The Sherwin-Williams Company Q1 2026 Earnings Call Transcript

Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.

The Sherwin-Williams Company (NYSE: SHW) Q1 2026 Earnings Call dated Apr. 28, 2026

Presentation

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Good morning. Thank you for joining the Sherwin Williams company’s review of first quarter 2026 and our outlook for the second quarter and full of 2026. With us on today’s call are Heidi Petz, Chair, President and Chief Executive Officer Ben Meisenzahl, Chief Financial Officer Paul Lang, Chief Accounting Officer and Jim Jay, Senior Vice President, Investor Relations and Communications. This conference call is being webcast simultaneously in listen only mode by Access Newswire via the Internet@www.sherwin.com.

An archived replay of this webcast will be available at www.sherwin.com beginning approximately two hours after this conference call concludes. This conference call will include certain forward looking statements as defined under U.S. Federal securities laws with respect to sales, earnings and other matters. Any forward looking statements speaks only as of the date on which such statement is made and the Company undertakes no obligation to update or revise any forward looking statement, whether as a result of new information, future events or otherwise.

A full declaration regarding forward looking statements is provided in the Company’s earnings release transmitted earlier this morning. After the Company’s prepared remarks, we will open up this session to questions. I will now turn the call over to Jim Jay.

Operator

Thank you and good morning to everyone. Sherwin Williams delivered strong sales in a quarter characterized by heightened global uncertainty and persistent demand softness in most end markets. Our growth investments and ongoing new account and share of wallet initiatives continue to yield results as sales exceeded guidance on a consolidated basis and in all three reportable segments. Consolidated sales grew by a high single digit percentage inclusive of a low single digit contribution from the Souvenir acquisition.

Reported gross margin expanded by 90 basis points inclusive of a dilutive impact from Souvenir. This was the 14th quarter out of the last 15 quarters. We have delivered year over year gross margin expansion against a challenging prior year comparison. SGA increased by a mid single digit percentage excluding the anticipated headwinds from our non annualized acquisition of Souvenir, non annualized operating costs and depreciation related to our new buildings and foreign currency translation that we anticipated to unfavorably impact our SGA as a percent to sales by approximately 100 basis points.

Our full year guidance of a low single digit increase in SGA remains unchanged. Adjusted diluted net income per share in the quarter increased by a mid single digit percentage and adjusted EBITDA increased by a high single digit percentage. Net operating cash improved by $200 million driven by an increase in net income and working capital being a lower use of funds. Our full year guidance for adjusted diluted net income per share remains unchanged. We continue to execute our disciplined capital allocation strategy in the quarter by returning $773 million to shareholders through share buybacks and dividends.

We ended the first quarter with a strong balance sheet and a net debt to adjusted ebitda ratio of 2.5 times. Let me now turn it over to Heidi who will provide some color on first quarter segment performance before moving on to our outlook and your questions.

Heidi G. Petz — Chair, President and Chief Executive Officer

Thank you Jim and good morning to everyone. I want to begin by thanking our more than 64,000 employees for executing our strategy in what remains a very challenging operating environment. We are continuing to deliver reliability, consistency and solutions for our customers at a time when these are more valuable than ever. Our differentiation continues to widen the gap between Sherwin Williams and our competitors as evidenced by our strong top line and robust new account growth across the business.

Looking at our segment results in the first quarter, I’ll begin with Paint Stores group which grew by a mid single digit percentage. Price mix and volume both increased by low single digit percentages with price mix increasing more than volume. Effectiveness of our January 1st price increase is trending slightly better than expected. Our Protective and Marine team continued to deliver impressive growth for us as sales increased by double digits versus a high single digit comparison. It was the seventh straight quarter of high single digit growth in this business.

In the commercial business, sales increased by mid single digits in what remains a choppy market reflecting our very targeted and ongoing share gain efforts. These efforts are also evident in Residential repaint which returned to mid single digit growth in the quarter. Low single digit growth in property maintenance was encouraging while demand in new residential remained very challenging. As we anticipated, segment profit grew by low single digits with segment margin basically flat. We opened 21 new stores during the quarter and as planned closed 27 or about half a percent of total PSG stores.

As we have done for decades, we continually assess and optimize our store portfolio to drive profitability, strengthen operational flexibility, drive improvement in return on net assets employed and ensure we maintain the highest level of service for our customers. We still expect to open 80 to 100 new stores for the year. Consumer brand sales exceeded our expectations driven by high teens growth from the Souvenir acquisition Price mix and FX both increased in the low single digit range and volume decreased in the mid single digit range.

Group sales excluding Souvenir increased by low single digits driven by high teens growth in Europe and high single digit growth in our legacy Latin America. Business softness persisted in North America where sales decreased by low single digits Adjusted segment margin increased driven by the strong top line with flow through of 34.3% in performance. Coatings group sales increased slightly above the mid single digit range we expected with growth in every division and region. These results reflect the strong new account growth focus we have spoken about over the last year as demand in our underlying core business is still declining in some end markets.

Volume in the quarter grew by a low single digits, acquisitions were slightly positive, price mix was flat and FX was a tailwind. Automotive refinish sales increased by a low teens percentage driven by high single digit volume. The growth was broad based with sales up by double digits in all regions providing further evidence of the value we are delivering in this end market to win new business. Packaging continued its strong performance as sales increased by high single digits against a high single digit comparison.

