The Sherwin-Williams Company (SHW) 28 Jul 202020 Q2 Earnings call transcript

Good morning. Thank you for joining The Sherwin-Williams Company’s Review of Second Quarter 2020 Results and our Outlook for the Third Quarter and Full Fiscal Year of 2020. With us on today’s call are John Morikis, Chairman and CEO; Al Mistysyn, CFO; Jane Cronin, Senior Vice President, Corporate Controller; and Jim Jaye, Senior Vice President, Investor Relations. This conference call is being webcast simultaneously in listen-only mode by Issuer Direct via the Internet at www.sherwin.com. An archived replay of this webcast will be available at sherwin.com beginning approximately 2 hours after this conference call concludes. include statements will U.S. defined call conference certain as forward-looking under This securities sales, to with and federal respect earnings laws other matters. speaks is company of new Any which forward-looking statement, update statement only future a the any of forward-looking result as day or such revise statement no events made, undertakes the information, whether and obligation to as on or otherwise. this forward-looking statements company’s transmitted earlier the is earnings in regarding morning. provided declaration full A release After session the company’s to will remarks, the open prepared we questions. call the turn now to Jim will I over Jaye.

Thanks, the hope are Jesse. you and remaining safe morning, everyone. Good I your and pandemic. families healthy during

Let me in otherwise updated improvement sequential were delivered sales down XX given Total company operating begin second for the the line level guidance the very quarter. Overall share with to of cash. tax, the comparisons and environment. income with quarter in a summary quarter stated. net comments per each improvement quarter. margin, the some June provided we in Despite we second sales are of the on EBITDA, diluted consolidated Sherwin-Williams being gross high with quarter, unless XXXX, net profit before on month delivered All good year-over-year

inclusive $XXX.X net Second from The decreased XX% share. to Consolidated Diluted per before million quarter profit gross to of per from $X.XX increased sales Consolidated negative to margin XX.X% tax XX.X% on X.X% $X.XX XX.X%. points from $XX.X basis per million. share XXXX was of negative share consolidated to estimated XXX or income increased $X.X consolidated increased impact COVID-XX billion, currency impact sales X.X%. negative approximately X%.

acquisition per included XXXX related amortization of $X.XX quarter expense share. second of The

share. related XXXX included amortization $X.XX adjustments and second of expense The of other acquisition quarter per

Regulation G our table As press release. described in in included the reconciliation

of in Group $X.XX XX.X% sales. X.X% cash XX.X% XX.X% Segments from and to group to sales $XXX from operating our increased and June on international of updated XX% Group segment able or over all high the impact margin to margin Excluding to reduced earnings and year-to-date sales, segment sales, to second to Adjusted improved input driven share top XX.X% Segment guidance $XX.X costs, input the to nearly year XX.X% spending control increased of to lower brands some, adjusted decreased actions Coatings were diluted the were line offset $X.XX. as but million line costs input mix, billion product as consumer sales. $X.XX million Net increased The sales in decline. of margins. of by EBITDA Adjusted good Performance XX% well quarter and increased customer per margin not costs or provided with these resulting lower items, operating the we leverage of teens the also in Adjusted the past spending. growth taken on sales, Americas lower were XX. operating the of in improve favorable

release in our details our are website. Additional segment included the available provided deck on on press with our slide and performance

the on over me Morikis, for outlook. Let to the commentary additional and quarter turn John call now our some John?

everyone. Jim you, and good morning Thank

the circumstances. me of continued employees under more Let by thanking determination very and begin for than resilience challenging Sherwin-Williams their XX,XXX

in deliver crises. significant time and our measures leaders persevered this us during our across last a improvement on have through has the many previous mentioned I call, been As differentiator quarter. senior several experience true enabled Their to

sales us in we out out were appreciation with to some better The revise has The they than quarter pace faster year. serve and quarter. my of anticipated high played which entire sales pace down April, continue customers was Our throughout team of percentage of teens year-over-year June to flat the mid but the decreasing expected with a at on decline as our a led sequentially June level. respect, recovery Consolidated last XX. in came our to than quarter the end guidance by markets,

Jim product basket gross in raw by As in and mentioned, driven costs. quarter XX%, and mix prior the customer margin down industry of to The input materials lower was the to mid-single-digit year. the by favorable quarter percentage compared expanded

pandemic. support cost developed million, spending terms our the March of by In $XX the investments adjust control, began implementing comprehensive to SG&A but in maintain quickly to strategic contingency in long-term team a and growth. quarter plan to reduced the also We

U.S. we’re painting bit get that case still we professional the based were segments believed segments one moving Canada and on summer better the are. believe painters we’re to trends the seeing a all force opened our and responsibly store eager saw segments we no is of and The than is each all on we pause tell us customers We commented this demand about before momentum in in in our demand back the positioned they’re now progressed. Group, in talk multiple me destruction. than sales in rather we season quarter, We’ve our the and Let as Last into work. serve In Americas safely that we quarter to outlook. to to a seeing

improved provide grow the repaint the robust each improved would sales In marine pace we is quarter, that flat low-single-digit to grow. growth last to paint also but month and Commercial increased the down requirements. The was by positive both June the maybe pace yet current quarter. being business paint, to and June. a quarter, recovered the and in distancing perspective, throughout year. percentage quarter. new business product the Property throughout and decreased paint unprecedented DIY like as were with in an exterior given percentage of June. the the comment but strongest residential in quarter typically sales at in DIY, returned From protective quarter mid-single-digit to circumstances. faster was interior the sequentially, expect best June the in our in a have month deliver social quarter extraordinary improved in After and continued residential interior and performers the slightly than don’t and by few data month, While Exterior to I by helpful maintenance recovering on of to would paint due finishing not you points

the the was June. quarter. digits sales often future were indicator pump Additionally, are demand expected of equipment, quarter, of approximately to sales a as equipment future unless strong the month in unlikely came down finish in second Pricing Spray this spray in as of good in mid significant type equipment and we contractors recovered in pump invest and but they are anticipate to X% demand. single

innovative similar the while new quarter. stores and reps, third anticipate continuing enhancing still in services. opening of on approximately XX products expect level focus We effectiveness management sales new to a adding We this productivity year, trainees,

