Sherwin-Williams earnings fall in the first quarter
Sherwin-Williams saw earnings fall in the first quarter of 2008, but the worldwide paint and coatings giant is still seeing strength in international sales.
Earnings fell 30.3 percent in the first quarter to $77.9 million from $111.8 million in the same period last year. Net sales grew just over 1 percent to $1.78 billion from $1.76 billion in the same period last year.
The stronger net sales were in large part due to strong Global Group sales, as was the case last quarter. Favorable currency rates and eight acquisitions since last year’s first quarter helped aid international sales, according to the paint company.
In the company’s retail Paint Stores Group, net sales were $1.031 billion in the quarter, 1.9 percent lower than in last year’s first quarter. Sales were weak due to “soft architectural paint sales and weak sales in non-paint categories partially offset by improved industrial maintenance product sales.”
Same-store sales decreased 6.5 percent compared with last year, and earnings decreased 31.9 percent. Earnings were weaker because of increased product and freight costs, the company noted.
The company’s Consumer Group, which includes paint products like Dutch Boy, saw sales decrease 4.8 percent in the quarter to $286.9 million. The sales decline was due primarily “to soft DIY demand at most of the segment’s retail customers.” Earnings in the Consumer Group were down 23.7 percent due to higher raw material costs, as well as a lower volume of movement at the company’s distribution centers.
The Global Group’s net sales increased 14.8 percent to $461.9 million due to market share gains, selling price increases, favorable currency translation and acquisitions. Earnings for the Global Group increased 21.7 percent to $7.7 million.
“Paint demand in the domestic new residential, residential repaint, DIY and commercial markets was weaker during the first quarter than we had anticipated at the start of the year,” said Christopher Connor, chairman and CEO of Sherwin-Williams. “We continue to be pleased with the strong sales improvements of the foreign business units in our Global Group and the continued growth they have been achieving in the architectural, industrial maintenance, OEM and automotive finishes product lines.”
Connor also noted that the Paint Stores Group opened 17 new stores in the first quarter and closed 23 “redundant stores.”
BlueLinx records $10.6 million loss
Building products distributor BlueLinx Holdings recorded a $10.6 million loss in the first quarter, deeper losses than the $189,000 hit taken by the company in the first quarter last year.
Revenues decreased 25 percent to $716.8 million from $957.1 million for the same period a year ago.
Structural product sales took the biggest hit, with sales down 28.1 percent, while sales of specialty products fell 22.5 percent. Head count reductions in the fourth quarter led to an 8.8 percent decrease in operating expenses, but it wasn’t enough to offset downward pressure from the housing market.
“We remain focused on managing cash flow by tightly managing inventories, receivables and our operating expenses,” said Howard S. Cohen, interim CEO for BlueLinx. “Our company is financially positioned to be able to continue executing throughout this housing downturn.”
Earlier this year, former BlueLinx CEO Steve Macadam announced his resignation, with plans to accept a position CEO with EnPro Industries, a Charlotte, N.C.-based provider of engineered industrial products for worldwide manufacturing industries.
BlueLinx ranked first on the Home Channel News Top 150 Distributors Scoreboard in 2007.
DWR will open New York flagship
Design Within Reach (DWR), the San Francisco-based specialty retailer, has announced plans to open a new flagship store in Manhattan.
The new 4,000-square-foot Studio storefront will be opened in Soho and is planned to feature high ceilings and an open floor plan.
“Our new flagship Studio places DWR in the heart of the world-renowned SoHo shopping district,” said Ray Brunner, CEO of Design Within Reach. “[The location] will provide an improved retail layout with a greater selection of our products on display and much higher visibility and foot traffic.”
The new store will feature design based around New York City subway maps, as well as new fixtures and wall graphics for the chain.
The company will close its existing Soho Studio on May 22 in anticipation of the new launch. Most notably, DWR said it will repurpose that 3,500-square-foot space for a new retail concept to be launched in September 2008.