that I think just to step back and point to other areas that Sherwin Williams has kind of done a nice job here. I’ll point to the Valspar acquisition. And when I tell you that we’re leveraging that playbook, that’s probably an understatement. So when you think about, you know, what it is and how we define value both on, you know, top line synergies, any operational opportunity, yes, you should expect that we’ll be very aggressive on both fronts.

Obviously, we won’t get into any of the details here, but I have a lot of confidence in our integration team and the combined leadership and their ability to make sure that we are laser focused on business continuity first and foremost and and through the lens of our customers and through the lens of employees. So we’ll we’ll be down that path here. The teams are already knee deep. In terms of investments, that’s it’s premature to comment on that. I think if anything, it’s more opportunity for us to find ways to be more efficient and better together at this point.

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yeah. Mike, the only thing I would add to that is you’ve seen us, have an appetite for investments in businesses that can grow above market and we can get a return on that. And I’ll point to packaging and the continued investments in capacity expansion. I’ll point to coil, our continued investments in capacity expansion where we’re confident in the growth, outlook, and we will absolutely get a return for those investments.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thank you, Mike.

Conference Moderator: Thank you. Your next question is coming from Garik Shmois from Loop. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams7: Oh, hi. Thank you. I’m wondering if you’re seeing anywhere that customers are taking on inventory ahead of the full tariff impacts. Meaning, are you seeing any pull forward of demand? Or conversely, is there any destocking to to think about where where customers are taking more conservative view on how much inventory they’re holding?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Not not really, Garrett. It there’s, you know, exceptions here or there by customer, by region. But by and large, I would tell you it’s not material, and it’s it’s not an active conversation that we’re having across the business units today.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thanks, Gerrick.

Conference Moderator: Thank you. Your next question is coming from Aaron Ciccarelli from Berenberg. Your line is live.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams8: Hello. Good morning, and thanks for the question. Good results. I have a question on PSG. You mentioned that the contribution from pricing in Q2 will be smaller and the comparable base becomes a bit tougher in Q2.

So just trying to understand where do you expect volume growth to come back? Is it an acceleration from protective and marine and residential repaint? Or are you thinking about, commercial or property maintenance or DIY starting to improve? Thank you.

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yeah. Erin, I I think it’s gonna be the volume improvement. We’ll continue to expect res repaint. We’ve got momentum in PNM, and we’d expect that that volume to improve. I I think the the the only comment I would have on commercial property maintenance is we don’t expect them to get worse.

So as we continue to to build on our our our wins in res repain, as we continue to build on PNM, They’ll help offset those volume declines more. And then also, you know, we we’ve talked about this in January. New res kinda just, plotting along, not getting worse, not getting tremendously better. And then, you know, we can see how that progresses through our second quarter, and that allow us to give you a better outlook for the full year on volumes.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thanks, Aaron.

Conference Moderator: Thank you. Your next question is coming from Mike Lighthead from Barclays. Your line is live.

Vincent Andrews/David Begleiter, Analysts, Morgan Stanley/Deutsche Bank: Great. Thanks. Good morning, team. On the outlook, I appreciate you don’t give quarterly earnings guidance, but you are guiding sales essentially flat at the midpoint year over year for the second quarter. So do you think you’ll be able to grow earnings in that top line environment?

Or are the cost inflation items likely to preclude earnings growth in the second quarter?

Al Moustician, Chief Financial Officer, Sherwin-Williams: Yeah. Know, Mike, you’re you’re right. We we don’t give quarterly guidance, but I will give you some a color. I do expect, you know, even with that flattish type of sales that our adjusted operating margin, and when I say adjusted operating margin, I’m talking about our gross profit less SG and A, expect that margin to improve year over year at the midpoint. The price increases helping offset the total cost basket increases that we’ve talked about, the simplification efforts, the digitization efficiencies that we’re seeing that are allowing us to maintain a tight SG and A number even while investing in stores and reps.

So those will all help. As I talked about on January though, we are going to have a significant headwind on non operating items due to the credits that we saw last year in both environmental, which I don’t expect to repeat, and the gain on sale of asset or disposition of assets. Those were roughly $60,000,000 that I just don’t expect to repeat and will be difficult to get on top of when you look at our our our profit margin and or our EPS. That being said, depending on where Paint Stores Group is in the range of their sales, we could be better from an earnings standpoint just because of their higher operating margin than the other segments. And, you know, we we may get some benefit on admin on the continued cost consciousness that we have there.

Thank you, Mike.

Conference Moderator: Thank you. Your next question is coming from Eric Bosshard from Cleveland Research. Your line is live.

Al Moustician, Chief Financial Officer, Sherwin-Williams: Thanks. Al, a point of clarification. You talked about, the potential impact of tariffs and the potential need for price. I’m just curious in and and also the reality that tariff policy may change, likely will change in the weeks ahead. As we sit here today, is the impact of tariffs on raws sufficient to push the raw outlook above the original range?

