Sherwin-Williams reports strong fourth quarter
Sherwin-Williams today reported further strength in the fourth quarter and a strong financial finish to 2007.
In the fourth quarter ended Dec. 31, the paint and coatings giant reported net income of $100.82 million, up 2.2 percent from $98.68 million in the same period last year. Sales rose 3.4 percent to $1.85 billion from $1.79 billion last year.
Company-wide, Sherwin-Williams saw full year net income rise 6.9 percent to $615.58 million from $576.06 million last year. Sales for the full year rose 2.4 percent to $8 billion from $7.81 billion in 2006.
Results varied widely in its individual divisions, however.
In the company’s Paint Stores Group, net income for the fourth quarter fell 3.14 percent to $157.6 million from $162.7 million last year. Sales in the paint stores segment rose 24.3 percent to $1.38 billion from $1.11 billion in last year’s fourth quarter.
For the year in the Paint Stores Group, net income rose 6.5 percent to $766.5 million from $719.9 million. Sales in Sherwin-Williams’ paint stores rose to $4.96 billion, up 2.5 percent from $4.84 billion in 2006.
“We continue to be encouraged with our Paint Stores Group’s ability to diminish the effect on sales of a very tough U.S. economic environment, continuing pressure in the new housing market, housing turnover and softness in DIY customer demand,” said Christopher Connor, president and CEO of Sherwin-Williams. “We have continued to invest in our business in 2007 by expanding the Paint Stores Group’s U.S. controlled distribution network, adding 107 net new stores and acquiring another 172 stores.”
In its Consumer Group, which includes Sherwin-Williams paint and coatings lines sold in other retail stores, net income rose 1.8 percent to $21.33 million from $20.96 million in the fourth quarter last year. Sales in the quarter fell 5 percent to $264.3 million from $278.4 million last year.
For the full year, Consumer Group net income rose 4.6 percent to $224.15 million from $214.2 million in 2006. Sales in the Consumer Group fell 4.38 percent to $1.31 billion from $1.37 billion in 2006.
Internationally, Sherwin-Williams saw net income rise a healthy 31.5 percent for the quarter and sales rise 12 percent in the fourth quarter.
For the year, Global Group net income was up 23.2 percent, while Global Group sales for 2007 were 8.7 percent higher year-over-year.
New home sales show further weakness
New single-family home sales fell further in December, down 4.7 percent from November, according to figures released today by the United States Commerce Department. December’s seasonally adjusted annual rate of 604,000 units was a full 40.7 percent below the same period a year ago.
The National Association of Home Builders (NAHB) called the lower results further evidence of a need for a federal “economic stimulus package to boost the ailing economy.”
“The continuing deterioration in the housing market, as reflected in today’s numbers, underscores the need to do more to stabilize housing and the economy,” said Jerry Howard, executive vp and CEO of the NAHB.
“[Federal] policymakers are meeting this week, and they can do their part to help by continuing to cut interest rates and inject liquidity into the financial markets,” added NAHB chief economist Dave Seiders.
Regionally, new home sales fell 6.5 percent in the South, 6 percent in the West and 1.2 percent in the Midwest month-over-month. The Northeast posted a 6 percent gain. All regions were down substantially on a year-over-year basis, ranging from a 27.4 percent fall-off in the Northeast to a 55.8 percent drop in the Midwest.
The inventory of new homes for sale was down 2.3 percent to 495,000 units in December, as builders continued to gradually work down their inventory. The equivalent months’ supply at the December sales pace edged up to 9.6 months from 9.4 months in November.
Restoration Hardware agrees to lower price in merger plan
Corte Madera, Calif.-based Restoration Hardware, a specialty retailer that has had financial difficulties over the last year, has agreed to a lower per-share price from investment group Catterton Partners.
According to the company, it will now accept a per-share price of $4.50, down from an original price of $6.70. The new agreement still allows time for competing bids from other companies, including Sears Holdings, which earlier offered a bid of $6.75 per share for the high-end home decor retailer.
“This additional time period for competing proposals will allow Sears or other third parties that may have an interest to make an offer to acquire the company,” said Restoration Hardware in a statement. “There is no assurance that any third party, including Sears, will pursue a competing proposal to acquire the company or that the solicitation of superior proposals will result in an alternative transaction.”
In mid-January, Restoration Hardware revealed sluggish holiday sales. The company said net revenue took a small hit, falling 1 percent to $171.5 million from $173.2 million in the same nine-week period last year.