We in also invest usage. platform continue e-commerce and our we’re to in uptick with pleased continuing the

by our Group. our tackling the quarter, throughout working surged demand, double-digit closely growth capture nesting generated driven consumers Consumer Brands our improvement to demand home Lowe’s, retail most projects customers during to with home center by the partner. national this DIY on Moving and pandemic. We strong exclusive notably

lines prior to pivoting during soft. significant to operating adapt cans chain China to Europe, positive year. growth from multiple to the to the we Our improvement in remained DIY production gallon help gallon demand. margin compared the including quarter, invest single saw Australia continued meet unprecedented organization global and the drive X on pails while leveraged and We strong supply Internationally, growth sales

to costs in Asia enhanced us and our European long-term also margin in and the partners, business, ACE who improvement to reducing for label taken the year our rationalizing actions profitability private category. the business SKUs, business, Handyman the Our the reflects paint This will our streamlining portfolio, of enable Australia. retail drive over past benefit including focus in reinvest exiting remodeler, especially pros growth to

new refinish, I mentioned TAG improvement by as served in flooring remain a down business markets perspective, trends sales region beverage and in selected quarter. for including pandemic strongest has earlier. digits improvement construction and earlier more Lastly, a to coil is was In of were influenced All the for cabinetry exiting saw improvement improvements low-single-digit Demand of including construction, environment Performance traffic quarter. quarter, economic on at positive improved though the by though regions miles commercial commercial industrial remained Asia during return in Asia let which residential are for sequential most double-digit Group. In Europe general sequentially the the and All percentages in during This quarter, percentages, my unit. orders industrial better did soft, the within including across Encouragingly, industrial, the sequential variable trends by improvement comments quarter lifting end Certainly, were From remained driven business in was quarter by quarter. construction of remain. the improved the the percentage. the geographic during regions up the over, and routines. other TAG of and uncertainties resumption improve up pace in furniture, geography segment, than end North finishing, business Many high-single-digit Coatings levels. quarter, Latin continues business the with other congestion heavy equipment, in every wood, sequentially. resumption remains saw momentum performer normal growth automotive on aligns group sales positively percentage. America. me gained the depend by the in kitchen Demand was though the sequential coatings, in stay-at-home in our drove In to a were comment the and a of reduced double-digit June. the significantly numerous which on projects the We the quarter. agriculture, down In high-single robust. transportation we food cans though quarter, in the America and not business and were the in In general packaging, the markets the down travel the general and sequentially this

the low-single-digit of However, demand to extent growth. XXXX. from to softness We economies deliver percentage backdrop, to energized U.S., market by up third the anticipate opportunities phase of to recovery engaged the team remainder containment is the and third XXXX a quarter shift the third the in net end be quarter continue improve sales our the and above some current to quarter sequentially we down to pandemic, second but phase are anticipate Against or that from capture beginning XXXX. markets the internationally versus and of this in consolidated will quarter for

the Group Group to third to mid-single Looking Performance for Brands be low-double digit digit our to low-single Consumer percentage, flat and up Coatings percentage a Group a anticipate digit segments percentage. up The low Americas to by at be quarter, operating we be down by to

guidance reflects year timing modestly For uncertainties to operating operating XXXX, the the flat full and in in segment last basis percentage, The percentage. sales This percentage, the continued year, improvement our flat low upward Americas of U.S. be guidance by for by an we’re to year. the low-single-digit pace approximately On with and down global a environments. full Coatings Performance mid-single-digit up Group be to a a Brands Group anticipate Consumer to to to high-single-digit revising be we up by Group and

by compared XXXX earnings expect We acquisition-related basket will increase of basis, $XX.XX share. for full we share per X.X% diluted mid-single of range Based includes for year the will XXXX. per outlook approximately earned guidance per net year we year XXXX the expense per second guidance share our deflation. to the amortization the and adjusted a per $XX.XX compared to are share income be the per delivered digit share on at revising the XXXX industry of we beneficial $XX.XX year. current an the assumption the midpoint $XX.XX to to year-over-year Full is an of that share, $XX.XX On previous $X.XX in be lower quarter to share to our most guidance over our within material $XX.XX of $XX.XX Embedded earnings in $XX.XX, full raw our outlook, of percentage. expect be terms in last per

half first of benefit XXXX. the the saw back be the half second deflation half expect to in the less given comparisons We benefit, will than we

me our data allocation capital priorities. Let additional close update some points and with an to

June At cash, Our and under had revolving unused credit company. XXXX, million approximately $XXX balance in the our liquidity billion the we capacity of facilities. sheet position remains of strength and $X XX,

debt leverage compared X.X year total on to times ratio to X.X to ago. adjusted Our times a EBITDA improved

amount our cash in This XXXX. to CapEx share share, Directors seeing restarting. the raising several improving the minimal over the of related new the $X.XX capacity This a we Earlier year XX.X% for spending month, are Given sequential dividend $XXX an expansions increase $X.XX we’re this company’s demand our guidance the headquarters dividend guidance and a includes to of markets, is to related architectural in of of from per million R&D $XXX end second project. largely of packaging and CapEx facility approved paid Board quarter million. per

are increase off paid We rest of throughout that were this X.XX% million notes $XXX the committed in XXXX. to May, dividend we maintain In due.

in adjust with and Again, to return expect to minimum programs. stabilizing long-term of spending debt during followed given options. XXXX. of to by workforce year, a due shares paused second in XXXX, environment, multiple is dilution time million the share million open at the next in due purchases were we second pause our believing forced repurchases a goal Our We be a from would quarter, it to inappropriate buying offsetting the half maturity $XX when we market $XXX

my remarks, times. once a successfully company through several we in have the again the deliver management will continue tenured over confident team mentioned ability have has demonstrated and to I many strong challenging I’m long they opening results. that last experienced managed As this and They months,

We markets intact. end remain our long-term fundamental strengths of also believe the

ability questions. We joining to with the to happy remain We the I’d us our That and we’ll remarks. succeed. have help customers And to our that, the your this very the concludes future thank confident take over our people, prepared and for value products you about long-term. create morning, services like be to shareholder the and

proceed comes with with Suisse. question. from Chris Parkinson line Credit [Operator of Please Instructions] Our your question first the

Thank you.

through seem cost and you leveraging guessing of amount a some refining U.S. primarily in different moving pretty you’ve I’m wish have solid as results, margin base. – it’s what few but a Consumer. especially testament the to So, your to I been variables, volumes system the just

you from you’ve learned us the often XX% your of XX% further on Valspar annualized about update thoughts platform what this target to time Consumer you. a spoken Can on in this Brands long-term about COVID-XX Thank environment? You’ve margins in level acquisition. and

with Hey, Chris, making well. Yes, within the Brand. progress this I is doing Al pleased we’re you’re Mistysyn. Hope we’re operating margin think Consumer on

of soon think come too I it’s our you’re margin long-term XX% off that range. to right; target

the businesses. the biggest absolutely all driver seeing As our volume majority of leverage always talked surge single about, the we’ve DIY with is channels, across in we’re driving of And across unprecedented all is the that the and expect normalized is more expect, that absolutely would being cost the taking will year said, demand to That North progresses. you place And control good there improvement. margin we return America. levels as in

the gross the our in took As business improve you ACE international our commented margin, what We and we’ve last recall, action, reduce our year. before, remarks, we those as we to And on talked exited that. his been taken around to also margin. helped costs John of about businesses. footprint action operating up We’ve performance expect. businesses That haven’t our opening

we cost operations job I think things; a more to with talked team those rationalizations efficient, our even make backwards, in – and of quarter, flow in saw flow saw in still we nice our second first positive about sales a Asia SKU and European a nice similar actions, profit. and quarter reductions the then done through. on through we’re pricing improvement has where the Australia In variety even on we

So volume drive number that but first. are allowing always these of margins, factors is there’s to us a

One items. think last is, versus operating customers. would serving I of efficiently in we’re this more year just I Chris, add couple other And our a Yes. do year

that’s a a planning execution. supply terrific team and really to and think global tribute I chain job our better doing

customers; better. this chain think our our in optimizing We’re more efficient we’re I year serving supply

investing challenges everyone areas that to challenging with. like such dealing dealing team to and our COVID I’d a We’re might with filling and while out chain And I this COVID customers our during XX/X that’s in global as to our team this win. throughout working just our help supply is the really time, this customers issue. of There’s serve lines doing CapEx call this, add, all

