The Sherwin-Williams Company (SHW) 27 Oct 202020 Q3 Earnings call transcript

Good morning. Thank you for joining The Sherwin-Williams Company’s Review of Third Quarter 2020 Results and our Outlook for the Fourth 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 www.sherwin.com beginning approximately two hours after this conference call concludes. include statements, will the defined call U.S. conference certain as forward-looking under This with earnings to securities respect federal laws, sales, and matters. other statement statements revise or forward-looking whether on company speaks as no is information, such undertakes of the made of to any a forward-looking Any future obligation and events result the otherwise. only as which update date new statement, or transmitted statements A provided in release regarding earnings forward-looking is earlier declaration morning. full company’s this the questions. to we will open the After prepared session company’s remarks, the I call will the Jaye. now to Jim turn over

Rob, and your you, the and good Thank hope morning, you families healthy everyone. and pandemic. safe I are remaining during

in in during me comparisons share third consolidated momentum company improvement were high-level across net saw are margin above end very Let new XXXX, XX, quarter. summary well All third sales original guidance guidance slightly also above the July the the results profit quarter operating gross provided on of positive quarter. continued increased Sherwin-Williams and some September in EBITDA, record we double-digit We net tax delivered residential diluted we markets. solid before demand the DIY and with repaint, the to our unprecedented and our stated. provided unless Total comments begin per otherwise XX. residential the on outstanding on growth in quarter, in We demand income year-over-year business cash. industrial and delivered

on Diluted income to tax $X.XX sales X.X% increased inclusive points The to currency increased to per basis share share. quarter Consolidated a was $XXX.X to impact of $XXX.X billion, $X.XX estimated increased quarter per not before in XXXX XX.X% XX.X% consolidated sales margin consolidated profit COVID-XX gross Third XXX Consolidated X.X%. increased million or net-net million. XX.X%. impact of the material. from negative

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

our press reconciliation amortization quarter in release. $X.XX described as other Regulation expense the G included adjustments third and table The in of XXXX acquisition-related of included share, per

million line Group sales of billion, Consumer year growth, from lower product guidance, Excluding in margin. to these cash $X.XX earnings and in favorable operating by the Group to perspective, sales, leverage in XX.X% From XX.X% $X.XX to mix, in segment sales, to Consumer Coatings margin improve than of share. lower diluted improved double-digit flow-through topline increased our driven in items, to XX.X% the resulting and increased Brands margin operating segment input increased costs. over operating Group in Adjusted strong to the on increased sales, segment sales. billion. expected. operating the Performance Adjusted resulting costs, $X.XX XX.X% per updated were on actions third margin and sales of while taken were Group XX% growth, increased in share the leverage or sales from returning favorable topline quarter mix, adjusted segment a Group to delivered costs. of $XXX.X growth input year-to-date Coatings our input very per past EBITDA Performance slightly Adjusted Brands international Segment with Group the and better Americas Americas All quarter. Net strong lower XX.X%

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

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

everyone. and good morning Jim you, Thank

proud XX,XXX by incredible not as of continued over be expressing to environment. my their more results team resilience. their begin Sherwin-Williams appreciation employees me I the they challenging this for delivered and very record in Let determination could a of

driven very entire true many year, what input increased in SG&A improvement industry throughout The pricing, to measures, was serving of a to customers as of saw this in experience we XX.X%. years been level. decreased differentiators collective Our our make across a the in by materials by than bit while We drive investments at continue mid-single-digit leadership team dollar and quarter. to us a raw their enabling many have the significant less the percent in improving basis to end drive sales expansion percentage growth. with growth the of The the mix, quarter, sequentially. segments July and year-over-year prior second in original of sales at we gross generated costs. provided three was very the though year-over-year, quarter as down operating favorable basket all and a guidance quarter sales quarter to slightly growth, the SG&A the exceeding lower margin long-term effective compared a we growing solid year, high on

in a quarter on the Let significantly. the third our a by quarter in each encouraged regions regions seeing segment. on double-digit We're sequential the growth Americas basis. our about delivered work of Group, to from saw more a to talk and served. up also moving second all before our return bit all In picked segments significant year-over-year the has we're and Most outlook. growth we residential in trends repaint, quarter especially largest improvement segments the of Interior segments me in

new momentum up As in gain. were a the quarter, reminder, fastest segment in this mid-single-digits. last also growing by opportunity several the years Sales and us continues our share largest gained and has to residential the over been offer for

percentage business DIY robust in the quarter. quarter, COVID-related driving with projects biggest year-over-year delivered throughout demand increase Our the the consumer stay-at-home

business remained in the down improved quarter. low single-digits customers slowly but Our

strength segment market. pressure The Protective job site flooring and multifamily marine remains theme treatment most Demand Our take potential, infrastructure We an product our a in remains gas, remains business in remains well-positioned positive in moving conditions slow. investments sites generated year. property delayed some a paint continued job to remains perspective, of that depressed single-end will next future being comps and oil turnover customers exterior remains heading predominant favorable more direction. telling areas on challenging largest segment's to and are become more is low and Other From we is projects. start such were us significant overall advantage digits demand and water issue sales believe Access from segment as perspective. this a quarter. Encouragingly, the and to into saw than pickup particularly double the wastewater the by in projects repaint where single-digit segment. in growth the and in we are as are which by are a that residential a under as percentage in maintenance stabilizing, percentage up interior high also paint, rather double-digit canceled.

unlikely the this unless type as quarter. digits in approximately Additionally, we as significant they spray demand. were of invest the in This Pricing sign expected contractors very another to anticipate quarter. equipment in equipment X% are up third double encouraging strong is was of in sales came and recovery

Canada. a growth. services pleased these we products continue management expect We We're make quarter. sales year-to-date and and in in with fourth opening the anticipate similar to and a We in XX additional productivity stores of of U.S. XX in level We stores, opened stores reps, new by of effectiveness and our in also to year e-commerce new the continuing use quarter investments uptick enhancing drive the trainees, U.S. approximately new full a Canada. in the XX total third Along platform. the innovative the for new

during We improvement quarter, to by driven strong our in pandemic. projects focus working Lowe's. on Group. DIY demand, this at by home double-digit home notably nesting to Consumer consumers most Moving retail demand on continuing while the growth Brands closely our customers remained the with generated to with robust capture

Australia, year-over-year collaboratively quarter, to chain organization Europe admirably product the continued mix global margin sales demand. a to working second Sales improvement to growth. Similar double-digit unprecedented meet help the region by and to prior favorable mid- perform Our generated and Asia. percentages and with in drive every in increased customers single-digit significant to by we supply growth compared our the in Internationally, quarter, leveraged year. strong percentage operating

the reflects private this in including team has Australia. work business, the reducing two years and label ACE and also improvement done margin the last our portfolio, to over Europe SKUs, exiting Our improve costs rationalizing terrific

our especially in drive the category. We continue remodeler to growth paint pros in Handyman or for partners, business reinvest who to long-term this