General Industrial Coil and Wood also delivered solid growth. Group sales expanded in all regions including double digit increases in Asia Pacific and Europe. Adjusted segment profit for the group increased by mid single digits and segment margin was flat. Higher incentive compensation related to the strong year over year sales along with the significant FX headwinds drove segment SG and a higher resulting in muted flow through these same dynamics. In addition to our non annualized new building costs also drove SGA higher within the administrative segment.

The slide deck accompanying our press release this morning provides more detail on second quarter segment results. Now moving on to our guidance, the assumptions we provided in our January call and slide deck largely remain intact. What hasn’t changed is that our customer feedback as well as the indicators we track continue to signal little support for meaningful recovery in most end markets. What has changed is the Middle east conflict which has added further complexity and uncertainty in navigating the macro landscape.

Our team has repeatedly demonstrated its ability to manage through crises, most recently during the pandemic and the US Supply chain disruption, to name just a few. I am highly confident we are well equipped to manage through this newest challenge and continue supporting our customers at the highest levels. Let me provide some perspective here. First, we expect to see some negative impacts on demand from recent events as the year progresses, though it is difficult to predict the magnitude at this time given the highly fluid nature of the situation.

But I will remind you that this is our fourth year in a row. We have been operating with the expectation of getting no help from the market. We know we are operating in a share gain environment and we will continue to be very aggressive here. We see opportunity in uncertainty. We will continue to support our existing and new customers by being the most reliable and consistent business partner in our industry From a raw material perspective, our first objective is certainty of supply. The good news is that over 80% of our consolidated revenue is in North America.

The majority of raw materials for these sales are sourced in region and remain largely insulated from supply disruptions tied to Strait of Hormuz volatility. In areas such as Asia Pacific and emea, where supply could become more challenged, we are managing risk closely. Our focus over many years on building strong relationships with strategic suppliers versus transactional ones is a competitive advantage and should continue to serve us well in terms of raw material price cost dynamics. Costs for oil, natural gas and key petrochemical feedstocks such as propylene have inflated and remain volatile.

As we have previously indicated, sustained inflation in these commodities typically takes about a quarter or two before we begin seeing an impact in our P and L. Specifically, we would expect to see these inflating costs impacting us more materially as we move through the second quarter and into the second half of the year. Our industrial business is seeing inflationary pressures first starting in APAC and EMEA and to a smaller extent in North America. More recently we have started to see the inflationary impacts in our north and South American architectural businesses.

This leads us to increase our full year raw material inflation outlook to the range of up low to mid single digits. In this environment, we continue to focus on securing incremental volume balanced with appropriate and decisive pricing and cost out actions that allow us to maintain the products, services and supply solutions which drive productivity and profitability for our customers. In terms of pricing, we are out across the business with incremental targeted actions by customer geography and end market.

As a result, our expectation for consolidated price mix for the year increases to the high end of our low single digit range. We are actively working to limit these increases for our customers by accelerating meaningful and aggressive cost reduction actions. At the same time, we expect continued volatility in the raw material environment as the year progresses and we are prepared to implement additional increases if necessary. The slide deck issued with this morning’s press release includes our expectations for consolidated and segment sales for the second quarter of 2026.

Our consolidated sales and earnings guidance for the full year are unchanged, though our deck outlines some adjustments in the mix of volume, price and fx. The deck also contains other details you may find useful for modeling purposes. Sherwin Williams remains well positioned to outperform the market. We are highly confident in the clarity of our strategy and importantly our team’s deep experience and ability to out execute. In this environment. We remain deeply focused on the success of our customers while continuously assessing and adapting to market conditions and controlling what we can.

Whenever there is uncertainty and disruption, there is significant opportunity to demonstrate what makes Sherwin Williams so unique. This concludes our prepared remarks. With that, I’d like to thank you for joining us this morning and we’ll be happy to take your questions.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Certainly at this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Your first question for today is from John McNulty with BMO Capital Markets.

Question & Answers

John McNulty

Yeah, good morning. Thanks for taking my question. Maybe a question on the price and cost dynamic, it seems like on your pricing commentary sounds like it’s a little bit more surgical than maybe you’ve taken in the past and a little more customer specific or very end market specific. I guess given the global cost pressures that we’re seeing, why is it sounding maybe a little bit more surgical than usual and maybe a little bit less of a full across the board type price move? Can you help us to think about that?

Heidi G. Petz — Chair, President and Chief Executive Officer

Yeah. John, good morning. I’ll start and I’ll hand this over to Ben here for some color commentary. I do want to just demonstrate that this is an opportunity. We’ve operated through so many different types of cycles where volume is clearly key and the discipline of the team to know when and where to go with pricing and is on clear display. You see it in our first quarter results. But I want to take a moment before I hand this over to Ben. I said this in our prepared comments. It’s the credit to our 24,000 employees globally that are operating belly to belly with customers and have that intimacy so that when we do need to take pricing, we’ve got high credibility that it’s absolutely out of necessity.

I’ll hand it over to Ben to maybe give some comments on a more surgical approach.

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Hey, good morning, John. It’s Ben Meisenzaal. Yeah, just to add to what Heidi said here, I think one, you know, one place to anchor is that we have more than twice the pricing on this new guide than what we had in the original guidance that we gave you in January. And it reflects if you think about the phasing by the regions, we obviously know that Asia Pacific is maybe more impacted right now that’s going to impact EMEA North America comes later. You also have the phasing where industrial is impacted sooner than you would have architectural.