I chain. our optimizing little in supply So more being a we’re and effective utilizing think

really strategy. importance would the You COVID-XX we’re reinforced what me, and that’s learning. our asked about the of is And done say it’s also what environment for I

grow been serve. what’s the happening We And our all right what’s have example. each about customers focusing taking markets of I’d now, really helping the that customers bases. say you long value our by about asked we a We’ve approach our right, terrific DIY, shareholders our we’re for driving focused we’ve really But on take that great on this got I is value we’re the also our solutions. And And approach on that the a is on approach really on repaint. we residential where DIY. focus other focused in spoken think covering

way whichever right tilts, be there. want we table the to first-in-line So,

if one whatever So versus if repaint, it’s repaint to remodeling, we versus – new it’s there. res or DIY commercial commercial pops if up, segment new residential versus want it’s number be

second in Got you the it. is that XXXX. your does repaint what about views? greatly little as Can appear housing share bullish, just new of efforts you could urbanization? have would on talking a gains? both to And characterize into I which outlook And less a resi you but your on customers And versus question fronts, it intermediate Thank are That’s the be comments about your I and would protective potential accelerate very long-term if on just how more update them in helpful. sneak have you. us likely and emerging. the importantly to tailwinds that’s your comment probably some for appreciated. Any also non-resi based structural that playing for some that reverse general look half, second resi, just

that with company question, entire the covered yes. much Chris, pretty you Well, so

I apologize.

good. It’s love It’s it. No. good. We

you improvement the June driven turned exteriors do interior repaint. delaying been your there customers talked about. an would COVID-XX interior with work, it We the that is in We repaint, res return, to positive me we It’s that did very so largely expect. quarter. res the expect in the canceled, projects focus. the gradually. to related by hear as probably of about our It point we of uncommon To to area gains see share sequential have that’s Let start see albeit in

talking and new while more we’re than with right idea environment to to share about this. performance to really and accounts wallet. ever And of bring customers very quite been trying we’re solutions. And really we that pleased they solutions value. drive are demonstrate this our of we’ve We trying now the And believe customers add our and us And challenges our Complexity face, our uniquely is solutions this where an we before. are allow – a to customers if it they help think projects. look want make help when lot you them where needed, detail want do we dial a it’s time. and money. And They it’s I want where to our into more it, there’s our down, stores is quality – but are deliver. needed. that. where And they’re it to positioned they’re innovation at high it, our of needed, And are efficiently. I product our on products They want They you to believe

are everything the people can Our hire do to We keep they’re we knowledgeable. We trained, best. them.

those we’ve and turnover terrific in to delays with digits, us single And voluntary disruptions. there’s And really tremendously. stores we our regulations, relationships customers hard while is errors, with customers, them reps experiencing are or help they’re room emotions these or relationships built that make successful. no for just dealing Our room our work if no new for customers it’s these and so COVID and

distancing the than and around with as our slowing I started muted sequential would relates are may we workers contractors has to and on limits efficiency have residential commercial, work them its pace recovery, quarter, contractors. have to project more Projects to some of learning say I side. for in them and limitations many can be the how of the social a it our saw As would to second reopen improvement the say been

say As ground are the months that starts to I broken. XX after new commercial a might typically reminder is XX painted

it’s a are Billings was the Trend So I when their successfully. be – runway project this opportunity. bid of on problems. typically projects area XX, up learn remain It’s wise, see, don’t to to competitive we as These very a to May, are large terrific able threshold this. or improved in customers; these who little they the They’re here. the still that contractors you now particularly optimistic as it But And pretty – they’re is – run it’s sequentially. It’s new Index, our below projects. to XX they so these in teams But we’ve shows want say lean growing. again at and got would construction. look In about far delays XX. expansion Architectural June the that we

While why we’re and really, way both monitor. able think that an demonstrate in terrific the we I to our customers product And and metric it’s we really is do say specifications it are be last what working us that the special. challenged, that color. thing it’s in is And that’s of would we a for here area important to hard

good we the we we and why that. confidence very we gauge. looks folks to And all number requests by the monitor driven data we So of you talk pipeline number sheets of the do, actually us. and We get, color of get. about with information we it’s have When

feeling or about last ability our about feeling telling and us, our CapEx assets returned we’ve protect the about. I’d of it They’re of our these and will able into employees those about and position, year-over-year Protective marine projects, the about decorative people So side. the good delayed quarter. XX% good obviously corrosion deliver we’ve our over you companies back environments good impact them. oil customers sharply one that improvement industrial the during and fallen tied and talking of to – marine, as talked sales as The – seen we’re we’re that about? last and continue protective most But products not seen talking often or for are to feeling gas, Major we’re quarter. the what sequential say growth. to results. gas environment. require to I and are was around be our the well aren’t the really What the which protect corrosive and projects, control to oil that’s have and mean they we’re safety about very It’s

we’re opportunities. focused there’s penetration still grow, to So on continue to business that

on also the in gaining waste water, But areas rail of flooring, most ground we would and have these marine. like the very there. to some expect see we’re in oil we other we’re water, the focused XXXX We’re likely gaining what’s the expect weight that given protective growth while in and in beginning good gas, and meaningful other segments, we

much. very you Thank

Long answer, Chris. That so. was question, a long

I Thank appreciate it. you.

Thank you.

Our next your proceed Jeff from with JPMorgan. comes Please with question question. Zekauskas

the Thanks sold? goods much. volumes down of lower layers cost into dip did in in your very With inventory quarter, you cost

DIY, great that respect impact in you about, up kind on we’re of turns of related last raw lot keeping us we’re company, that. because a the – surge a the inventory we quickly, gallon and kind a suppliers raw as DIY of with Yes, churn specific this not that. our that of architectural and that in environment cans get. LIFO, materials first do this might with environment, out, other we especially just-in-time our talked The side meaningful see know, so a Jeff, you so of that we in, But to job it’s with on little bit materials the

raw on quickly very inventories our churning we’re materials. – it’s So

down the the flat XXX million that gross are really – the first profits points. it goods gross In of was your sold year-over-year? and $XXX quarter? like so business know happened was second quarter, I margin thing your and down, the sales your of don’t terms the year-over-year, margin have Brands what unusual or XX%. maybe What volume second gross quarter up what And are incremental even in in in up, your margin your in the basis versus maybe XX% XX% or is to about thing really is So cost gross happened you Consumer

our occurring of tailwind. I things number there’s a a Jeff, No, in give think second are that that quarter Right. us

segments. material In some that just our we Group quarter, about Coatings, You bring it year then growing you in change. growing with mix that about better our the there’s with the then say, up drag with about year-over-year you faster – that – was than DIY across the the I as you ACE of second see standpoint raw that’s our materials first respects, and likely growths, the exterior segment even And Brands comments, being the some a exiting you talked as business volume and a raw gives performing that paint region mix on we talked faster that Performance our the TAG quarter there see with We – about margin. and talk performs we quarter each opening trended customer product talked that than Performance you the through When question from did helps. than to know costs. other And previous then last really volume, talked And about with of that And repaint the about talked a got and Chris. change. lift. even on also we we Consumer different the interior, finally, our TAG non-paint. second res of lower helps. biggest segments. That talked about as kind gross expected John way would in different see in our better segment growths within than Group and I Coatings And mix our

line hard back, And would number us get happening. things done this for combination of I the of in both I see expect a really U.S., comes would PCG, the faster. volume to being even But areas over work for when a it’s the those say of example, improve to consumer those past with So businesses is of whatever year happens. outside

much. a very Great. margin. right. remarkable That’s Thank All you

Thanks Jeff.