Lastly, inclusive in to by on currency We're headwind comment to related Performance trends let Group. segment's in quarter, X.X% changes. growth the me a return rate Coatings the of translation the encouraged this

significant on single-digit percentage. regions, quarter a by in fastest Latin basis. all the in Coatings the America and from improvement in of Group, single-digit The also by Asia nearly both the in Europe Americas growth Performance generated low the in delivered high perspective, grew regions Groups sequential a all quarter, regional the grew percentages. majority a year-over-year divisions up second From As quarter divisions. quarter third to and

up appliances in slow, investing up of residential by Industrial We with in industrial momentum believe expansion. General divisions. a divisional Our in where in in the Division down are and largest sales the in start was packaging new coil led in a in slower growth low percentage very I'll the capacity strong business, improved region business encouraged by From in are construction. Sales were remains customers seeing and and our where and percentage, to with construction traction. all trends single-digit regions recovery the quarter. North in PCG, quarter the we beverage We're our quarter. to offset resumption a correlates perspective, single-digit And projects, food kitchen cabinetry, growth team were mid commercial and new other America, our furniture flooring similar the by positive in cans we high for in across performance our along both wins quarter. the and results. wood, every coatings region to where non-BPA Demand selected a albeit for the to robust, gain single continues mid-single-digit deliver continue growth great In the coatings, digits positive

job across shop account at industry to XX%. approximately by competitors. where This up also by a levels. done We sales driven currently miles solutions better than new the estimate our And growth single-digit were offering the about off in collision low We returned very XX% automotive quarter, is driving a pre-COVID team nice are volume percentage. refinish of has in growth

were a general by these percentage We expect industrial, continued the in single-digit quarter. down low trends. improvement in In we

we up this under in did mid-single Europe While quarter. reasons we was never pleased America with There the sequential double line are currency-neutral Latin this North see America second in a quarter, the several decline Regionally, was from improvement. improvement quarter. is digits we're digits, double-digit top up in optimism saw fourth was down, the on very high the basis, business. for while Asia meaningful and positive significant a the and very pressure, was remained where

our seasonally our fourth a to on guidance. I'll smaller you quarter is one. Moving remind that

and repaint seasonal expecting to previous in in the residential product similar while the quarter, material see other quarter slowdown Marine. our with DIY, We're or We expect res U.S. mix normal years. fourth favorable architectural & in to new sequential in improvement demand architectural continued growth, expecting Protective segments not the

We a our of year. as the quarter also in return part typical interior/exterior time interior the products ratio more a expect for of become to this we mix to bigger

the in At demand recovery end industrial fourth the XXXX of increase will by moments customers' few inventory net On of sales a likely XXXX. cause of described we by quarter anticipate I backdrop, of fourth Against related X% quarter time, many continued side same encouraged to consolidated choppiness true X% versus end markets. this the replenishment in will dynamics pace positive market the of some to business, of pace and we're the trends the ago. the

Americas percentage by Coatings Group and the operating fourth anticipate up to up Brands at Group be low a or Consumer We to single-digit mid-to be up Looking our to down for Performance a high-teens Group percentage. segments X% be the X%, quarter.

we percentage, by to to we Coatings year, mid down On mid-teens up year up Americas our up Consumer basis Brands be segment Group to single-digit single-digit percentage be are the up operating full percentage Group Group on full by XXXX, and from percentage. by improved Performance single-digit be anticipate by slightly, the based flat low a for to sales to quarter a low guidance outlook. revising our the a For to fourth low an upward

quarter. the we and making On do SG&A in expect growth see opportunities, we leverage in incremental as see as will much margin be quarter. expect our long-term gross to SG&A, We in to not our expansion investments third

we diluted share to $XX.XX most full of to share per $XX.XX an $X.XX per our XXXX. of guidance share increasing amortization to increase XXXX share On acquisition-related quarter outlook percentage. within our last per material raw in earned year. $XX.XX Full in $XX.XX, some the XXXX. midpoint to the expense of XXXX of saw in share. less compared to a Embedded to $XX.XX guidance will benefit again, per the the and full earnings per compared year range our fourth an for basket year three $XX.XX inflation we half that share year the $XX.XX are, for outlook, basis, commodities, lower recent delivered the earnings share comparisons Based income adjusted we than guidance, the the quarters the expect we to be latter of is be our sequential per assumption by per on includes mid-single-digit the at deflation We XX.X% recent the XXXX a over year, current $XX of have will first of approximately of expect net given in

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

projects. over related facility quarter of to expect dividend remains Earlier in of $XXX an to month, the per This paid third share during new XX.X% share, common the CapEx for XXXX. M&A, purchasing Directors stock. a the fourth We quarter, company approved significant purchased open dividend of modest guidance and Board spending company's in quarter. amount this per continue Absent million, $X.XX headquarters very share market includes increase the fourth million. XXX,XXX shares CapEx investing R&D shares of the of we our purchases $X.XX a of $XXX Our year guidance the resumed

be in has remarks, this markets the of they end challenging strengths sales truly us of in shareholder passion a our remarkable quarter results at earnings every remain customer I'm remarks. our front put We As create and our in in for started. Sherwin-Williams, meeting and very needs. future the your years. There about ways, focusing in our believe value confident with remained most opening take and on over I and grateful the this have questions. we're deliver we delivered just businesses by my their prepared long-term mentioned in their like and, of I'd and This team fundamental to on happy which opportunity to us growth to track concludes commitment, tremendous of morning, And you intact. we'll joining We one long ability us outstanding is thank term. the getting that, for many to

question-and-answer proceed you. session. Baird. question you. of We’ll with your a Thank now be Thank [Operator first And line Ghansham Instructions] from comes Please conducting the our with Panjabi question.

everybody. morning Good you. Thank

Ghansham. morning, Good

what what sub-verticals within and dislocations disaggregate year-over-year? the pent-up guess, you to I significantly, improvement XQ. you reasonable How first XQ improved improvement is line for higher in each TAG, saw underlying commercial between for that volumes And it do off, demand maintenance property the do you then in inflect relative think time to vertical from versus an growth?

