The Cleveland, Ohio, based paints and coatings maker now expects third-quarter sales to be flat to “down slightly” compared with a year earlier. It offered third-quarter guidance of $1.80 to $1.90 a share.
In addition, the company lowered its full-year sales guidance to be up “by a high single digit percentage over full year 2020.” It said it now sees full-year 2021 diluted net income of $7.21 to $7.41 per share.
“The persistent and industry-wide raw material availability constraints and pricing inflation we have previously reported have worsened, and we do not expect to see improved supply or lower raw material pricing in our fourth quarter as anticipated,” said John G. Morikis, chairman and CEO in a statement. "Our suppliers are now reporting that the impacts of Hurricane Ida are more severe and will be longer lasting than initially thought,” he added.
"In addition to the significant supply challenges, raw material pricing remains highly elevated, and we are increasing our full-year raw material inflation outlook to be up a high-teens percentage compared to last year. We continue to combat these elevated costs with pricing actions across all of our businesses,” he said in the statement.
While the Federal Reserve has insisted that inflationary pressures resulting from its easy money policies are transitory, concerns are growing on Wall Street that inflation could become embedded in many people’s economic assumptions, leading to a self-fulfilling inflationary spiral.
Shares fell sharply on Wall Street Monday, as interest rates surged on inflation fears.
Sherwin-Williams shares fell $9.72, or 3.5%, to $269.90 in after-hours trading.