Thank you.

with Our proceed Please comes Ghansham next with Baird. your Panjabi from question. question

Hi. everyone. Good morning,

morning, Ghansham. Good

Brands on the including of you of for Yes, sort plus as given quarter. the demand at sustained that just so more activity saw demand that the well? quarter, are level Consumer of company broadly how there the explosive just increase do-it-yourself some increase the do-it-yourself was growth, you inventory as XQ or the fatigue, throughout of thinking about and of pull level some at XX% demand forward level, And end well? in any first the TAG, second of clearly Was matching was replenishment purely is potentially a kind towards

just about talk I getting Is me you service the start what service? the you’re think correct retailers. at Well, let with is that to – when

Correct.

invited obviously. level unprecedented Well, we’ve obviously some here. been some challenge, an the seen And surge – has

have adapted would and challenges. some I surge significant, Our But decisively and say, the quickly. created teams Ghansham, it’s was

positioned, assets at think, every others not utilize that uniquely possible. We’re might would Sherwin-Williams you And pulling I tell we’re to have. I lever

But determined. believe doing global us, These team are environment, fourth We I’d begin still quarter, into focused by but I we’ll unprecedented they’re with that with times, to also chain inventory customers. again to the And come on also our building for we this we’re first We’re ability out would not meeting but quarter, the be this be a only quarter. again remiss position work as everything terrific the in effort the didn’t call our if right that But going say we’re out in now, of demand. third chasing. the customers. into supply I

up working the we come after. And And in the our to begin line out year talk skews we’re better. sit at customers, likely this what to to customers. really deliver of serve to that step need what our take care with better season. going put We’ll are new and the experience. next customers about our we we’re have So in end and is on of able this as inventory most them isolate we’ll levels a is important to of And with of and more we sight inventory if the to be

at And As are �� they’ve it more that relates by and And finding fatigue seems way. affordable is a coming it, never home, it’s project, to have and overlap I’m this repainting. a the of don’t have wall that and stores, in tackle in it tackle what that little they that’s painted, our our them. people are customers beauty And there was contractor impactful going really they some, our likely it’s from some that to customer, These more to that are about by it’s a find in. might very in. project that is support have customers DIY, getting are to is customers but their while looking very they’re it attitude COVID was I I’m probably often is, going what highly been are project. as talking bedroom customers that and little been painted, not I in and any customers for we a The sure have considered where customers we’re where you myself. be coming very referred as are they are wouldn’t the home mentioned it stores Reality think And a we it. time do realize from that been different painting to we’re

a can it’s It’s that easy. project. easy we it nice experience make stores, relatively to just partners so not an everything only that small stores. doing our we’re our through gain. through so to sales percentage. There’s And one be want through But retail XX% our We a it’s

fatigue? We went they with an seamlessly impactful do wonderful to working customers do Your a experience repeat question to they those to that have our want experience customers it we’re make forward. it’s more. customers make retail them going And so easy, capture and through want they is, and

we’re talked inventory everything that’s investment retrofit right sites capacity in and in just ability gallon of all which improve about up to product have predominantly filling the And industrial chasing process quality think to providing key the from in right the across make And expand stain finding demand. investing an pro to quickly exterior where John and we’re the to that the our chain number our an may process capital Ghansham, have doing channels. to try creative to solutions product remarks. that lines I line capacity of we to opening ramping I’d sure It’s in X a but and different it are has come up we’re rates quality make lines where lines the only supply add. not doing, with global gallon It’s as that

our just So investments capacity. we’re to looking areas inventory, it’s not all expand at in

at are our capacity are products. we’ve look you facilities that industrial now, those and and where for Yes, got wood right these example, highly assets, those producing for stain, technical

as the as product every finished good – on we side. the to So existing good bit every manufactured in consumer specs industrial tight is had the been if it because plant the operate

get. you So really utilizations can it’s best of the asset

recurrence some in like directional of seen of anticipate to you and Okay. Texas? U.S., open? have question, to any for so to given second in southern Thanks then you my make COVID being specific demands sales states Florida floors just do much. your the the having the shifts And And adjustments states

would at safety We our employees. our love sales sales those to tell number this floors that employees time adjust of you open, I don’t the but and is customers floors. anticipate having our one

we’ll So close it. to stay

not. business it take I’m And southern do states? it As say, and moving asking we they wherever the of we’ll sure are. customers right to serve now, were, everything about we’ll If anywhere you were I it can market of starts comes. if not the would you that those aggressively, it’s we’ve to shift in If

Got it. Thanks so much.

you, Ghansham. Thank

Thank you.

your question. comes question Please proceed Bob Sachs. next with from Koort Goldman Our with

you. Thank morning. Good

Bob. morning, Good

China. I wanted to ask about

of One quarter. before of even think on the competitors, your side deco end the back than about an they big and got business to were the by where larger talked I about getting you there, trends they’ve

that a there you So help how response. sooner market I you make DIY your about was there do-it-for-me or the see are the lockdown that maybe you in China? would routes wondering, your of prospects that cities is business would or trends what it serve, and hope to given different versus can to the Maybe we particular the the sort characterize us in sooner there pro ending something anything

of business relatively the in significantly sales of very, architectural pandemic Well, architectural. down that’s China. there’s the were the I Asia second slower approach again, business in it’s of quarter business. But saw COVID typically largely that piece our it’s in We a take as small any in really We a think But business. that first there. that very that the off there in percentage small recovery our very a result little a would if is DIY

the We’re at there looking really future.

– right that doing We’re investing aspects so. a in a right a gotten lot going the on, branding we’re people, going of our doing research. couple work, business, of lot got right of have with of little now been on We’ve that’s cloudy the everything really a different good tests on

bigger that from or to of you be be going even a down business material next next year. going I expect think don’t the perspective part that’s should in be I the our think it’s road, anything quarter the

you. Got

through on of you of commercial you and construction-related activity you and the ask the gets into markets the all Obviously, you kind me broadly. but just the a given strong business activity? into coil some for What there that out some have stores angst second there? do there backlog see work as through where half then as the finally from do Is group. recovery sort other got and path-forward we commercial of aren’t Let issues the home that there of W see commercial XXXX construction you’re some your get going

our quarter. so coil. the through positive resumption business, it improvement say June we sequential I in that point, your and I that select to to during that of would June. would are in so coil commercial business drove And through close Well, the much business our projects, finished TAG we through say the

sure call we’re pothole. call mean Not the minimize or I be will we’re it it working there’s We moving hard Bob, in now going direction. right right pocket What we gap, or an really if a a it when see happen. air I it impact. doing, So does that any if momentum to happen –

here. down road the driving We’re

beauty fill that. the We’re pothole. direct can we that model, can our to And the of that doing everything is control model, we

we’re customers where so working to with And projects those our understand are.

not place to an go an order place for we’re customers or So online waiting order. call and to

the We’re attacking know this. specifications. We

We We’re the coming that projects. more We those we’re we on down might capitalizing that projects. the commercial we’re trying are whatever get and know be offer specified. products And to road. on to offset know strategy, leveraging the painting our segments contractors those

rest one’s So I’d just no that assured, we’re are positioned a and we to capitalize say not retailer door people waits for these like opens come to a opportunities. in. on simply But

there be in right there the know out a hole that road. now We’re might We hunting.