That’s because a lot of the solvent pricing that you would expect is you’d see first. Even the way that we buy is a variable here. You think about we’re like 50, 50 between contractual and spot buying. More of our architectural business is on a contract. And so you would expect on the industrial side you’re going to see more of that spot buying where you got more varied range of raw materials. And so these are all things that have gone into, you know, how we thought about the pricing here and Heidi’s absolutely right.

You know, we’re going to monitor and watch, we’re going to work with our customers. We’re also really early in the year still. And so we have a lot of opportunity if our base case doesn’t play out the way that we think we’re going to have, you know, that ability to go out and get additional pricing. And lastly, we always talk about it is balancing price with the right volume. And as we looked at some of the competitive opportunities, we’re not looking for all volume. And so that is an opportunity that we want to make sure that we don’t forget about here.

Operator

Thank you, John.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

We do ask to please limit yourself to one question. If you have any additional questions, you may re enter the queue by pressing Star one. Your next question for today is from Duffy Fisher with Goldman Sachs.

Duffy Fischer

Yeah, good morning guys. Just a question on cost. If you could kind of break the basket down a little bit where you’ve seen the increase and you know, going from kind of low single digits to low to mid. What is that based off of vis a vis spot prices? Do you think that we put in the peak already for a lot of, you know, the vams, the propylene’s, all that kind of stuff and they’re starting to roll over or do you think they’ll continue to go up just some help of kind of what that increase is vis a vis what you think the market’s going to show us over the next several months?

Operator

Yeah, good morning Duffy, it’s Jim. I’d say where we’re seeing the most pressure as Ben mentioned, would be more on that industrial basket. So you’re seeing that in the solvents, resins, those petrochemical based commodities. You know, propylene drives about 75% of our basket. And that pricing’s up because of the Middle east forecasted, you know, maybe up 50% more through the rest of 26 related to those disruptions. You know, the solvents are elevated as well. Epoxies, I would say, as well. Tio 2 for the most part has not elevated as much yet.

I think we’ve talked Duffy offline about the sulfur dynamics coming out of the Strait of Hormuz. The good news is we’re not really buying sulfate TiO2. I understand it’s a global market, but we’re more on the chlorinated side. So I think that’s important. The other thing I would say is, again, as Heidi mentioned in her remarks, you know, 80% of our sales are in North America and the vast majority of our raws that we’re buying come from that region. So from a supply perspective, we feel very good.

And the contractual buying that Ben mentioned, the way we buy is also helping us navigate these initial headwinds. Thanks for the question.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from David Begleiter with Deutsche Bank.

John McNulty

Thank you. Good morning. Hi. Just a small thing. On your guidance for raw materials, you removed the term select commodity inflation from the prior quarter slide deck. Can you help us with what that meant and why that was removed? Thank you.

Operator

Yeah, I’ll take that one. David. I think when we talked about earlier in the year, we just wanted to make sure that people were indicating that tariffs were part of it. And we wanted to say, hey, commodities were moving a little bit as well. We just took that off now because it’s very obvious that the commodities are moving upwards. So I wouldn’t read much into that. And thanks for the question. Dave,

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question is from Christopher Parkinson with Wolf Research.

Chris Parkinson

Great. Thank you so much. Heidi, you mentioned we’ve been consistently in a share gain environment over the last several years. Can you just give us kind of a quick update just given the current dynamics on how you’re thinking about gross spend, how you’re thinking about net new store openings and closures, just any dynamics that you could help us think about, not only 26, but also the trajectory which you still see for 27, 28 would be particularly helpful. Thank you so much.

Heidi G. Petz — Chair, President and Chief Executive Officer

Yeah, you bet. Good morning, Chris. There’s a lot of volatility obviously in the macro, but there’s also a lot of volatility in the competitive environment. I also said in the prepared remarks that is absolutely opportunity. You’re going to hear us talk about this jump ball environment. And so in this economy and in this competitive landscape, we’re going to be extremely aggressive in making sure that we continue to take more than Our fair share of volume. I’ll point to a couple examples here and then I’ll come back to the stores.

And your second question. If you look at our res repaint segment, we’re up mid single digits in a flat to down market focusing on a lot of these share gains. We see interiors are increasing some bidding activity. We’re going to take advantage of that. We see the exterior backlogs are very healthy. We’re going to take advantage of that. Our team has been out laser focused Justin Bins and the stores organization committing to aggressive new account activity. I would tell you it’s the strongest we’ve seen in a long time.

So even though there’s some slowing in the market, our teams are out chasing square footage earning business with these contractors every single day. I point to our commercial segment. We’re outperforming, there’s soft completions and yet we’re up mid single digits while completions are down double digits. And so again, some good bidding activity out there. We see some positive signals that there’s uptick with office tenant improvement, some modest uptick in multifamily starts that won’t benefit us for at least 12 to 18 months.

But we’re up year over year all four quarters of 25 and 26 because we’ve been completely focused on demonstrating value with these contractors. I’m going to take a moment and just give you a bit more by segment. If you look at our property maintenance, we’re up low single digits here in a market where Churns and Capex were both under pressure. So continue to be laser focused on how we can add value. Even in the DIY space, we’re up mid single digits in stores. That premium DIYer is holding up a bit better than that value conscious DIYer that prefers a home center environment.

Our protective and marine seventh straight quarter of being up at least high single digits. It’s all share gains. And so we’re going to be relentless in being very targeted on our strategic investments as we are obviously going to be very focused on taking costs out on the admin side. But to your point on stores, it’s going to be a continued disciplined process of looking at our portfolio. Ultimately, we’re going to be driving a focus on return on net assets employed. And so it’s incumbent upon us that as we’re looking at that portfolio, as we’ve done for decades, we’re going to make sure that we’re driving profitability and strengthening our flexibility and our agility.