for thank Ghansham. you that Well, question,

some mentioned, start if jobs seen -- mentioned, back you've are coming sequentially, we've the think And you I commercial, with as we online. improvement. as

projects, I our have the do restrictions requirements challenging out that the on with proven think lot at to go I painters make distancing social there, a on when you getting along have somewhat look to think those that's with to customers. ramp-up progress our contractors going the more of and

go expect more So I'd in that we that as into progress, segment. and we if more you say XXXX, will,

serve of You one we to make be asked about an as these other like mentioned regarding that any might which That experiencing. with to time, professional creates for of And out the might say can interior and the start we're getting going conflict that segments, be for it pushed look we work another, pandemic approval that hopes overarching our contractors, challenge. maybe contractor is, It the has one same of into as they and opportunity out our town, to every and each well And area, to comment a experience there be have no you All for segments. at exterior, customers. as the all project? market area pulled in this go do our before, said, someone I've that solutions into commercial this found create getting for, is be for one customers. I'll

we're our working am for how teams. so grateful I earlier, And hard. mentioned I

just the way can. in into few a Our field professional in very one wonderful each of job people responding these a teams that doing segments are in

here, into way to represent And the as As year. to segments, the with comps these, at again, that relates we begin next these I'm it segments. me, I favorable looking might, go

with you residential feel color repaint, If I a of why start give little these comps. and are I'll you as to each favorable

yet. share. double-digit but the opportunity on hitting while dramatically, are as all interior, gains, We improving to cylinders well The coming grow talking with quarter for offers terrific of not out continue a as to a opportunity about us we're

those are faster and accounts the this field, TAG than year-over-year with the year, our a growing team year leadership Our years. new employees the previous have we terrific team, in actually on pandemic,

So our area growth new this been terrific. in has just account

relationships process. exciting. progress as mid-single-digits that comps are our XXXX, new segment up to we're res that the -- into greatest sorry, year but into gaining, same they're here the excited with been next our into really that of XXXX, the a complacent growth. year. been as running offers the given about part up. see into -- next year turns just making go for hit us Talking here. the management also we custom we're in year. still here, for marketplace. we're We our is fact regional our excited had has progress finished XXXX builders, impact impacted XX another I there that really making us. least fact really are are But remains here. in who's business coming with particularly year new we ramp of one, In largest has favorable one. as repaint the terrific is Again, the position XX homes XXXX. a next the the these share going We So prepared market of out the the residential And the lack thing, feel here, not into residential, for progress shortage remarks, our a exclusive But mentioned turns. go this supply of again, starting business much strong in as fourth throughout position an going quarter And as are on it entering we the I'm top large gains share of about of businesses been and this smaller we've This comps property market But into the well opportunity Clearly, commercial, my offers homebuilder by coming as about this interior as we have, in a is customers

like If presentation, XX movement you'll financial here to again, of their recall, tell during and starting more as the We'll we're our community starting our the exclusives customers the feeling XXXX. and better XX progress this starting about are enter end next of about we you are likely this that but about to here quarter, tenants move. with our and mentioned here from sense, top more into the customers feel more to terrific is hear I with at see, position

sides. -- professional the So are that's those

don't You DIY But a DIY you on ask I Al, lean for company here. from didn't if perspective? a Why side? maybe, could about the talk about we second

year. Yes. demand everybody's on John. is Mistysyn. is next This question -- into know Allen moving a Thanks, mind for We DIY

the to being Ghansham, our offset Coatings In in I drive potential in to wood, more next and able to for and volume other versus due around some Consumer Let total trending are these when year Group and it's at confidence growth down commercial, investments our color headwind res continued X% XX% turn that help look we've remaining quarters property coil, just Consumer to early combined investments talked general auto approximately the are year, and normal to quarter a to expected demand. part repaint, sequentially our strong up XX% strong sales, year. Performance provide in XXXX try segments give that Brands the DIY incremental those improvement together, next the increase. expectations in customer in in the programs businesses slightly Group, services DIY is our quarter into The in programs, in offset to of packaging second try is reps, our second continue and less new And next the of customers is the of Group great third versus but XXXX comp represents a a those and and industrial refinish, And last John put returning The then maintenance to gradually me unlikely sales about DIY Americas year, expected quantify to demand, it, easier TAG solutions quarter. our this third to drive then sales better of us seeing comps. Brands our sustainable If and P&M return to been res are quarters. for industrial are which increase sales below in to about and to year. making tools with North segments to America. our ability grow really harder growth growth,

mentioned for seeing. That we're Thank you to reasonable, And be given choppy. you. expect John, question, Okay. that you the second demand what seems just

that an costs serve the how as early freight, the so it we TAG likely cetera, et customer, and also should with seem relates Thanks shift across omnichannel raw material outlook your to context, just that higher network. about operating In costs for higher cost You pricing, XXXX? store to much. given have just think

be here with our to Ghansham. Ghansham. I'd consistent we've Thanks, past response had, that discussions pretty say is going

any customer the proceed we of not We we'll decision. material that financial front team, we where every right then talk at we now, immediately basis, a that there we look then that the bring with increases any out of with to or our you. make goal then the energy, XX-day first We've cost and talking we every on and we've baskets you raw customers, community. first. I we, As laid increases a healthcare the XX not to days all costs, of it everything at that be look with We come business, from now. out announced should are. on, Once with the to evaluate customers out like out aspect And said, to we're our we to management decided any in

And, we're Ghansham, We'll raw as that, our material of offset middle divisions. the on suppliers. with we'll And, can. in of and back know, much plan year increase. And Yeah. next normal as to reviews to the operating we look absent push a internalize have try as we'll you their our and other at price increases then,

much, so guys. you Thanks

Ghansham. Thank you,

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

Thanks much. very

Good morning, Jeff.

different DIY Is very growth in morning. of North than rate business the DIY growth consumer Good brands in the in America? Hi. stores

similar. No, they're very

know, our a percentage overall. much as TAG organization and DIY But, is Jeff, you smaller

so your between in and Coatings growing markets, What's good coil very, industrial. Group, difference very that negative you And growth two Yeah. general Performance is those but down? had industrial in in general the coil, is growth