We’re not waiting.

think much But say I what fill if we or one, one. we’ll aggressively will find is, Depending be a We’re looks there short-lived. this, it going out on would it. like there’s after do it it to how we gap and if not we experience experience if

the Thanks for help. Terrific.

Bob. Thanks,

you. Thank

comes from of America. question. your question next with Our Byrne Bank with Steve Please proceed

Thank Yes. you.

sales aggressive on talking I one were there So, you folks just Americas and out the are force to Group of there within John, The motivate the hunting, your there recalled be ways part and about out you that slowdown hunt a to their effort, of also there was while is in And that is? a incentivizes lower does was remind reasonably it it when comp what Can large me of goods portion you contribute sales? variable. cost

what a a And who executives morning, mechanism, they’re There’s than I’m our this of we XX/XX. in That’s win. of this out to me, provide Pride for motivated we by say, incentive why to I’d expect them wanting leading this mentioned not our our about more like And employees cost driven really we to everyone, going with do want a have say, But don’t at – all. are, be really, look I at in are really by as a best. here saving Steve, was do. far And We we’re would them. we to keyword Its lot want We reps, we our a it’s that I’d a incentives, there. we I’d speaking them to want there. right pride good say, plans. want right one goats. I bit. we to families. now, in of team and what’s there win. call pride. people right in an stop do, what the pride win. little pride And that. are we to by for sense their to of There’s element These doing But win there’s

What all think you back of the decline the store goods portion closures. raw little of key Can please? And lower had Can that also lay cost? bit, was some a so And that just that what material contributor? TAG you significant. was out cost so break there? just you that getting out? to a I drivers Was were in

take stores, the Why talk the I’ll I for a to don’t Yes. Al there second. about rest ask and then

this versus last stores last what year-over-year, in year. year have So XX year, we we more laid given

versus last We more this year. reps year have XXX

year, XX point the were the closed would markets. North to relocate. in were the in We with America. closure new by way XX these America, XX opened we’ve those XX That’s And closures XXX persistently Latin the that our offset that expect forward. Canada going down to XXX America. For those. nine new underperforming underperforming. originally lease to did to year, North in that into But up stores And mainly to Steve, from due America should North characterize back you the were ramp in that XX do this America XX planned were America to in were some soft us stores of we’ll about stores. plan North nine of to COVID. were open stores the Latin in The stores we I’d have I stores way expirations in expect that’s

versus talked improvement. And with performed drive and their and about earlier, non-paint product mix margin segments, the starting interior TAG, the repaint Steve, better than exterior other I res versus that DIY and customer paint the helped

pivoting On reducing even discretionary increase material inflationary effectiveness X% to spending, job its I margin X% those and that cutting items, expected operating wages, like, It’s in a we’ve higher. last moderating. thing, the is really as our was We And the healthcare, SG&A of price a rapidly, ROS team the on offset around still side, is, year-over-year, helped really then but helping say businesses, out it’s the and very nice it and to X%. performing an drive with down and our is all travel and would so did architectural about of raw price increase other that pricing. whether impact went talked less

Thank you.

Thank you.

comes proceed with question David question. next Please Bank. Our from Begleiter with your Deutsche

thinking margins the John should given morning. Good we just looking margins you. how and here? QX, TAG, volumes ROS what or you’re seeing looking Thank about on and quarter-over-quarter the in at be year-over-year either Al, incremental at

had segments. One going not individual a TAG David, America a we’re third give you up little up we’re you in North a data is, I look guidance I’ll a year. going on those quarter help – at strong against you give points out. strong to mean of last couple of sales They hopefully couple over But were Yes, X%. sales. leverage in Same-store to operating on

And so we’re pretty going to tough go up against quarter. a

the is going back and better as business, going start in we that investing to to merchandising the into John we to talked see We’re paused about, expect third advertising volume. also but come our quarter,

to talked X.X%, and were down we can sales for in quarter, about, talked chain, the about, we the And our second as to better right the quarter volumes we put up flat North get. the third in sales better now America through our stores we leverage forecast low-single-digits. be the As same-store

expect still the kind last product range, will our sequential sequential If And to we we not, to of margin then, depend and expect quarter, where ROS end see whether this it’s at year see get going unfolded in to mix through higher improvement. the year-over-year, of some a shot have year-over-year, I the and comes into If at the way that have year improvement. modest it’s there. volume do I difficult So, in. on improvement third be getting benefit get

helpful, Appreciate decline? the year? back expectation TiOX, seeing for on Al, ROS, your lastly, just are very you half of that. where specifically, That’s And materials what’s And on the raw pricing in Al.

as our improvement. the we our heavily We expect positive we on it’s of the mentioned benefit be the year-over-year because and I’ll in to Yes. tougher down expect second basket side. the one. was probably can ROS benefit comparisons David, – little the overall, margin see by provide first industrial be a half by we year. the that’s driven and specific than What quarter half. half still there really we’re we trend forward, down dollars moment the material will If year-over-year. quarter, that see quarter, second – And mid-single-digit don’t the solvents, ago, gross our a of a second and in towards the industry little basket do weighted the reflected but take be business going We mid-single-digits our will at saw architectural more outlook our that of that will going look kind was year-over-year in than more biggest Al see of in really part and will to resins by similar percentage you second that the raw

on full – we’re that’s year, single. said ROS for down to year, So earlier would it compared the the this down expectation mid-single-digits low we our to and be going or be that’s

we’re seeing good solvents. So by some and resins there benefit again driven

ethylene the look you say If would propylene and tick up of little contracts of a side petrochem More recently forward. a propylene in I the out at we’ve the we’re goes though as year sequential how pricing. plays that is seeing bit year-over-year see basket, and we’ll what lower ethylene and seen

back TiOX we’re the of half. the pricing in the On trends anticipating side still stable basket,

of indications stable TiOX haven’t buy sulfate movement chloride-based you most market we the say really TiOX our of TiOX has by demand. sustained third-party would the the than look DIY some is which of But seen seen resiliency internationally. lower the of Some been and reflecting that at forecast TiOX, little are bit some know, prior North a there. as we the American more economic have we forecasts, the majority I pricing

back basket led the going sum up, to again, the by that So ROS of kind on we’re the down mid-single-digits solvent and similar to resins piece. in – half,