As we see migration, as we see Changes in the competitive landscape. We’re going to be very thoughtful in chasing that volume.

Operator

Thanks, Chris.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question is from Ghonsham Punjabi with Baird.

Ghansham Panjabi

Yeah, thank you. Good morning. On the 2026 guidance, I think initially you had volumes up low single digits for your original expectation and then, you know, it seems like now it’s guided towards low single digits decline. Is the delta just your reflection of what you think the market will do the rest of the year, just given the sequence of events? And then what are the offsets as it relates to the intact earnings expectations on the plus side? Thank you,

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Goncham. It’s been on the volume piece. Yes. You heard us talk about a lot of the stronger price that’s coming through. We recognize that with some of the inflation that there is going to be a likely demand impact. And so I think what you see in our guidelines, keeping it full year in that same range, it’s how we get there is very, very different. And so we expect maybe volumes to be a little more muted. And you think through the consumer sentiment numbers, I mean we’ve seen the lowest level on record, even going back to GFC and Covid, we’ve seen prints that are much worse than that.

And so some of our guidance is baking in some of the expectation on that volume being softer there. And again, as we talked about on the prior question, price is obviously an offset to that and that helps us get to that same kind of guide for the full year.

John Roberts

Thank you Gonchem.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from John Robert with Mizuho.

John Roberts

Thank you. Here the current administration has turned its attention towards housing affordability. Do you see anything in the proposed actions that you think could help out the end markets materially?

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Hey John, it’s Ben. We’ve been monitoring obviously a lot of what they’re doing. We agree that affordability is a big part of the equation. We’ve talked about pretty openly that we thought rates was maybe going to be the first indicator that could drive additional unlocking demand then affordability and consumer confidence that may be more at the forefront. Our opinion is that we’d like to see some more of the supply opportunities versus some more of the gimmicky demand. You’ve seen the 50 year mortgage, you’ve seen, you know, the Trump homes, you’ve seen some of these other, you know, maybe shorter term unlocks.

And so what we’re looking for in some of these policy changes would be how do you get, you know, local governments working better with, you know, the federal government to open up Land that makes it, you know, more cost effective for the new home builders to lower their costs. That I’d say has a trickle down effect to the affordability piece for the consumer who’s buying the home. And so we welcome obviously any of the unlocking of affordability type mechanisms. And we’re watching that closely to see how we should be reacting and be ready to act when you do see something unlocked.

Operator

Thank you, John.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from Vincent Andrews with Morgan Stanley.

Vincent Andrews

Thank you and good morning. Could you talk a little bit about the margin improvement in consumer brands and I guess from a couple of different lenses, one, you know, should we think about that as a base level? Typically, I believe those margins go up in the middle of the year. So will they be improving sequentially? And then was there any reallocation of costs among the three segments? I recall in prior years, sometimes at the beginning of the year you’ve changed the, the cost allocation of the paint supply from consumer brands in the other two segments.

Thank you.

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Hey Vincent, it’s Ben. On the first part of your question, the margin improvement in consumer brands that you saw, a lot of that is coming from our global supply chain efficiencies. And we’ve talked many quarters over about a lot of the simplification and continuous improvement culture that the debt team has. And we continue to see benefits there. If you remember the second half of last year where our production was lower than what we had called out the first half of the year, that team is getting lean in a lot of different ways.

And so that’s a big part of what you see in the improved margin there. You also have some opportunities where our price mix has been a little bit better. You think about premium gallons improving in that segment and maybe a little bit of price ahead of things that Heidi and I have already talked about with inflation. And so you see that there and that part of it there. There is no reallocation. I know back in 2023 we talked about how we had that fixed cost allocation between the businesses. Nothing here.

You should expect to still see low 20s margin in this segment as we’ve talked about.

Operator

Thank you, Vincent.

Jeff Zekauskas

Holly, we have a.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Holly, are you there? Your next question is from Mike Harrison with Seaport Research Partners.

Michael Harrison

Hi, good morning. Was hoping that we could go back to pricing. It seems like maybe the realization that you’re Getting on that 7% increase from January 1st is a little bit better than you had initially thought. And I’m curious at this point, have all of those conversations with customers taken place and that the pricing is what it is or are there still some conversations yet to happen? And in terms of potentially needing another increase in response to what’s going on in the Middle east and higher raw material cost, has the window passed to announce a price increase ahead of this year’s paint season or would you be willing to kind of break tradition and go with a mid season increase if that’s what’s necessary or if you see competitors doing that.

Thank you.

Heidi G. Petz — Chair, President and Chief Executive Officer

Yeah. Mike, good morning. I’ll start with kind of a two part question, the first part of your question relative to the January increase, yes, the realization is better than we expected and yes, all of those conversations have happened and are out there as it relates to has the window passed or how do we think about maybe more of this turbulent environment? And we’ve done this in the past. In fact, I did this when I was running stores. When you’re in a more volatile environment, what we’re not going to do is go out with a big increase in the middle of the season and announce effective immediately.

But what we might do if we need to go out with price, we will go out with price in the middle or the beginning or the end of the season. But we’ll do it the right way. We’ll sit down with our customers, we’ll make sure that they are prepared so they’re not stuck absorbing this and we can work with them to get those into their bids. So we’ll do it very methodically. But let me be very clear. If we need to go again, we will go again.

