(Reuters) -Sherwin-Williams on Tuesday raised its full-year earnings forecast and posted a second-quarter profit that beat estimates, as the paintmaker was helped by higher prices and increased sales across its paint stores and coating segments.
The firm now expects 2024 adjusted profit per share between $11.10 and $11.40. Analysts were expecting $11.37 per share, per LSEG data.
Shares of the company were up 5% in afternoon trade.
"Not only do we see momentum here in the back half (of the year), we look at that as some solid tailwind," said CEO Heidi Petz.
"Price realization improved as the quarter progressed. Segment margin increased to 25.1%, driven by higher sales in moderating raw material costs... new residential returned to growth in the quarter as we are seeing improving single-family start turned to completion."
U.S. home sale data for April shows sales rising, with supply being the highest in more than 16 years, boosting spend on residential repaint, driving profits for paintmakers higher. Additionally, with interest rates expected to go lower, the demand for homes would increase.
Industry peer PPG Industries (NYSE:PPG) reported a lower-than-expected quarterly revenue, yet also expects an overall improvement in the second half of the year.
Overall sales for Sherwin-Williams (NYSE:SHW) inched up to $6.27 billion for the quarter ended June 30, from $6.24 billion a year ago, but falling short of estimates of $6.33 billion, as per LSEG data.
However, CEO Petz flagged a continued weakness in the Consumer Brands Group sales, impacted by soft DIY-paint demand in the U.S. Net sales in the segment fell 10.7% from a year ago.
The company also reduced full-year forecasts for the segment, seeing it potentially down by a high-single to low-double digit percentage.
On an adjusted basis, the Ohio-based company reported a profit of $3.70 per share for the reported quarter, compared with estimates of $3.48 per share.