Thank you much. very

you. Thank

from Stanley. of of line Vincent question. Please proceed Our your with comes question Andrews Morgan next the

retail morning, we’re price ahead packaging channels? DIY into with pricing are you into something get and the year. tight something on into you’re of starting the Is a on there to need back Maybe Is sources half paint good that’s packaging, get of the and paint this DIY next potentially year Thanks that of some that and anticipating? variety that increases everyone. hearing to about from concerns

we’ll increase there demand, be And an do is in our an not is second supply manage a it as Vince, first for as if seen do, at increase or second needed We share always very as in on remains costs it try if packaging expect decide working this environment, we to to that far and with unprecedented look we a like second price but the packaging. increase, we’re closely not unfolds the price we’ll half the half. in our on but our are an Yes. expecting half increase and with based them. we’re in increase gap current stressing in suppliers

sell? buy environment, just through your very anything to a And there in environment the talk good. directions. then, both you’ve about more the on COVID getting the that could portfolio And you active bit gone in the little Okay, looking Is maybe might pipeline M&A side? is be again you as

times active. appreciate of and be say, Sewell I’d COVID midst good opportunities. we will, looking of got we’re use sides, to margin aggressively. our make and where teams just Young, or seems There that the those number looking the really, their taking bit and team wide out and and engaged in and to this, of I’d if both always the Head Strategy, gap, Bryan leadership sales our people not through true we I a we’re working be that discussions are we’ve That’s of that, continue leadership way we’re and narrowing place. David staying here hoping like really are our to a projects really to you lose of there course on a us for strategy. opportunities and can for with sure we’re move our In to are say the in pretty the very Well, deliberate we’re that of strategy working that stay are

take our in that brands, it programs side, fit should discipline if take I say fall reviewing On programs, or your stores, do the that that not that fits, businesses do create that. threshold that other products, these we think that to short products we’ve continued are point, I’d And have, When action. of the expect shareholder SKUs, company, we’ll demonstrated not and action. value, businesses, to we continue we to be we’ve same that you of everything,

very Thanks much.

our But we public. and teams businesses to that the take talk we’ll before

it. you Appreciate Thank much. very

ISI. from comes question your Greg Melich next with The you. Thank Evercore question. with Please proceed

had of gross on e-commerce two second then, the on the one is Hi. you’ve Thanks. I there. follow-ups: is gotten some and margins; and the learnings

the materials that’s it the margins, gross mix margins sounds be XXX was First less like on starts some all if gross to it the heard far? reason half too I second roughly because not mix, I is few per it correctly, you the in split price pieced bps the se, in expansion that last that been the but price this gap increase, raw could taking be of rest normalize. the between the Am months of extreme have and and the up raw together might material year-over-year versus

No. I wouldn’t.

think you’re accurate. directionally I

big kind there. mix, quarter. second as of what, way estimate but know X% to of product The you a the a impact, and of you saw little DIY third tailwind gauge the third an in mix the between the right bit you’re if see wouldn’t is, raw and I would I at materials expect think DIY customer in that quarter, we our second not you look the together a guess, is quarters Greg, directionally the second quarter. tailwind, product trends in in I below so I the

Got it.

bps was another is of XXX the XXX bps quarter? mix, in point it of mix of the probably to little X second a So, think than way more

correct. approximately That’s

on in you how prepared platform I well. Yes. the And the e-commerce, then, mentioned John, think remarks, did

on of with could they pros they loyalty people engaged use in how many or to on started lot and or whether sort give numbers and contractors the can how growth? us conversion terms all Any the there’s to I how curbside customers, be used you of to quarter last metrics think to DIY’ers hands are deck. and that us it you platform, that drive I of gave a it some of know number see help

maybe Yes. way, I’d it this characterize Greg.

customers track. certainly in products, The in – idea all platform also communicating and Our we are only metrics growing now more of managers, our on learning well we are DIY it and pretty their number and in with reps their people. contractors simple, that is strong witnessing allows ordering customers is this as as want enjoy. build These that increased store relationship we we a here to rely not categories utilization to efficiency on incredible but

those their On extra contractors the and team, you people. tell professional step part that managers store side, are these team, helping and our of of reps contractor’s through customers the those would an this our in part they’re is

tell side We customers we that. one on lot much think our more projects. I right complexity of like is money, it we delays platform efficient we wider absorb the ask profitable and part might make ask would a easier, got the made they’re and last and earlier, just you is So, inability team. professional the that want as I helping efficiently increasing. questions and to of most our much run and mile we team getting loyalty they’re part who more the facing and that the describe feeling that that and of run this the gap challenges that I helps And to absolutely contractor and now the we’re important talked their is see you I and about enjoy

on As we experienced of have the this DIY clearly it platform the side. new using number a to relates DIY side, customers

Our and scores it’s dramatically well. there working going quite are up

for believe opportunity we differentiation. great because heavily, is this here another investing We’re

or side As with on a more is take pro the up percentage that DIY? customers, of

Pro side.

luck. Good Thanks.

Thank you.

Roberts Our next with your UBS. with question proceed Please comes question. from John

indicated RPM repaint who a inner brought residential in DIY number didn’t was you. driven. people that before. the out themselves maybe pro in versus as of thought Thank think DIY’er demographics quarantining has of I DIY’er mostly

structurally do bit up out go we that’s we year or if a of do normalize there we think you from from a think kind XX now months you So, here? shift little or now,

normalize. we think I

aging the if and and to compare past housing these what’s the huge aging price we times. in an historically, last happened what it your shifts we’ve consideration you protracted. temporarily seen to demographic, look not home amounts grew, into starts. the John, also In during wasn’t think appreciation, take I unique But DIY is point, but have recession to

shifts this we time earlier, think our overall, So, share didn’t mentioned I us impactful, and more going maybe there that with that earlier, of But the I people to it you difference. shared we this affordable, times are have we’ve I quite some can as XXXX. and – make telling out occur XXXX, And going June it’s in seen the while they listening frankly, these reason bids every a during it’s confidence, stat say expect another forward. are res in of comments The that had June I they repaint. in we it about than they’re customers, home,

So we’re feeling pretty good about trend. the

Thank Okay. you.

you. Thank

Barclays. with the Our Fischer Please Duffy line next your comes proceed question. question from with of

Good morning. Yes.

big your a in, you bit, wanted market Lowe’s on year three to talked you from quite the big obviously or help – dig you are cylinders But them be takes where to up get system I this of hitting side. to think sell this you’re little where do that on is all cruising weren’t a guess? altitude and how that year the last like you you able and – where bang-up you just endpoint, reps year kind operationally, now macro never long the is year, wanted set but congrats for go and there had of a I to quarter. switchover now First, to to get in kind

Yes.

we finish is Duffy. anything that There right. You’re in no do, line

a us. and his giving the McFarland, opportunity team Bill They’re there’s leaders. to work of Boltz teams So, our want Lowe’s, wonderful them. that. characterize And Joe we help and Marvin and teams, these and ahead we of at I that believe allowing they’re lot like driving their are us way you improvement for access, to with they’re

do We’re and there’s that. more on a I runway and that together, we’re forward lot looking it. we can we’re down a screaming But to think

projects, like work side, for two prefers lot. are And I with they they these that home experience, different pro they typically, them do that of also center can as home that’s DIY a They the reasons, a but that remodeler, and experience the center together might wonderful the might product a two both pick that paint choices. professional that call professional part we we as paints. the be up doing be organizations and prefer think a

them to forward part ability more our be and so important an help of look And is we to our successful strategy that.

be a done. there’s more lot to So

your new sum capacity with you $XXX get which guys CapEx Great. is new plants million, that versus you it that to mentioned back by extra million? bring Is need is large a half what online, the that And in very that you or is you’re historic that then, – we CapEx. $XXX increasing what for