Operator

Thank you, Mike.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from Greg Melick with Evercore. Isi,

Greg Melich

Hi, thanks. I’d love to dig a little deeper on the gross margin expansion in the first quarter. I guess the 90bps and what would it have been without the souvenir degradation? And if you think about going forward, do you think gross margins could be up each quarter this year, year on year? Or does that volatility mean there could be some quarters where it contracts year over year? Thanks.

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Hey Greg, it’s Ben. We haven’t been calling out the specifics with souvenirs, but I could tell you that it’s a multi basis point level up. We would have been over 100 basis point improvement without Souvenir in the quarter. And then as you look forward to prior quarters, you do normally see our gross margins increase into the selling season as our sales improve and we get better cost margin dynamics. There could still be a little bit of lumpiness. We’ve talked about Even with our midterm gross margin target that it’s not a straight line up, that it is a little bit lumpy.

But we would expect that we continue to get a little bit of expansion there and obviously all the things that we’re trying to manage through with the Middle east conflict and the raw materials that plays into it as well. But again, you look at the normal phasing quarter by quarter, you should expect us to see improved gross margins as we go into the spring and summer selling season.

Operator

Thanks Greg.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from Arun Viswanathan with rbc.

Arun Viswanathan

Great. Thanks for taking my question. I guess I was a little bit pleasantly surprised by some of the volume comments and performance across a couple of your businesses. So maybe in PSG still very strong I guess, or relatively solid resi repaint, do you see that continuing? And then in, in pcg better than expected performance at a refinish and general industrial and coil turning around, do you see those continuing as well? Thanks.

Heidi G. Petz — Chair, President and Chief Executive Officer

The answer is absolutely we see those continuing. And Arun, I’ll point to res repaint just a little bit more color on that. It’s the actions that we’ve taken over the last three to four years that help. Sherwin Williams has never been better positioned. I would tell you we’re better positioned now than even the turbulent last two, three, four years. And so the controllables mindset residential repaint. I won’t repeat what I said earlier, but this is an area where we’re bringing really important innovation forward and technologies to help job site productivity.

So an example, we just launched a product, a system called the Emerald Symmetry which is our best performing interior product that we’ve ever produced. So these have performance characteristics that are putting our contractors in a position to get on and off of job sites faster. The secondary benefit of something like this is this happens to be zero voc at plant based interior coating, so helps us on a number of fronts. We’re taking the time to make sure that we’re setting our contractors up for success and when we do that we get rewarded.

And so your point on some of the important businesses in pcg, just take a moment here. This doesn’t happen by chance. We talk about success by design. You mentioned refinish. We have very strong momentum here. We’re up double digits in every region. We’re getting price in every region and I think that is a demonstration of a clear value proposition that customers are really understanding. There’s a lot of dynamics certainly within the industry that we watch closely, but what we don’t do is sit back and wait for the market to correct.

We’re out chasing new business aggressively. Our direct installs continue to grow double digits in the quarter so so there’s a lot of Runway in terms of future share gains there. Packaging another fantastic example. We’re up high single digits. The global beverage market is up low single digits. The global food market is flat to down low single digits. So it tells you that we’re up high single digits. What we’re doing is working coil, general industrial and wood all have really positive stories.

The coil business, we’re up mid single digits and that’s despite a lot of softness that’s tied to the North American commercial residential construction tariff uncertainty. The teams are out aggressively hunting and GI is another great example. General finishing heavy equipment, they’re both up double digits so we’re out trying to offset core erosion and core softness there. And industrial wood being up low single digits to despite the correlation to residential there. The soft residential end markets that impact wood furniture, flooring and cabinetry.

So despite that backdrop, the team’s out chasing. So here’s the punchline. We’re building new muscle and I do expect that we will continue to keep our foot on the gas and take share.

Operator

Thanks, Arun.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from Kevin McCarthy with Vertical Research Partners.

Kevin McCarthy

Yes, thank you and good morning. I had a clarification and a question on the clarification side. Ben, I think you made a comment that the price embedded in today’s guide is more than twice what you had included last quarter. And I guess the clarification was is that all to do with the January 1st increase and the realization against that or have you implemented incremental pricing since the onset of the war on March 1st? And then just my question is on raw materials, you’re ratcheting the guide up a little bit, although frankly not as much as I might have thought.

So I was wondering if you could just talk about the quarterly cadence of that. I think you’re a majority LIFO company so maybe you can kind of speak to the accounting flow through and you know the assumptions that you’re making on duration of the conflict there. Thanks.

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Hey Kevin. Yeah. To clarify on the my price comment from earlier that is on the consolidated pricing, that would have been everything that we did in January with stores. That would be everything new that we’ve done since then. You see in our guide that we took up our pricing and performance coatings group and goes back to the comment we made industrial with all the more solvent borne type raw Materials with the international locations. That’s where we’re seeing it first. So that kind of phases into your second question of, you know, how do you see, you know, the raw materials flowing through?

And so our updated guide to low to mid on a full year, you have to expect that, you know, we’re in the first half of this year even as we have some of the deferrals, you don’t see it as much in the first half. You’re going to see it heavier in the second half. And as you exit the year, you’re going to be at the higher end of that upload to mid single digits. And so we’re managing that closely. And as I mentioned earlier, we have enough price with what we see right now for what that inflation is.

If the baseline changes. As Heidi mentioned, we’re willing to go out and work with our customers to implement new pricing. There’s plenty of time, you know, in the year to do that. And so that’s how we’re going to manage that. Thanks, Kevin.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question is from Josh Specter with ubs.

