Sherwin-Williams Co. warned rising input costs could weigh on results later this year, after currency tailwinds helped it post stronger-than-expected sales growth in the first quarter.
While the paint maker maintained its full-year adjusted profit guidance, it now expects higher raw material costs, according to a Tuesday statement. Shares traded 2% lower as of 11:26 a.m. in New York.
“We would expect to see these inflating costs impacting us more materially as we move through the second quarter and into the second half of the year,” Chief Executive Officer Heidi Petz said on an earnings call, noting inflation is emerging first in its industrial business across the Asia and Europe, Middle East and Africa regions.
Sherwin also maintained a cautious demand outlook, with most end markets not expected to recover this year amid weak customer sentiment and geopolitical uncertainty. The company continues to plan price increases through the year across all businesses to offset pressure.
Growth in all three key divisions pushed group revenue up 6.8% in the first quarter, ahead of the 4.8% consensus. Currency tailwinds helped its performance coatings and consumer brands units, with the recent acquisition of Suvinil helping offset a drop in home projects, which affected the consumer brands group.
The Ohio-based company plans to provide updated guidance in the second quarter.
Written by: Ignacio Gonzalez @Bloomberg
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