Sherwin-Williams Tumbles on Expenses From Deal With Lowe's
(Bloomberg) -- Sherwin-Williams Co. fell the most in two years after the paint maker cut its full-year forecast, citing higher costs from efforts to ramp up sales at Lowe’s Cos.
- Adjusted earnings in 2018 will be $19.05 to $19.20 a share, a reduction of 15 cents to the top end of previous guidance.
- Costs to become the exclusive U.S. supplier to Lowe’s retail stores for interior and exterior paints, a deal announced in February, reduced the quarter’s earnings by 16 cents a share.
- Sherwin-Williams also has been bitten by less than stellar U.S. housing data. Sales at North American stores open at least a year climbed 5.2 percent, down from 6.8 percent in the second quarter. Baird analyst Ghansham Panjabi had expected an 8 percent gain for the latest period.
- Raw-material costs rose at a slightly higher rate than expected, said KeyBanc Capital Markets analyst Michael J. Sison.
- The shares fell as much as 8.4 percent, the most intraday since Oct. 25, 2016, before trimming losses to trade down 5.6 percent as of 11:15 a.m. in New York.