Josh Spector

Yeah, hi, good morning. I’ll go down a similar line of questioning as Kevin just, I mean, it’s surprising to hear that at the exit rate, you’re talking about the high end, a low to mid single digits on raws. I mean, we have math out there that says you could see raws up 20% in that range and that seems more consistent with some of the competitor price increases that are out there. So I don’t know if due to your North America exposure, you’d say that inflation is substantially less or if how you’re buying those raw materials and maybe some of the contracts either give you more protection for this year.

So this is more of an early 2027 inflationary event that you would see or if there’s something that gives you more permanent kind of protection against some of that. Can you, so can you talk about that a little bit and help us understand maybe what’s going on that’s different for you guys versus some of your competitors?

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Josh, it’s been, I can’t comment on how our competitors buy, but I can tell you with Heidi called out our strategic relationship with key suppliers. Our, you know, our procurement is maybe tighter than some of the others. And so we’re using that as a strategic advantage so that we’re not having to maybe pass as much price to our customers as some of our competitors might have to do right now that aren’t advantaged because of the way that their contracts are set up. And so we do have a number of spot buying.

We aren’t seeing, you know, the exit rates in that, you know, 20% range that, that you’re, you’re seeing. And again, I think you alluded to the mix of our business, the architectural and the industrial. That probably has some, some impact on that. And then again, I’ll point back to, you know, 50% of our business on contract. That’s an advantage, you know, for us right now.

Operator

Thanks, Josh.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question is from Matthew Deyo with Bank of America.

Matthew DeYoe

Good morning everyone. Heidi, you talked a bunch about the packaging. It’s been brought up a few times and clearly the numbers are really good. As we move into next year and we lap some of these regulatory shifts. How much of what you’re accomplishing now is because of that catalyst. Do you expect you can continue to outgrow the industry this much or would you expect growth to shift closer to that low single digit level that the industry is kind of growing at?

Heidi G. Petz — Chair, President and Chief Executive Officer

So it’s an interesting question because I think based on our preferred technology and our position to be ready for a lot of what’s coming. You know, I’m sure with efsa, the European Food and Safety Association’s ban on BPA is scheduled to take effect in Q2 of this year. And we’re at the very front edge of that. So there’s a nice tailwind there. It’s going to continue to drive a lot more customer conversions, certainly first half this year, well into the back half and into 27. And I can tell you with confidence that no one is better positioned to ride that.

So we do expect to see some significant wins here.

Operator

And Matt, this is Jim, just to add to that, that conversion to the non BPA Europe you called out. But really if you look at Asia and Latam, there’s still a lot of room to run in those regions as well. And thanks for the question.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from Chuck Sierrankowski with North Coast Research.

Vincent Andrews

Good morning everyone. Can you talk a little bit what you’re looking at in terms of the mortgage environment, household formations in North America for the remainder of this year?

Operator

Yeah, Chuck, it Jim. It’s Jim. I think in terms of the mortgage rate environment for this year, you know, we’re not expecting it to move a whole lot. And I think Ben referenced, you know, if you dial back a year or so ago, we were putting a lot of emphasis on rates getting below that 6 number. I think that would help. But certainly it’s more about affordability as well, and it’s sort of this triangle that we look at of rates, affordability and incomes. So we need all three of those to sort of work in sync, if you will, in terms of where we go from household formations.

It has slowed a little bit, but it’s still a pretty healthy rate in terms of household formations and we expect that to continue. And I’d also point to, as we’ve talked about many times, Chuck, you know, the structural deficit that’s out there in terms of underbuilt for a long period of time. So even if household formations do slow a little bit, there’s a tremendous pent up demand that has to happen. And whether that’s single family, if it doesn’t come through that way, it’s going to come through in multifamily.

People need a place to live. So we’re well positioned on that multifamily side as well.

Heidi G. Petz — Chair, President and Chief Executive Officer

One piece I would add to that, Chuck, as well, because the depth of our position with a lot of these national home builders and exclusive partnerships, I do believe we’ll be uniquely rewarded as this pent up demand starts to soften because it’s what we do right now in these partnerships. We said this on the supplier side. It’s true with our customers. We want to be the strategic partner that’s helping them solve for simplification, helping them solve for cycle time. And so I think the work that we’re doing now, while it’s masked in the market when things start to move, I think we’ll be uniquely rewarded for that.

Operator

Thanks,

Patrick Cunningham

Chuck.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from Patrick Cunningham with Citi.

Patrick Cunningham

Hi, good morning. I just wanted to unpack the lower performance coating sales volume guide. Have you seen any evidence of weakness quarter to date in order books or any indication that there was perhaps some pull forward in March? And conversely we’ve seen some fits and starts on stable to expansionary industrial activity, particularly in the U.S. Have you seen any areas of more positive underlying market growth?

Heidi G. Petz — Chair, President and Chief Executive Officer

No, I wouldn’t say, Patrick, that we’re seeing any material shift there in terms of orders or timing from a standpoint. But I’ll hand this over to Ben to give a bit more commentary on guidance.

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Yeah, Patrick, I think one way to think about it is we know that there’s going to be this gap in feedstocks. You’ve had boats that are on the water 60 to 90 days from the start of the conflict. And so at at some point Asia and Europe are going to feel the squeeze a little bit more than maybe what they’re seeing right now. And so I think what you have, what you see in our guide is a pretty realistic view that there is going to be kind of an inflection point where getting those feedstocks are going to be tougher.

