SHW · 10-Q · 2026Q1 · Full report

FX / Currency Headwinds

SHERWIN WILLIAMS CO · 2026-04-28 · Importance 24 · Surprise 14

Foreign currency translation was a notable driver in Q1 2026: consolidated net sales benefited from a 1.7% favorable translation impact while several segments reported FX-driven sales gains (Performance Coatings 4.1%, Consumer Brands 2.4%). Net sales of consolidated foreign subsidiaries increased to $1.279 billion in Q1 2026 from $1.045 billion in Q1 2025, led by Latin America (inclusive of Suvinil). The Company uses cross-currency swap contracts designated as net investment hedges for European operations and forward foreign exchange contracts to hedge currency exposures. Management states it does not expect foreign currency translation or transaction exposures, nor hedging contract losses, to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Key facts

• The Company utilized U.S. dollar to euro cross currency swap contracts in 2026 and 2025 designated as net investment hedges and entered into forward foreign currency exchange contracts in 2026 and 2025 primarily to hedge value changes in foreign currency.
• Consolidated Net sales increase included a 1.7% impact from favorable foreign currency translation in the quarter ended March 31, 2026.
• Foreign currency translation rate changes increased diluted net income per share by $0.03 in the quarter ended March 31, 2026.
• Other (income) expense - net was income of $4.0 million in the quarter ended March 31, 2026 compared to an expense of $2.9 million in the quarter ended March 31, 2025.