No. It’s not, Eric. And and that’s why when we we talked earlier about evaluating our price, we’re still within that raw material range and or the total cost basket range. And and I I think what I would just make a finer point on on the price discussion is some of our businesses, you have to get kinda granular on what where and how the tariffs are impacting what specific businesses and regions. And, you know, so I made a broad statement.

Hey. We likely will not have to or we’ll evaluate to see if we have to go out with additional price. Well, individual businesses may be out, and I I don’t wanna get into the specifics of those, but we may have some businesses that have to go out sooner than later because they’re more impacted by the raw material environment, the tariff environment, and those other costs that we talk about that roll into our total cost basket. Thank you, Eric.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams7: Thank you.

Conference Moderator: Thank you. Your next question is coming from Laurence Alexander from Jefferies. Your line is live.

Vincent Andrews/David Begleiter, Analysts, Morgan Stanley/Deutsche Bank: Good morning. Would you mind giving some detail around what you’re seeing in terms of labor availability, maybe by channel? And what that and what you know, is it getting easier to poach salespeople from competitors, and what does that imply for labor inflation this year?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Yeah. Nothing significant, Lawrence. I I would tell you that, you know, obviously, everyone’s looking at the same data. You know, we go back to my earlier comment. When we think about how we source, you know, labor, we put a lot of time and effort into our recruiting strategy and our our talent acquisition team.

We work really hard throughout the organization to make sure that we’ve got, you know, people that are placed in the in the right, you know, right roles at the right time, making sure that we’re progressing talent through. I don’t I don’t have a strong concern there in any regard. One of the biggest areas of focus for the company, and this is maybe a bit more of a a signal to our culture, is we talk a lot about this idea of we want we want our employees to understand that this we want them

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams5: to feel that this is

Heidi Petz, Chair, President and CEO, Sherwin-Williams: we are the employer of choice. We’ve got a program called Create Your Possible where we really work hard to make sure that across our 64,000 global employees, they’ve got better sight line to, you know, all that’s available and possible to them throughout the organization, not just within their geography or their business unit so that we’re really working hard to, you know, to move talent around the organization. So getting them in is a really key focus, but making sure that we’re engaging and retaining our talent is is at the forefront of everything we do. In fact, of our six enterprise priorities, that we’ve shared, the talent and culture is the is the ultimate enabler for us is is making sure we can get accomplished all the things it is that we wanna we wanna do.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Thank you, Lawrence.

Conference Moderator: Thank you. Your next question is coming from David Begleiter from Deutsche Bank. Your line is live.

Christopher Parkinson/Emily Fusco, Analysts, Wolfe Research/Deutsche Bank: Hi. This is Emily Fusco on for David Begleiter. On the North American DIY, is weakness getting worse given the pressure on the consumer? How do you see the rest of the year playing out?

Heidi Petz, Chair, President and CEO, Sherwin-Williams: Yeah. Emily, I wouldn’t say it’s getting worse that I I I would go back and point to relative to DIY as a segment. This is a really important part of our long term strategy. It represents well over thirty, thirty five percent of the available gallons. And so I wouldn’t say it’s getting better, but I do I would I would say it is still absolutely under under pressure and and bumping around a bit.

Our partnerships that we have, you know, outside of our stores with some of our strategic partners are are working fiercely on making sure that we can continue to, you know, stimulate demand and and get people painting their walls more. So any help you can provide, we’ll we’ll take it.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Yeah. Emily, I’ll just add to to close it off too. I mean, existing home sales, we’ve talked about it as a driver on that DIY side as well. So if we can see some uptick there, that would be helpful on the DIY demand. Thank you.

Conference Moderator: Thank you. That concludes our q and a session. I’ll now hand the conference back to Jim Jay for closing remarks. Please go ahead.

Jim Jay, Senior Vice President, Investor Relations and Communications, Sherwin-Williams: Yeah. Thank you, Matthew, and thanks everybody for joining our call. As we outlined today, we’re continuing to operate here in a very choppy macro environment. That’s gonna last, we we assume, for the rest of the year. It’s also an opportunity for Sherwin to demonstrate what makes us so unique.

And our differentiated solutions are driving productivity and profitability for our customers. We are focused on being the source for stability, predictability, and reliability. We’re focused on what we can control, which is what you heard today, and we’re gonna continue to assess and adapt and pivot in this environment so we can do what we need to do to outperform the market. As Al mentioned, we’ve got a lot of different levers that we can pull as the conditions evolve. So, we feel very good about where we’re positioned.

You know, we’re gonna continue to deliver shareholder value, take care of our customers, and, we’ll continue to execute at a high level. So thank you again for joining us. Eric Swanson and myself will be available for your follow-up calls as always, and thanks for your interest in Sherwin.

Conference Moderator: Thank you. Everyone, this concludes today’s event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

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