Duffy, and quarter call, first capacity I our in on the really as talked these of was architectural some Yes, reduction packaging CapEx expansions. pausing

the they million months – trends to is we expansion second because through could X.X% a good about restarted takes to just the an XX saw come sales. sizable months of sales to which our $XXX in still we get CapEx quarter, expansion those expansion of plans, As and take up that XX place

as few long I do those X%, the back years control think to we and – to and below pretty capacity to we’ve that. over much as done CapEx we’re that that up. start we’ll we’re continue So, last going need the projects trying But

guys. Thanks, Perfect.

you. Thank

comes Our proceed with the Patterson from Truman next question line Wells question. of with Fargo. your Please

Hi. quarter. great Good afternoon, guys, a and

whether I’m we’re a really not to just seeing resi whether not your flare-up, second First, said get I that having us. follow of flat. impacts are wanted that wave Could give or or repaint you really an repaint back impacted to COVID side for understand areas got interior the prior in update and forward believe on trying another on business contractor interior that the question, contractor, to July? just up June in you

get into to want that too detail much know don’t I we Yes. here.

you more more some rural say a usual business that I’d in more as me in maybe Let would there’s areas. give as areas describe insight. metro I it likely just than

the tell earlier bidding contractor penetrating but they’re customers that and side, they’re more that not a the just still lot doing, mentioned on I And bids people that they’re home really experiencing of exterior. it’s I both the the because in interior, exterior feeling are good bids would We have spotty. you interior doing for

it’s and and feeling So, customers in a but are good, starting come going to it’s time think a just just to going roll our don’t light it’s that’s I online. matter I switch think back be of

leading resi to recovery resi clubhouse. be and strong the also of the add property commercial while Truman we but the I’d of be that performer as are repaint repaint res resi and is continues maintenance and leaders to in sort sort new DIY to continue the ones that a are What just the continue that, Okay. the improving, to said, and be

Okay.

Thanks margin. then, on Okay. And for that. question next gross

are in You XX% quarter. all the second at already

Just gross hoping on you your targets, them. I up margin can end of long-term bumping we’re think high give some because towards updated thoughts the

we’ll XX%. about to is see back then, the positive trends at get target we’re time, that more We’ll this Yes. continue you I gross mix, normalized quarter, this mix, how we some margin up. the look and that in surge customer target point. demand to we that to get think think to product through we’re – I go and adjusting expect say do we out – we we’re got to Performance term. to think would the move our seeing know, Truman, should say we’ve comes don’t I at long-term over but shorter to ready at And talked as say ready the recovery that, these Coatings trends but before through XX% being long-term levels. to The our

through and really done we’ve ready but again, and raise efficient, out to chain volume that not a different divisions work more complexity pick to I’m those off drive our our to pay segments, when of start of lot just be supply will think demand regions our through just yet. and and up I target different

you. Thank Okay.

Thank you.

question. of question Arun, Capital the next Arun with your Please Viswanathan comes proceed Our line your from with Markets. line is RBC live.

questions. your may proceed You with

hear guess on me now? I Yes. that. Can guidance. morning. about you for just the first Apologies Good question is Sorry that. my

maybe So, upper the maybe details in tail Thanks. just performance charges, be and it some on consumer? that I of guess, Yeah. recovery the upper can or I kind the it of to amortization guess now, kind just midpoint excluding $XX.XX be factors that a maybe swifter the you the range. of Would provide of guidance. maybe could you maybe would end the Maybe longer being drive a out maybe some lay on end of

fourth through Arun, it up starts earlier, going Yes. volumes organization. drives We, as we in we range. ourselves of more those tougher the against and sales quarter up GI like of but the if at I I tougher a as the the see third TAG end end well. a think DIY refinish volume, I think the get GI, rephrase wood, where sequentially think But quicker, we expect pick let TAG surge the it’s wood the about of with refinish, yes, industrial volume. do of middle, we mentioned pick get which that, our it, quarter, faster, lot in industrial probably end auto recovery, longer the nice operating the that scale can And farther on of back then, whether scale a quarter, leverage expect, mentioned there. Performance on you those second to if longer John And leverage some up auto to than that continues high again, trends a we are our operating Group, of – if are that the me of talked Coatings

your give So, it you maybe just us maybe it’s mostly on business. can guess perspective And like just sounds I longer-term, then, your thinking volume-driven.

You that’s we’re And think do-it-for-me several now thinking longer DIY. over A, bit of a the guess, your B, term. back a how the little and shift you’re last I’m paint to years business do I about benefited you then, quite heavily seeing stores from shift structural? to curious

the that rate, increase like now X.X X You’re you’re to to in times maybe market X to X it poised often market seems times grown or the rate.

thinking So, about issues if Thanks. see I I’m that two guess those maybe stress just way. the correct and

stores, think just our I started. we’re getting On Yes.

in wonderful well in I talk executing to that’s to where we’re think we’re we’re of of and you the excited about and team there’s going, a got lot a lot excited we’ve the that about there’s opportunity good pipeline a and really things future.

We every on new there the sold to shifts solution. we’ve is the providing our think a seen we it those Regarding applied. based teams to focused care how pension on fundamentals, We a wealth the as that’s field, There or but do-it-for-me, have I it income, a market be shift that’s be this relatively it be quite of doing painted and are aging remodel gallon that every values room on home it – And that of an it’s do-it-for-me, do-it-yourself home. don’t quite before. gradually room. population, just back, on, we about square we want movie earlier, impact quality and And are it do-it-yourself, that inexpensive is impactful it’s the sure of life, of we or a could the focus be frankly, when it’s benefit one want to – all could enjoy mentioned and and enjoy dual just the life do-it-yourselfer be frankly just experience. home, created, not that the and versus could talked a or but general improving. product newly a We and corner make people themselves, them going and or

Okay. Good on the Thanks. luck quarter.

Thank you.

question. your Please Our with of Eric next proceed comes line from Petrie question with the Citi.

morning Juvekar. afternoon. is good Good P.J. Hi. Yes. or This

across DIY. all boxes. partner what share. wondering couple feel to if quick Just of ones I this retail DIY gained your big prices was there on gained did you you happened share year? and you and Do well

early a to not I share. it’s we’ve little satisfied tell and if I’d disappointed gained you think be we’re you’d think tell if were. I in us we

we’re our or There’s of partners to able what? working share. a So, not. was gaining we’re I’m we and with question, lot retail to want be second share capture still if to opportunity improve regardless of still work that your sorry, to

pricing the paint pricing? on side, the On retail

Yes.

commenting answer I think customers us from on. that’s a our better than themselves coming

just to Thank app strategy one you more then, get trying some DIY. through or in Are there? DIY digital there customers your and stores And Okay. you. any on progress your

for to and they percentage mentioned our XX% what ours. been stores stores. our it’s decision, our of they’re I specialty focus a going we’re that there you’ve relatively and that how about out gain that it’s hope store of choose us of and mainly prefer you’ve seen percentage store if and make is earlier, think that’s are business, there’s that modeled do, business to But as experience, Yes. we’d a there that know in I and that Again, large we customers so the a small contractor

you Thank great. Okay, much. so

you. Thank

Our with next Please from question your proceed Capital John BMO question. with comes McNulty Markets.