Jeff. that market we So the it's serve,

business you thing They picked I'd If had an and the And been of we've coil in about have the the great regions. winning projects have commercial coil, other into example, at look space this as some been positive. say of appliances, give have the up applications extrusion credit. as all coil, the across commercial team the benefits

space in GI in same that the of for currency you for mainly kind coil GI. Asia, So a again, is our to of business, description in as choppy been wallet growth, good description we here we LatAm, were here. choppy doing about they've of the in space, I lot that in it's in well as – U.S. Europe, our I'd well. a But at believe, It's TAG have say, for very share positive. coatings our talk look in would slightly applications those and if few did use General if a geographies: market industrial, about U.S., talked We business. a been local have the I

you Okay. so much. Thank

Jeff you, Thank

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

you Yes. How higher DIYer? mix. Thank of buy Are from more And legacy DIYer couple you to is you. different are this being inclined release in terms earnings characterize paint? would in seeing in quality about a your in there's paint? it's they consumer COVID your – product whether or just whether it's of higher curious quality comments they that buying TAG, I And you're was are

that seeing between are is that say mix customers. I'd would difference I a positive there a say shift, Steve. these we

look looking DIY at just that of mentioned, that. a store for a Al percentage experience. are might The the color, and XX%, business, areas that just they're so you in on. If our store, customer there expectations roughly in Sherwin our business. specialty service expectations include that specialty of for looking typically small They're store and selection

to painted at a these of we that I wall one about heck. I their nesting, are, do what of to and stores, many concern I this at and home, be We've might we've would we've might think in If mortgaging next leveraging you or sales seen in call a as kind our is our that look finding that though, on I have what cases, is that they've that described, overall, customer. decade. in kind say the where projects, that customer not you well looking people experience that. a they're repaint sitting often gotten in share not a go some I DIY as with that is around have we that question this paint general, themselves 'What And the of may are bored and referred been the mentioned these minds, heck saying, as out of room.' go around, ahead The the reason they're residential jokingly

increasing not bidding repaint activity actually is our year-over-year. customers fact, In residential sequentially only but

increasing. quoting actually customers they us now this our the were last on res is that success side the year rate are more year, than they are telling So and repaint

experience. a So res good that's want customer, growing. up and DIY They have backlog They we are a typically moving we have home. who's a repaint customers

that the training drive Steve, Brands that design it's The is is at the really to to programs place, store bottom the helps drive they're add top segment. our – in really them and in line solutions, would by talked trying and level, products bottom line. customer thing drive about our that I because top us and only we've their higher-quality as it also line that Consumer helps to putting line,

with the customer best experience. the up overall, And ends

So as with well. our it position our brand customers helps

And there this a have so initiative? lift price/mix in sales all Was that DIY what you had X% TAG. from given a same-store priced, been was might

one look price little rest You if though, has have Steve, The The drag. X%, been a P&M been X%. a at could know, you below at volume. our thing stores would North America – is I you bit point out, as would

architectural If would P&M, digits. you backed up mid-single be out

So I digits price perspective bit mid-single would is put say a to little architectural. below in more volume, on it X% be if

Thank you. Okay.

you, Steve. Thank

The of question Arun your Markets. from proceed the question. Capital Viswanathan RBC next with Please with is line

just the your some morning. maybe maybe ask about in to Congrats Great, Good thanks. on on have you're here comment new Thanks. and of just on wanted think you results. year, And those of great issues? do you elaborate entered you you've QX? then to given margins guys the increases in some even expecting SG&A. I Could margin just SG&A the and of Maybe some you level, the undertaken? can on uplift elaborate reductions gross a next volume cost

know, quarter some give since our guidance, but you down on as around you general. me Arun, fourth try our in P& Yes, the go item item color for don't L let to we by

platform, midpoint, pretty a top over to you the that to mid-XX% them quarter saying North at brand, store the the means which right through have range add And to similar to American at the fourth in performance customer is more we midpoint allow to me our we was business. increase in and in talked of second investments about we In EPS investments fourth increase will share the while the and That flow-through really about And talked reps. programs stores, – allow reps, that of them with that believe customers, a their more tells cycle then is These solutions XX% the programs customers second year are is consumer we in this profitability. very talked and And the also e-commerce let new I investing customers, over about services, our we more at expanded of helps allow the be – our fourth talk about our And quarter very, start drive strong are XX%, grow value believe on strong and what successful. our FCP investments you sell these up what over coatings investments off, back adjusted forward. provide by quarter. that gallons a productive. in products, 'XX. last about, quarter customer quarter, XX% our programs What XXXX. that the to that, in department, services going be First at in

period and into invest customer of out lean to of investments. are was growth a of North our continue these X, digits forward over the believe single America rate our coming and success X, compounded architectural same We were that period. we multiple our average market and high And the and the demand that right sales XX-year

we believe similar this So environment.

last Arun in our which across margin, end typical long us a other I of impact would segments our multiple did strong gross you year end, that drove here the architectural performance stronger why margin gross grow fourth Historically, expect year. a see allow Part sequential the year to term. and is on third inventories, to current quarter these performance a do in expect quarter. to from than mid investments make third margin last fourth improvement kind in quarter of we we slowdown fourth comment is of market that demand of had only gross our such in improved margin The that, all year we We margin. LIFO, we number small see to a last quarter, seasonal into does gross demand, we get the a know, quarter, our over get as adjustments it's And quarter. a

allocation. capital detail. Thanks about for just then wanted also And your ask that to

on $XXX buybacks quarter. over in spent the You million

that, see M&A take how Thanks. could obviously, nice the So sheet that if going the any that you now opportunities near to to Maybe future? balance you also cash? generally advantage not be just discuss of in building that. there's market, you're Is running can the

and then talk capital I'll about talk will Al about M&A. first,

Yeah.

your policy. capital the of to put We'll hold cash. at I of We've quarter into bigger issue it amount going on work. read balance not to normal. would cash point, to Let me at the quarter. than did allocation just have end we And And of the sheet fact not highlight not this. are a our anything we our that cash was really the changed end timing the

the margin stronger The of are teams to operating outside that stronger certainly have cash September. going we're half issue bringing and back the timing the generating receipts We in strong a keep flow U.S. from U.S. but there. just and it's work, to to second putting

you're right. think I

the the reduce of generation, then look our in to in million got our and buybacks. first – at over X.X. an in increase XXX returned CapEx. to shareholders that our months. of $X.X form billion $X.X And XX% debt really to dividends we've last $XXX form We've our nine billion took of to year, That's opportunity You to strong back cash the the we the just EBITDA invested also under by leverage debt got and

forward I'll John year, same next into going us. type out let you're looking about from the see of M&A. And process talk Going to and

I'd Yeah. first, Arun. say,

sales tough, to that discipline a Things find way get or very that a that's to as and in in strategy. we're that. business, well working sales in I times, our book We've on got think as you in we it's really the much basis an of just defined – we're important your of buy pride M&A the to to strategy I organic you how for fact or here. that our that are conviction space. a have challenging determined who sense that, on much stay get can just buy let's you great your acknowledge are. And very want teams think not doing proud I'm and teams

also got this We've we're we're area. and in good on very I'm that making pleased that with progress about the targets the said, that feel Now going some very pursuing. discussions good

in that reminder, accelerating our largely or we're in businesses in As the pursue us existing fill be geography targets we that their position where gap a in a help will a goals strength in or that and underrepresented. industrial a region technology space, either targets would establishing the a

everyone, our that is be said, to Now to everywhere. goal not everything

a So market internally shareholder we would this about bring help we'll and value. the and value and us go talk create a lot about unique our win, rights to that to differentiated into how

gone and with pretty here. discussions progress, the the think well I So pleased have I'm

Thanks.

