"We are pleased with the continued strong positive sales and earnings per share momentum," Chairman and Chief Executive Chris Connor said. "Our Paint Stores Group continues to lead with sales volume and operating results."
CLEVELAND, Ohio -- Cleveland paint company Sherwin-Williams Co. posted record sales of $3.01 billion and a 19.5-percent jump in profits per share for the second quarter of 2014, boosted by paint sales and acquisitions.
Profits rose 13 percent to $291.4 million for the quarter, from $257.2 million for the second quarter of 2013. The news sent share prices up to $211.22 before they closed at $210.95, up $9.22 from Wednesday's close of $201.73.
Paint store sales grew 17.2 percent to $1.88 billion for the quarter that ended June 30, and 16.9 percent to $3.24 billion for the first six months, driven by greater volumes of architectural paint across all market segments and acquisitions, the company said in a written statement.
Sales at stores open at least a year, a key metric called same-store sales, rose 9.8 percent for the quarter and 9.0 percent for the first half of the year.
Acquisitions contributed 6.5 percent to the quarter and 6.8 percent to the first half of the year.
For the quarter that ended June 30, net sales grew $329.1 million, or 12.1 percent, from the $2.71 billion the company reported for the same period last year. Diluted net income per common share rose to $2.94, from $2.46 for the second quarter of 2013.
For the first half of 2014, net sales increased $528.5 million, or 10.8 percent, to a record $5.41 billion. Diluted net income per common share increased to $4.06, up from $3.57 for the first two quarters of 2013.
Profits rose 9 percent to $406.9 million, up from $373.5 million last year.
"We are pleased with the continued strong positive sales and earnings per share momentum," Sherwin-Williams Chairman and Chief Executive Chris Connor said in a statement.
"Our Paint Stores Group continues to lead with sales volume and operating results. ... The Comex acquisition is performing better than expected in the year," he said, referring to the U.S. and Canadian retail stores acquired from Consorcio Comex S.A. de C.V. in Mexico.
On April 17, the company told analysts that it had moved on from plans to acquire the much larger Mexican division of Comex. "After 18 months of effort behind this acquisition, it is an understatement to say that we're disappointed with the conclusion," Connor told analysts at the time.
Then on June 30, PPG Industries, a Pittsburgh-based coatings and specialty materials company, announced that it was buying Comex after Sherwin-Williams walked away without a deal.
For the third quarter of 2014, Sherwin-Williams expects net sales to grow 9 percent to 14 percent over the same period last year, with diluted net income per common share of $3.15 to $3.25 per share.
For the full year, the company expects net sales to increase 8 percent to 13 percent, and has raised its forecast to $8.50 to $8.70 per share.
The Comex acquisition is expected to contribute $120 million to $130 million in net sales in the third quarter, and "increase net sales by a low single digit percentage" for the year.
"We are continuing to invest in our business," Connor said. Sherwin-Williams opened 33 net new stores in the first half and expects to open 80 to 90 new stores for 2014 as a whole.
"During the quarter we continued to buy shares of our stock and we increased the dividend rate to 55 cents from 50 cents last year. Our balance sheet remains flexible and is positioned well for future acquisitions and other investments in our business."