SHW · 10-Q · 2026Q1 · Full report

Gross Margin Drivers

SHERWIN WILLIAMS CO · 2026-04-28 · Importance 37 · Surprise 32

Consolidated cost of goods sold increased $139.8 million (5.1%) in Q1 2026, primarily reflecting the Suvinil acquisition and foreign currency translation (2.2% COGS impact), partially offset by moderating raw material costs. Consolidated gross profit rose $221.4 million and gross margin improved to 49.1% of sales from 48.2% a year ago, driven by higher selling prices, volume, the Suvinil acquisition and supply chain efficiencies. Paint Stores and Consumer Brands both contributed to gross profit expansion via pricing and supply-chain gains, while Performance Coatings benefitted from FX and volume. Management cites moderating raw material costs as a tailwind to gross margin in the quarter.

Key facts

• Consolidated Gross profit increased $221.4 million in the quarter ended March 31, 2026 versus the quarter ended March 31, 2025 primarily due to higher Net sales, the acquisition of Suvinil, moderating raw material costs and favorable foreign currency translation.
• Consolidated Cost of goods sold for the quarter ended March 31, 2026: $2,886.4 million (50.9% of Net sales) versus $2,746.6 million (51.8% of Net sales) in the quarter ended March 31, 2025.
• Consolidated Gross profit for the quarter ended March 31, 2026: $2,780.5 million (49.1% of Net sales) versus $2,559.1 million (48.2% of Net sales) in the quarter ended March 31, 2025.
• Consolidated Cost of goods sold increased $139.8 million, or 5.1%, in the quarter ended March 31, 2026 versus the quarter ended March 31, 2025 primarily due to the Suvinil acquisition and foreign currency translation which increased Cost of goods sold by 2.2%, partially offset by moderating raw material costs.
• Paint Stores Group Gross profit increased $85.8 million in the quarter ended March 31, 2026 versus the quarter ended March 31, 2025 primarily due to higher Net sales from increased selling prices and sales volume growth.

Impact estimates