Arun. you, Thank

The proceed of next Please the comes Bob from with question question. Koort line Goldman with your Sachs.

Thank look end, there you've terms in today? John, In bolt-ons. you're the Are optimizing portfolio. that in talked you. assets have just curious, it invest? past, you pretty might about maybe comfortable also at Are you the – with mainly some of interested you to sounds to the like portfolio

We Well, comfort is like not good at a Bob. complacency, here like we word comfort, Sherwin-Williams. nor do don't

know you that. think I

we're So brands, programs, constantly businesses. SKUs, reviewing

our we think shareholders. I owe that to

think that, is pulling and that I to lead David disciplined and very Presidents that have are we blessed group It We're So understand I very there's not that Al that. terrific take. and a on. approach something four

how make shareholder these think money, create terrific to understand to value. leaders are I how that

all on SKU, all a there's those down programs are the sometimes the constant And way So levels, programs. to from including difficult. businesses, review

your If But that it's decision to a at ensure think every want stay terrific willingness you're leaders to baby, look it's to launching close a that. value. I demonstrating you creating these program, are and

markets, delivered. most was you expect you in very of how sort well strong. It's refinish. to performance your come outlier I'd a wide did the say, And been of that we

Of how Thanks. share, contextualize doing? share, auto market So and relative was did what you you're that a capture that sales market what And refinish, industry the this quarter, to for markets in? is that? $X much how you can billion dramatic

Yeah.

to large of the well, Valspar of So because talk here shine We COVID been an think those here. combination working been we been about that lot your understatement that's midst positive. asking of with that's some -- Sherwin to technology, you, it's with legacy Sherwin. we've to really excellent with wonderful been and I a about converted We And combination shops market for well the been technology ground a come say, that as over will allowed they've some question, through. along business synergies Bob, that's of don't believe the up been of unfortunate legacy those have a the growing who or example the an the numbers it's hard. terrific. tell come not I to share a because the And It's these that's that team technology, combined as been those is To experience the This opportunity time itself, a it's well of Valspar synergies I'd system Sherwin. received. gaining thank of size there we're through it's been have aggressively that trending a channel model we question, with have. point, spent to been technology. you many customers that as but of quantify People it's in say

servicing stores own Our these customers.

our we of have pun, stores. working working. automotive a on we in bit putting it's it's and architectural of We And tank. but the gas aggressively, do own it's plan this as same mentality lot a through And our stores a

in add growth is to I'd saw that Jim. And we auto, What region. Bob, is this every

was wasn't we So niche region it one there, it every just operate. that

the like I tank. on gas the

All right. Thanks, Bob.

with of The with question. next question Juvekar comes line Citi. proceed your Please from P.J. the

good morning. Yes,

Hi, P.J.

what Your Can effect. idea roughly can give a us lower margins just down? you breakdown, XXX Even between mix the input rough that were And breaks from volumes an I break you up it's you that points. basis how almost mentioned higher you down earlier, costs? if benefit got versus think

always bunch volume the seeing Group. Consumer stores, where growth growth I started in talked North me return they talk of know growth sales America we say with a starts it or architectural XX%-plus TAG, And volume. I heard a our P.J., you've high with Group. times, paint this to our Brands Performance Coatings about in the Yeah. mid-single-digit and about And but

saw second driver. biggest We and talk that's it less favorable So than about always the a the bit was did in quarter. product mix, what little the we

this of And less quarter also impact put And in the being about we talked third pricing quarter. moderated As then we again, raw our than an had that second year. we earlier some. you know, materials had

if the then or volume increase, it three similar start to I'd bucket them, with size. other fairly -- well over of order half rank over So, you kind of force and wanted of the being in rest

of you for has John, a been execution during it and I if seems strong? in pandemic mean, far do another beginning, like so the think you. case COVID, it's how already scenario And we question But wave just about your different this us planning, of contractor have with decision Okay. is on all excellent. consumer you're thinking sure the entry? doing I'm businesses? your walk how Do you're you a maybe internal will think can through so this, just you planning bit And recovery be -- slower? to DIY continue your in

yes, we exactly I'll right, you understand you're lot might gaming that scenarios. could it levels back do made have a of don't have thoughts execute. a mind, you're blessed to again, talk how we why I the tissue, ideas maybe confidence at just be. that a and to can And know to Sure, will I to have. we maybe that in take with different the Because of as P.J., much it teams unfold. I all by we our war so We points it don't of refer What I earlier come about out. what to teams and just lot ability is if leadership we experience, call whatever scar second right, respond about And are might

them people day. come of and the -- terrific have every all back to the that we the of have All people field comes execution execution, back to in we the

years bullish our just and talent, stores last that. that could our take presentation of training fact mentioned outstanding financial years, explain community recruiting developing I and XX and is if why our about was in feel MTP the so talent I XX and month, program talent. I second So, in about retaining a this reaching

throughout understand TAG. understand got not company, And aggressiveness. They throughout That that And culture. the people just we are means helps throughout entered graduates understand talking college to so our grads understand have and that These company. about recruiting able in say in college annually. company the TAG, through so X,XXX our right XX,XXX expectations. ask, why execute? of do mean when I strategy. We're our I'm much. They literally we've confidence our have the I these They They maybe now. us are When you we why

fact, program. In come fact training through the people that in that management

we our have. in customer their store of promote In understand in And products, a fact, means everything from service, our TAG business that logistics, career XX% within. that us started reps they they understand this to and allows

to of when leadership is, so what Well, TAG look XX% got that's responding they our at team the ifs? these your we which MTP programs. And question started leadership, we've in is what

understand and they that So our to they've started everything asking do. we're and people our stores

X talented this. got in were retention all the very blesses a push and of Division MTPs, also And think and Presidents was do of is, and Vice clear is, turnover. I what that that do. history got mentioned, that component And continues leadership. Presidents win. a skills, come I this they helps that that the a XX% of provides able the a up. drives CEO to we've feeds And Presidents, people others Senior it. sight we've I And and And got team line have and that We've XX% have of low the to the question, to long pool to that through presentation, to community does a and XX that's our strategy. it know that If career critical leadership And then our answer think our you to retention. path Vice of our had imagine, how at talent can what having your I to can I believe, long be to follow, it's experience, financial And resources history we're able wonderful group

could there years we've at do? about want is way X,XXX that. this what of reps X means blessed turnover employees. service. I overall nearly our are XX% what They've industrial our workforce. employees out of or think that come beginning, culture the talent. statistic, does is is – starting have through voluntary you TAG, companies proud got of they think we're then us We're full-time be. to by same XX our but service, does I And around way. talent with stores. our than as They're that X,XXX to this fact, in that's allow the many of X% look what push that And of that's that and in to have But we wonderful all where more a XX% don't then to In the Well, X% when can it our our that of years a have drives the and reps, more from retain. stores, retention back, turnover with all they the

I'm And teams leadership we member our follow, takes are so doing. our on that and I'm team me, execute they says, and the And terrific when better proud people win anyone. front and streets, the part a this and what follow proud really of because than small of a

Thank fantastic. Great, you.

