Sherwin-Williams makes paint and sells most of it through its own stores. Recent sales growth leans on an acquisition, currency and price in a soft market, while payouts to shareholders now exceed the cash the business frees up.
If a painter has ever redone a room in your home, the paint may well have come from a Sherwin-Williams store. The company makes its own paint and sells most of it over its own counters, through thousands of stores it runs in the United States, Canada and the Caribbean. Owning both the factory and the shop lets it keep the maker's margin and the retailer's margin on the same gallon.
Painters and homeowners pay at the store counter for paint, stains and supplies, and that counter is the main engine. A manufacturing unit behind it makes much of what the stores sell, and also sells to home centers and hardware stores. A third unit sells coatings under a broad set of its own brands. Two costs decide what remains. The company passes raw material and energy costs on through its selling prices. The store network and sales force must be paid whether demand is strong or soft. Suppliers also help: the company pays them later than its stock typically sells, so they effectively finance the shelves.
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