That could have obviously a greater inflationary impact on the business there. We feel as big global companies we’re going to be able to get our, our customer’s product. It may come at a higher cost. So you may start seeing some people waiting for prices to come down and that could have an impact on demand. And so that’s really what you see in our guide that has that there. And I’ll call out, we’ve started to look at inflation not as an uncontrollable headwind, but a variable we’re actively managing.

And so you start to see that with how we’re looking at each of the different regions and that realistic view and our confidence for how we’re going to support our customers.

Operator

Thanks, Patrick.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from Lawrence Alexander with Jefferies.

Jeff Zekauskas

Hey, good morning. This is Kevin Especk on for Lawrence. Just in performance codings, just given the macro uncertainty, I guess how would you characterize customer behavior? Are you seeing, I guess, confidence around production schedules or sort of more short cycle ordering and hesitation to commit to like longer term orders? Thanks.

Heidi G. Petz — Chair, President and Chief Executive Officer

Well, there’s probably a mix if we’re honest on balance. I mean, I think there’ll be some prudence and people waiting to see kind of where, you know, cost of capital is. But there’s also a lot of confidence in the backlogs and the pipelines. And so it’s really a mix across the board. Kevin. But I think that it’s a portfolio. And so importantly in that while we would love for all segments to be up at all times across pcg, the reality is that we’re going to be very focused on where the market is and make sure that we are best positioned for that run up.

And so we’re going to continue to do what we do. Carl Jorgenbrood and that organization runs with a very strong sense of agility and urgency and you’re seeing that play out right now. I think our strategy is clearly working. What we said we would do, we’re doing it and we’re doing it better than we even thought. And that’s a result of that strategy.

Operator

Thank you, Kevin.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from Garrick Schmoise with Loop Capital.

Unidentified Participant

Good morning. This is Zach Pacheco, own for Garrett Schmoise. Thanks for taking my question Just another quick one on customer behavior. Do you guys get the sense of any pre buy taking place due to inflationary increases in which customers are trying to lock in supply, or is this not really something you’re seeing in this moment? Thanks.

Heidi G. Petz — Chair, President and Chief Executive Officer

We’re not seeing that in this moment. Nothing material. We’re not at all concerned on that.

Unidentified Participant

Thanks, Jeff.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question is from Mike Sison with Wells Fargo.

Michael Sison

Hey, good morning. Nice quarter, Heidi. It just feels like US architectural paint demand in the US has been structurally impaired. If this continues through the end of the decade, how do you sort of think about strategy in this environment for even longer than we’re seeing it? And then just curious on your 2026 full year, your sales guys for paint stores group, are we kind of tracking toward that down low single digit given how the housing market is shaping up this year?

Heidi G. Petz — Chair, President and Chief Executive Officer

So Mike, two part question. I’ll take the first part on demand and then hand it to Ben for guidance. I wouldn’t use the word impaired. I would say under pressure. But you can imagine when we’re sitting in our conference rooms and boardrooms, we are looking at every scenario, including software, for much, much longer. And so I can assure you that we do have a whole host of multiple levers that we look at, we contemplate. We don’t want to have to pull some of those. And so we’re going to do what we said we would do.

It’s control, the controllables. We’re going to look at this as a jump ball environment. There are a lot of gallons available on up for grabs right now. And if I even point to res repaint, Mike, you know this well, you know, this is an area where not only do we continue to take share, but it’s the area where we have the most share to gain. And so even in this environment, we’re going to continue to outperform the market and we’re going to compensate for some of that core softness.

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Yeah, Mike, I’ll add to that. I mean as far as our full year guidance for paint stores group, it remains in line in that low single digit and you don’t see as many of the variables changing as maybe you saw with some of the other segments. And so I think that’s a barometer of confidence for us and how we’re assessing the business there. But as we’ve talked about already, we’re going to continue to make the right selling investments there. There could be different mix by the different segments that Heidi has walked through, but we feel pretty confident about our continued opportunities Especially with all the share gains that we’ve been after in Storrs group.

And so that’s why you see the guide kind of remaining where it’s at.

Jeff Zekauskas

Thanks, Mike.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question is from Sebastian Bray with Behrenberg.

Aron Ceccarelli

Hello, good morning and thank you for taking my question. I’m interested in two areas where Sherwin has taken market share. Refinish and the Emea decorative market. What is it that Sherwin has to offer in refinishing that its competitors don’t? Is the aggressiveness on pricing something that has happened here? And any comments that you can give on Emea Deco are welcome. I think Sherwin has a relatively niche position in UK and one or two other markets. Thank you.

Heidi G. Petz — Chair, President and Chief Executive Officer

Thanks, Sebastian. So on the refinish side, I’ll take you not to make this a history lesson, but I think context is really important here. If you look at the acquisition of Valspar a few years ago, if you leverage the best of both, we’ve combined not only our controlled distribution platform with our automotive business and everything that we have to offer with the subject matter expertise of our reps that are embedded in these customers body shops. Then you layer in with Valspar the waterborne technologies that we’ve been able to bring together and we really have created kind of a best of both in terms of the value proposition.

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Yeah. And I’ll take a little bit on the Europe sales made. Europe benefited from a reporting mix impact this quarter. A certain immaterial resin sales we had previously reported as part of Performance Coatings Group are now fully integrated and reflected in our global supply chain which is reported here in our Consumer Brands group. And so don’t read too much into the much stronger reported sales. If you look at the core sales of Consumer Brands Group in Europe, it grew by more of a mid single digit percentage if I exclude that resin classification.