PJ. you, Thank

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

back prior the Thank added investments increase the to year either the versus versus any you, just or or is SG&A this is investment? in going to of increase there John, way quantify QX, QX terms what morning. in good this

do kind we're the we've reduction going frame quantified to do. what because in tell you trying quarter, architectural. fourth would related of we're tell it way. versus to Yes, see to David, them what just you seasonal we haven't sales I done this you In

SG&A Our quarter, time. to at be fourth to typical back it tends from third go quarter look and of our flat if over the cadence is spending you period a

little you That's in you we'll had as much others general, as uncertainties around we said delever see bit the range in of wide basis. a delever segments, on It because I So potentially sequential not saw quarter. talked some dependent -- gave benefit bit I really -- we industrial sales different little of SG&A doesn't a that year-over-year and a third a the some pretty and about. on

me the can cadence the momentum what put will continued tell that December, see in we So November investment. into as as of we and sales

will presidents you also but pedal So our at about. we're as do one We likes to it from tell percent. too we're term, of a as comes and in group don't want ourselves, trying that and long of SG&A where clutch, to talk looking ahead the the to get far

Very what QX said And sales now QX back DIY helpful. and up you in to going just combined XX% are year-over-year? earlier,

close. pretty Yes. be would That

Thank much. you very

David. Thanks

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

year-over-year Good in questions Yes. the for about morning. working A customers on liberate of If trying of And couple manage and capital that third have suspect been balance sheet, of well. look many the I to your your sales quarter, subject inventory. inventories growth. despite own decline’s I cash at X% as

XXXX quarter we in of normal you context, slightly the to run harder do first normal? XXXX, you customers I'm pattern over than relative so that such And the to And see a different to that winter? your wondering, expect the expect assets through seasonal would do might same,

Yes, Kevin, first to your right. point, you're

DIY going into supply maintaining build sales we've the the quarter just door. we've absolutely We keeping not selling chain With our with as and first inventory this impressive demand the are as -- much the spring season. harder building our quarter to run ahead seen, fourth been to up inventory the going of out

building on architectural make whether work at As and inventory up working ramping stores or them store at also far level, We getting don't here loading December up -- spring. next as our right products or that the and and DIY November with the customers, depend to our how we're to year, consumer in part the right early the we it's winter to time. to just demand the about into we're but of customers, trend in them. it's out with and we And coming of sure we our want think going the it's see then what

they to monthly And a I going we sure on products we're are to need. them you, tell that's our weekly, working basis would make a customers getting that the So right constant. with daily, be

we I'd serve customers. Yes, working We're drive but consumer point, to Kevin, particularly side. putting her little Petz Heidi to more those with are on a team we're look, in it those inventory if the just support means closely each and the working emphasize going capital, we'll those of to do customers. that, And echo customers. like as to and I'd going

remiss under the Yes, if side, didn't side. been I'd a where Performance bit be of Kevin, other I I on guess Coatings the say little we've pressure on

whether wrong has complexity inventory, inventory. think that chain, didn't out nice we drive a job try of done I got lot SKU can We're different controlling consolidations. programs rationalizations, lot build the just give a that place really team a a credit platform And DIY making on in And of so whereas supply really, to they've to inventory, to team full approach it's maintaining side, disciplined I that for out. of make. we as we're as possibly much the

then, as That's was really second curious raw I Jim, perhaps. question about materials. And helpful. for a

materials since would my XXXX? June versus do line inflation basket think recent guess. flat that what just But the You from if for in raw say cost referenced XXXX probably you is we some curious, October,

remarks, lower Kevin, quarter gave Yes, quarter a on range. the down – our commentary that driven, solvents. mainly in by what costs would on third mean, I was our was monomer, again, we resins, mid-single-digit in And based tell you I prepared just third

We've ethylene the up ticked sequential fourth some a propylene going up. benefit up of not see think feedstocks, but here, ticked into packaging ticked the as on year-over-year, quarter, side tick even much. still maybe we're has seen to up some has in Going HDPE has our we

So we're seeing that.

rise be as XXXX. we view seen always the bit think seen PDH do. some a directional some thinking I but which We're not tighter pandemic. seeing that to what are there upstream start feedstocks, January crackers, I We'll of we've a oil refineries, on is managing Certainly, totally in is from from But in again, they're this they're pressure of little perspective a It's to probably connected, prices, there. a things. typically early about say units, XXXX. couple pressure increases. sequential you capacity we would We've those through about give think putting

demand supply demand So up. is and picking And we're tighter scenarios seeing some there.

of that all could those we're factors at. looking be So

is going On TiOX been again, watching next this and to have out the demand year. I point, with stable. North closely increases heading what into been side, it's To well all that Chinese as about, TiOX do. America And pretty here some we're recently. think, chloride players

clarity have So just lot parts yet. a XXXX, lot of the quarter. a of benefit in but fourth don't still In a moving we there,

very much. you Thank Okay.

You bet.

of Morgan question. from proceed line Your next question the Andrews your with Stanley. coming is Vincent Please with

Thanks there quick a just a on country it's regional section level in of very to which thinking relates the COVID of sort look whether at? much. country trends, you terms any interior A differences level interior just one virus or state trends, as paint, are to it the part is coming interior, you noticing between of any how is of or back fast

well. are of to Not it see a as starting really, was we Vincent. I'd in areas say in slower bit areas, some some the those more pickup urban but

enough I on well what's they're in, where the are leaving, just but are even country. point across the just can't come – – getting to we can't pretty tired it's they're happening, If or just people I explain it. So saying or

Okay. next And have you it year, to not that on last recover In COVID is one case? now you just with this, because of the might side stores, your we're need then that few customers into higher costs equation. question apparent of the cost has that a quarters the or that become associated servicing

the case. Not

you much. Thank very

Vincent. Thanks,

next the comes Please Rosemarie question question. Morbelli from proceed your Research. G. with The of line with

DIY growth to If the And for slows idea lowered margins an DIY year as a you Can how to you when point talk the the go you we expectations more when morning, at and, normal consumer and give did what you brands particular, look you last could the everyone. post-COVID? Thank good back versus in down business. and breakeven environment about you nine year? versus us can much months to this

investments going programs would DIY. drive be It we're the easier. continued that the on expecting Yeah, be don't across We're that Rosemarie. I making on say, could could volume. each any customers of And expectations get the in to the Pro. are our

we I that, of sales could were improvements in expect And we've just past And perspective, we're talked well this done as year, We like over our international businesses. on where as quarter put about flow-through really be. our the we've performing is is over we that kind focused not made international And mean, XX%. the to in for up XX%.