Yes. Thanks for my taking question.

year stronger you the maybe bit How more Normally I a than half front quick your back end always me, be a years flows. where be the of much the a least quarter, and cash assuming that? Just we few in excuse on one last or second guess strength more a that still wonky saw see given in little quarter a about of tend about bit to free normal? half. cash we or has half kind is in – XX% little the second should of that is you at the should thinking it your

certainly account. kind not DIY, stores, think they’re of in right. you’re absolutely through Yes. John, I on our wonky strength with a year It’s going

is working in first half. our Our lower capital

and start in is that into drag But guidance. a far product we’re mix still to see build As tougher to profitability the just the concerned. customer comp be positive little our and aren’t in because of talked on first John our big quite an half our a going second when be but cash quarter the going going the little going improvement not cash of should of and and building the of talked a as we’re that as you bit third our some bit as and coming headwind we you a positive. that’s fourth second things of year-over-year, full It at second of half look then, I half, And half. to saw in in a inventory about quarter about, be inventory out our earlier, year will the

Thanks very color. it. Got for the much

Thank you.

comes Vertical of question. Our line question with the McCarthy Kevin Research proceed with from Partners. next your Please

and would observed recent rapidly grow – be can to Good you’ve all. I I’m afternoon. for at to ask aluminum to Wanted you think we’ve it business? In pace. if in can problem perhaps you shortages a that are there your you hearing it enough about packaging Yes. business, about and there the high-class out problem But continue a it’s mentioned whether grew as a weeks, cans curious to at coatings been high-single-digit

the us we strongest point, To plenty beverage our There is remains mentioned opportunity cans have performer robust. high-single-digits. of for food This sales I is the to grow. your that in business. and up demand for industrial

are to in efficiently flexibility, application, our customers, our the because that the and a and new the of technology of new coating We the customers plans unique more terrific do that. continues lines, running ease through have be and VXX to convert speed, win to able it’s

So, customers to another great this we’re grow, technology, a leadership, with putting tank. and of expect great wonderful business area to yes, continue in lot this we it’s fuel

through Good you evolve? wanted the swing to might sale smaller Just continue this on base, get to become grow margins how that And margin or lower sense then rapidly e-commerce. moving to through a today to secondly, And higher, similar in follow if a could as up same forward? a from channel? and trying hear. analysis to Are your when the channel factor e-commerce for meaningful a traditional

Kevin, I basically the think margins. same you should model as in

Easy enough. much. Thank so you

you. Thank

next of line Please proceed comes Garik Loop the question. Our Shmois question your with from Capital. with

Hey. This Garik. you? on are is for Jeff Stevenson How

Jeff. Hey,

auto on first improvement have the miles refinish the Hey. lockdowns are as transit? mass shift driven just Are outlook a maybe business. and seeing from away improved, you eased, any was question for My even

about the saw right the the a quarter normal that this couple benefit and we’ve our as this and sequentially that help but see to of routines at obviously, and continue. and technology you the We will expect and last XX in the of it’s Again, business moving with us significantly. last here it do We spoke to we’ve of is play business the performance improvement. when the more would This look what driven business. the miles given unfolded over we done direction, drivers, calls this congestion traffic travel business months, resumption in XX

you then, in residential, are But the accelerate? starts an any to two, what Okay, great. seeing new as improvement you June. problem And sequential we at labor start mentioned in look housing to back the acceleration seeing you half, And seeing? builders then, are with contractor as similar are

labor of willing people receiving. contractor you unemployment to commercial, I’ve work, contractors for issues, have that in number and to new rate. residential, spoken given mentioned them some that the wouldn’t think that not the experiencing are only repaint with that who they’re rates are We res even But qualified people, given a difficult it’s find unemployment

across it see trend, I of So, an because talked our do of issue. We’ve we our homebuilders. builder, regional would homebuilders that position first, been the the fantastic. is We’ve national – and account the builders builders. top in the our relationships stores it, very our in the national just our of all there about in account say national a about take your to terrific the largely we’ve let exclusive national platform, in outside U.S. market. business is in total the XX question and a making activity say detour position many of And penetration business, me just good having got XX slight

ever. partnership differentiation really on with our and us June builder, best them are and we’re to their this of – we many month That clearly the drive really have said builders. said, They our others. was platform So leveraging trying experiencing are the back between enjoying

that bodes And we the the believe so, quarter well future. for

them we’re The some in the is an with of builders to offer categories. I that hearing close doing we both other And in what look point you differentiation the Many visit become from doing pronounced asked have services us Cleveland disruptions that of reference think inventory, we’re come to lever. position, of suppliers some to have that we’re other to our provide, to the it’s more at challenges that I and it. understand and our how continue important other here that when ability had given as would builders they make reps our them

serve For impact homebuilders and us, across it’s on doesn’t terrific us business, allows an it us, it’s it’s to to easy can well X execute it these like them serve do-it-yourself one bucket, the have for business, gallon else country we national the no can. so

great on congrats Thanks the and quarter.

Thank you.

Research. from final of Eric with Please Cleveland your question. Our with Bosshard proceed line question come will the

you. Thank

terms it, interior about briefly of that you XQ? Thank in more I side. about looking And you business, interior/exterior know indicated bullish know mix total. remind that’s if of of business and but are the In the the on just in the curious interior? stores are of interior the terms also John, talked at contractors But the I by terms curious momentum that the what you. within XQ, trends in could then, XQ, you us on

on reiterate point might trends, year the percentage with activity last let that to my our this again, we’re I back in bidding the a comments customers, point more – now to Eric versus fact think So, experiencing think the there interior. the in I were June, me bids year including I that growing

customers these be those the is many contractors they’re by pros. get this good line. home, these the tools in it’s excellent interested projects I’m color feeling customers There which having expectation if homes we’re almost interior getting that exterior be with to same someone’s recognizing specific is in that virtual them the – truthful these trying are homes it. painted. give but to afternoon an some is, And for of not place are our fact the our you, our about allows of that pretty in numbers customers are Their going customers be their you into their and are tackle wanting season out So, a to that that, going it enjoy sense to is exterior line turning be in with enjoying to The opportunity they’re without they’re or but getting estimate. painted because to using

And the Eric, quarter, X:X. on and first quarter, interior-to-exterior the about out-quarters, fourth ratio it’s

it’s get second that a middle in these trends to As trend you as quarters it and the little through a probably X:X, Eastern, the less the and the normal into that quarters, than improves because third in we’re next environment, two weather Midwest seeing. of

Okay. That’s helpful. Thank you.

Thank you.

reached of session. have the end our question-and-answer We

for the like over So, additional pass comments. any I’d to floor Jaye back closing to Mr.

you, Thank for joining everybody, thanks, call us and the today. Yes. on Jessie,

to to soon. Tuesday, coming us be will out We September available your you Financial be on hope of Just we’ll that. week registration Presentation join you’ll week. questions Look details myself like hosting be Community one always, able that Swanson that and for for next virtual be on Eric so will I’d follow-up the this rest And into tell reminder, that. and our XX, for as

so you and thank much. a stay Have great day So, safe.

at Ladies and thank may you and We today’s does your gentlemen, for this teleconference. you conclude participation disconnect your lines this time.