The Sherwin-Williams Company achieved its sixth consecutive quarter of organic sales growth, a rate that exceeded the industry average by 300 basis points. [claim:1]
The company successfully covered 90% of cost of goods sold inflation through proactive pricing actions, reaching a breakeven run rate one quarter earlier than previous commitments. [claim:2] Sherwin-Williams expects to reach 100% coverage of cost of goods sold inflation by Q4 2026 via continued global pricing adjustments. [claim:8] Cost of goods sold inflation is estimated to remain in the mid-single-digit to high-single-digit percentage range through the end of 2026. [claim:13]
Industrial and Aerospace performance
The Industrial Coatings segment has reached a growth inflection point, driven by multi-year share gains in packaging technologies and automotive OEM. [claim:3] This segment is projected to continue outperforming, with new business wins estimated at $25 million per quarter. [claim:10]
Aerospace performance is supported by a $300 million order backlog and diversified exposure across military and commercial end-uses. [claim:4] To support long-term demand, the company is investing over $0.5 billion in aerospace capacity, including the Shelby facility. [claim:11] While some business units perform below the aerospace average, the company is focusing on margin improvement rather than exits. [claim:24]
Automotive and Architectural segments
Performance in Automotive Refinish was impacted by U.S. customer destocking and challenging year-over-year comparisons, though management believes destocking has now concluded. [claim:6] The company expects Automotive Refinish to return to revenue and volume growth in the second half of 2026 as inventory normalizes and new MSO wins convert. [claim:9] In the U.S., automotive insurance premiums experienced their first quarterly year-over-year decline in five years. [claim:15]
In the Architectural Coatings EMEA segment, margins returned to expansion following several quarters of contraction. [claim:5] The company is executing a restructuring program in Architectural EMEA that includes scheduled plant closures in late 2026 and early 2027. [claim:14]
Management Outlook and Operations
Management attributed a 5% volume growth to share gains won over the last 1.5 to 2 years that are now impacting the P&L. [claim:17] They stated that customers are not trading down to value brands because they prioritize throughput and productivity. [claim:20] Furthermore, management stated they have seen virtually no lost business due to pricing efforts, describing the process as collaborative. [claim:21]
Regarding supply, the company maintained operational resilience and supply continuity despite rising logistics and raw material costs resulting from the Iran conflict. [claim:7] The speed of price realization improved by removing lag periods and applying learnings from previous cycles. [claim:22]
Capital allocation remains focused on share repurchases and organic investment, with $175 million in shares repurchased year-to-date. [claim:16] The company expects to continue outpacing the market, though potentially not at the 500 basis point level recorded this quarter. [claim:18]
The significant period of U.S. destocking is over, with volumes expected to be up in low single digits for the second half of 2026. [claim:19] Q3 guidance assumes organic sales growth in the low to mid-single-digit range, which is balanced by mixed consumer sentiment in Europe. [claim:12]