those the cost changes part we product field We're organization we're talked as as we that the the well business. that and private and was exiting support looking of ACE seeing So actions mix, favorable making benefits those about need label as to. our structure we at on how had of

wouldn't to So prior back say, our should margins expect I automatically we levels. to just slows, year because see contract DIY

that think about. we the high-teens talked XXs I to low

set target, we As new high here. going margins we'll on is operating you those that know, the and talk about we new when forward watermark, expect what future a in the

of know talk difference is the of Lowe's the there level but nevertheless, And. at And is you specifically, difference? there the smaller between following a all about type on cannot customers versus other up profitability that, retail? I a

Rosemarie. going exactly about not You're to We're right, talk that.

try. I said, I Well, would

You the question can repeat now.

new is of should debt quickly, And go timing level, of that it million, because repayment? expect interest then expense the your or to the down XX.X we looking a level, just at

I'm sorry, Rosemarie, of I that half lost the question. first

to Is on to depending $XXX declined going or the in more, million in some decline paid million that quarter. level, is a Interest third we quarter? expense $XX.X it this new when

Yeah, going a that's estimate and We're some even I think to good things level right it's year probably tranches something forward. XXXX good the looking But now. with. do with next at into a

And debt is on longer at a that previous leverage, sounded no net comments based X.X times reduction priority? it

happening, really it year. not to debt circumstances, the coming agree thought reduce prudent on would I to this was into looking But I We talked that. and based down. with about was what it take

So – correct. are absolutely but yeah, you

you. All right. Thank

you. Thank

is Securities. Seaport your with from question. question line next Global the The proceed coming Mike Please with Harrison of

morning. Good Hi.

Mike. morning, Good

to pickup the about have? as wondering robust guys you're can seeing if independent of DIY was you within they as guess are Are other I in migration I toward box are you dealer I'm consumer? talk they question is, seeing channel big what a peak share, stores get as or maybe well company-own to trying or to your see as maintaining continuing stores they the retailers?

probably nesting share real say relates you that losing to right as don't those same business do paint some in time, they're to we believe now Mike, strong of they I that in from POS from dealers. an most now, degree it Hi, likely would they're the most urgency that issue but where people or benefiting are DIY. It's Hard gaining independent data across know, as the right doing though say was to are environment that pretty third well. the get independence. quarter We

the a little though, term, share. we The channel continue centers. it's in this this on continues long-term, will the expect go lose home that Mike, cycle. see bit go continued do-it-for-me, to longer I Pro do-it-yourself know I we think, likely because I believe think share DIY in it shifted But will back. shift to this back to market and shift the gains we to do

like terms right. it where there, packaging seems a you're results about strength another are area can be differences that your contributing or business? the quite that Is beverage in might in be you that then of an And share? underlying than competitors some where you All that have of Can to bit relatively doing sounds strong. higher is your your in the to demand mix market talk business, the better area where maybe packaging really

is Mike, to you, as there I as as wonderful relates a that technology. us. wonderful would doing we've strength got I tell packaging, But a it you job team would of tell area that's for well terrific an

And in aggressively to both growing that we're beverage. pretty we think continue. food and I share expect

very All Thanks much. right.

you, Thank Mike.

Please BMO next with question. from Capital John of comes Markets. McNulty question line The the with proceed your

for thanks Yeah, question. taking my

compelling in earlier easy comments kind called you comps. the you some of around, Q&A guess, I them, So made

to that with what it be the And I should assuming the considering, guess, rollbacks that a volume look sets or X temporary margins, about Stage of mind fact little there's that? we mix we next should as for XXXX, to be year. biggest we raw or cost tend in hampers that it's should materials drivers kind in have How need that are what offtakes to or that some the volumes growth updraft bit? that be margins room you be there maybe thinking be the or of so your for and we whether

going Hey, favorable that, it. I to We I comps. comps, answer make Al sure want to easy said, have never that but John, said, correct I'm we

point, a point. fair fair A

down They're want that having In that they're nothing their team to suggesting say not and acknowledge there, down easy favorable, there. doing easy. that entire leadership TAG chests is that

Al, could Now, you answer that.

as we Yeah, a into do year. more expect normal go see next demand John. environment to We

favorable favorableness the product DIY mix, on I that we're saw see in strength about of the two we quarters that and performance and of customer to volume in Some the talked coatings. starting on some

process that in with a as yet. pricing of we see more that margin And at we in have we'll gross continue planning typically to leverage. me have where in SG&A. to on operating some along far of environment, tell driving what end through margin our or you what -- going environment, from invest from can that's going level is the continue that as depending So the to guidance normal get these done, our around kind expansion more we a start our a or businesses will being That at company, give material from said, get to continued I raw on we to And leverage not color going back the on to of to we're But come a back. look going mix that. XXXX we opportunities to We're of have SG&A. businesses leverage a is where we're come more from you mean, coming year And continued process. and to

the Fair the on be at would enough. And pipeline look And then the would M&A side. color. asks now, I you see say capital the Got pulling of When it. How widen? other that you the further question point have or just right we started appreciate see you deployment should to the you be trigger? things need are narrow before that? still of relatively they kind to at shrink down about on this thinking And that kind bid

at what's little be looking realistic. asking that I much and mirror as how of saying, they're others And John, how to to people a feeling the to are hard they the want marketplace want much right happening harder and narrow though in I'd down. as some beginning We're further more say now run.

gap is I'd So, say that the narrowed.

Great. Thanks the much color. for very

John. you, Thank

And Evercore Please Melich of you. ISI. is with Thank question. our with from your question the proceed line next Greg

Hi, thanks. Got two questions.

pricing Just considered Coatings, pricing, any on Performance follow-up. coming? now have there's there that has a And especially increase the in capacity a been in I then that's

On a targeted there been, basis, Greg. has

help Okay. to there was Performance line that some we that Coatings top overall Could say year-over-year? the in

Yes.

product I think so Coatings at you the I take be the it, because is that FX and like, up look Performance way out are businesses currency neutral, I would in Greg, diverse if and quantities mean, of it'd X.X. Yes,

between price and split could probably volume. and plays part mix, there that You evenly because mix a

to if for center the once right the Thanks sort is are million? and I'm new sheet we just the up everything, the expect headquarters buybacks. out, $XXX us sure doing it. you're trying from getting of balance de-levered? billion dividends should to and the here. to cash just you working to pieces ops R&D that and for sort how I'm go figure that of the $X.X it of on reminding with make then I And on capital want start Thanks the that. CapEx, allocation, Got

certainly, a million Greg, for year. couple up million. years over it process, -- $XXX we're where $XXX going to Depending facility going projects here, probably approach timing could Yes, to we're in have us that -- and where two at are construction the take over on a