And similar to what we’ve seen in Europe with the challenging environment, DIY being a more challenged part of the segment, I think you see that playing out here.

Operator

Thank you, Sebastian.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question for today is from Eric Bosshard with Cleveland Research Company.

Eric Bosshard

Hi. I’m intrigued. You commented that DIY volume in stores is up 5% and it feels like the rest of retail it was down maybe 5%. Can you talk about why? And then also talk a bit more about the down five at the rest of retail and where that’s going from here.

Heidi G. Petz — Chair, President and Chief Executive Officer

So Eric, if you look at the DOI segment and split it into, you know, the premium, the homeowner that’s willing to pay a premium rather and is looking for that high touch. Service generally prefers the specialty store environment. So the up was our sales were up. It was not volume. So that’s obviously a mix of both volume and price. If you then look at more of that value conscious homeowner that might prefer a specialty or a home center environment rather, that’s where our strategic partnerships with Lowes and Menards and others are so important.

So that together we can cover that landscape. But really it is kind of unique if you split those out. They’re different behaviors right now given some of the inflationary pressures.

Jeff Zekauskas

Thank you, Eric.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

Your next question is from Jeff Zikaukis with JP Morgan.

Jeff Zekauskas

Thanks very much. Is it fair to say that your architectural paint price increase happened at the very beginning of the year, but there haven’t been architectural increases since then. But in your industrial businesses you have increased prices later in 2026 and I was wondering how much that might be what those price issuances were. And then secondly, in your description of raw materials, you said that 75% of your raw materials are related to propylene and you said that propylene was up 50%. So wouldn’t that mean that your raw materials are up 38%, 37% if you ignore timing?

Ben E. Meisenzahl — Senior Vice President – Finance and Chief Financial Officer

Hey Jeff, it’s Ben. I’m going to take this first part here. I’ll let Jim answer the question about raw materials, the pricing, phasing, you’re right. Yes. Our architectural price that we went out with in January, you know, the intention before the conflict was that, you know, that’s the price that we needed for the year. And if you go back to our initial raw material guidance above low single digits for the year we built that, you know, that initial pricing based on that assumption that we made at that time.

And as you can imagine, we have a lot of architectural customers who are on contracts or we have other points throughout the year and we’ve talked about our effectiveness can get better throughout the year as you hit those certain milestones where we’re able to get more pricing. But yeah, you’re right, a bulk of that comes at the start of the year. Industrial historically has been all throughout the year at different times based on business needs, based on what the raw material basket is doing. And so I think what you’ve seen post Middle east conflict, we’ve had to go out and reassess in all parts of the business.

And so even though there’s not an announced general increase for paint stores group as we try to manage, you know, through cost out and other simplification efforts, you know, there might be some spotty other areas where we are able to get price without doing a full launch. And similarly with the industrial business, as you can imagine Asia and Europe, where you’ve got pricing that has got to be 20% or higher to cover where you have the bigger part of the inflation happening, our teams are out by the business unit and geography getting coverage where they need.

And again, that would be bigger again on industrial in apac, in emea, there are still industrial impacts that are happening in the Americas. And so there’s pricing that is going out there on the industrial side. But I think as we’ve talked about on a couple of the different questions and even in Heidi’s opening remarks, being very surgical in trying to find where we can take that price without having to be generic because we realize right now in this inflationary environment, we don’t want to put volume at risk.

And so you have to do that maybe to a stronger degree than you normally would see us do. And

Heidi G. Petz — Chair, President and Chief Executive Officer

Our confidence that being very thoughtful about chasing volume in this environment, that with the right program stuff, we’re trading these contractors up because the ability to get them on and off of job sites faster, the ability, you know, less touch up required, they’re willing to pay a premium for that even in an inflationary environment because 85% of their cost is labor. And so we’re being very thoughtful to get the volume and it has to be the right volume to Ben’s earlier point. But I’m very confident in the team’s ability to get these contractors into premium gallons.

Operator

And then Jeff, on your question about propylene, I’d give you a couple things to think about. You know, the 50% that I mentioned is a forecast of where it could go perhaps over the rest of the year. We’ll see how that plays out. And as Ben mentioned here, we’ll be out with price if we need to. There. The other thing I would say is, as you know, we’re not buying propylene. We’re buying, you know, the things that are derivatives of propylene. Those do take some time to flow into basket and we’ll be ready again if we need to go out with additional surgical price increases.

That is, we’ll be prepared to do that. Thanks for the question.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

We have reached the end of the question and answer session and I will now turn the call over to Jim Jay for closing remarks.

Operator

Yeah, thank you, Holly. And thank you again everyone for joining our call. And special thanks to our employees for their hard work in delivering a really solid start to our year. I think Heidi said it well. Our strategy is clear. It’s working and it’s not changing. We’re continuing to focus on providing our customers with solutions that make them more productive and profitable. You can count on us. We’re going to continue executing at a high level, focusing on winning new business and controlling what we can.

I’ll close with a reminder. Our 2026 financial community presentation is coming up in Cleveland this year, September 24th. You’ll have an opportunity to see our investments in our new global headquarters and our global Technology center. Excited for all of you to experience that and see how that’s moving the needle forward for us. So thanks again for your interest in Sherwin Williams. As always, we’ll be available for follow up calls and hope you have a great day. Thank you.

James R. Jaye — Senior Vice President, Investor Relations and Corporate Communications

This concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.