So, it X% long-term, of trend below couple years. still X%. it But will we'll be a up back for about

then And for run $XXX sounds million become a this like not run rate, quarter? it. buyback it then Got just a the rate could

we'll our and Greg, cash the look cash that here $XXX back stock. Yes, at do you expect strong had use on third balance excess to buy quarter fourth in sheet to generation have, million, again, sitting quarter. I in the we

That's great. Good luck everyone.

with Next your Fischer Please Barclays. question proceed question. Duffy is of from line the with

Yes, good morning.

much a kind you for coming be, got China the second M&A with through a there would Just other then is than question you've markets coatings more out of guys go of expertise faster huge how there? not look geographies, for that recovered because But in it's follow that the Valspar it's this dip? see now business fruitful for area acquisition? on to you on And And to you. can those you China, end

We we I'd And the to all actually, Duffy, solutions our Performance good X quarter say the Yes. us. Asia. of feel were business, in positive of think, some X Coatings ability of -- the look third the there. helps our that customers, businesses, if to to you X businesses industrial there's bring at in momentum those differentiate

So in that you add yes, we industrial expect a don't grow. maybe I piece know well, I'll side. to terrific that that think got, asking to continue opportunity much as But were the as although the I architectural we've there. long-term as

I'll that find value back the to targets we businesses go our that the book take there business, a shareholders. something can is we're good road, the in just brings if as be our very not channel in And buying the at as some we generations and here, that strategy. we'd approach there market, us, to side. the architectural yes, not to interested. disciplined quarter, which accelerate industrial right yes, work strong. could next far We but and they're the that help M&A businesses there, doing of our interested help as establish we groundwork help in down brand we're So you some, that all But look there believe, right pretty will Again, for that

Terrific. Thank guys. you,

Thanks Duffy.

Our of Crédit line next Parkinson Suisse. Chris question. your question with with is the proceed Please from

morning Good guys.

to growth So COVID factors. the area packaging the should trying So Thank pillars long-term how in the investors PC? order just But your given outgrow taking enthusiasm, should growth from of algorithm? just about respective we How assume other your I positioning end PC just growth substrates in markets? key step about to consistent is one a back normalized think of think get and you. your outperformance a already. sense

right, growing do from our Yes, Chris, packaging nearly is standpoint, right approval a than every pointing of standpoint, direction. faster And in aspect process you're believe we now. market that packaging technical we're

we've So wins been to going that the like new and and wallet, to through to really and say, or about we're grow. share process that We continue we about that. we feeling talked expect good coil as of

are and long well. got it really talk It in got the in mentioned we're moving direction we and really ago, but fact team business the the in it's the that here industrial we've proud and about our of in as this of aggressively, road. wood I'd XX% you head we as performance. is all because around of as linkage something hands they've the business wood demonstrating the expectations when we growing only back and about say had I'd industrial not we're say, business new the of I been business depth, right lot prepared about on the and confidence, already, residential very industrial so and remarks and really moving high as business pretty the was didn't the like wasn't talked great just the And team particularly like that that there Auto, it's hurt. your direction look right how there But growth that wood. in made positioning visible would about the their that between that we're

be. want the cars – more don't we on say, ambulance more but chasers, roads on refinished more often going road, we there's the to be to business the So the

we're feeling so about And really good this.

Duffy asked the here. we've come I talked earlier, position to our point, our often that we at look the in then And leadership? talent greatest referred with position We that with to or GI leadership Greg company's the that about, or Next, about. And infusion areas believe, to of your Valspar we've that came as I acquisition. Asia question love history. that And think,

market, look Group expect help our technology business. we wonderful to up this that at we Aaron business President terrific that And very that. these GI, really this here ��� of acquisition, at this to We the help operating cycle of our business high job bit Erter, every to GI is here. has a in each and auto that expectation do our about in the we've confidence going the come look XXs, margins to a drive. and drive and so doing talked challenging we teens, low have that the going in business, are when and in to earlier we're we confidence of of life one And goal and talent got

the things went the year of their this leverage than SKUs, more as they point. all improvement. pandemic them saw done that to look been just Yes. last get reducing U.S., do Chris, credit, half we get volume, I'd reducing volume outside margin on sales just into and in the that they'll highlight we – small operating it. slow that add mean, quarter second to to hard a X.X% of working of they've and really goes the I at our goes team of work. third improving of putting starting give That to XXX-point you They've that increase got coming on a even nice when I complexity, operations so when and out job

just But just bit DIY the drilling are that demand sealants next on as down the comment considerations was head Thank year, you be, to rise out front, the thinking XXXX? back had strong can terms we're when It to just Very you. you helpful. a if of very paints? sitting follow-up demand trends, and to major the reduction. parsing former, best challenge for the end think And we in and about market more, into little we're the interior stains way would about and on any versus seems there that on

think, XX%. there, XX%. our I that's have of That's – XX% see Chris, that comment back to and still over great up the next company and of that in DIY of goes And part to declines such I year. opportunities up we XX% sealants our are stain the it talked it's DIY think in any in offset that we other the company, I about

build have wonderful team a well. on that that. also in that, to that we as execute And powerful And areas most do. brands on those understands we'll We

this we think kind be approaching sides will both from I So of aggressively.

much. very you Thank

Chris Thanks,

proceed line question. of Wolfe with Please the Bellinger from David Research. with is question your next Our

for Thanks the Hi, everyone. taking question.

the entire QX? Was on demand you us a is move seeing further, were seasonality Brands you of first you characterized as strengthening even quarter. a from lower end the the Consumer segment, towards QX into typically you walk DIY throughout So that through elevated business what standpoint? Can period volume

if it quarter. on flat. a Yes. look pretty I David, mean, you basis, pretty at it's it's throughout flat the same-day

it. Got

up a just around on then comment And Okay. --? an follow early earlier the

About what? I'm sorry?

quantify equipment. business. that contractor has any an also to historically? Pro uptick sales update backlog there that and how The Can type way an project business us do trend? spray you the typically purchases? of Pro sales And the you track Is bids? mentioned after there you about in And those just told long business higher in terms What the and the give of of

I are seen say of have fact from by have contractors. long their projects still they coming in our list customers that evidenced that would now the the has homes, we Yes, our them that of more be that the busy a people and that would soon. and grown backlog but That's allowing are heard the part customers more hopeful on in

the preparing going I whatever of holidays, to time with that to think spending their as going it homes, be. for is allowing more some might increase pace be people in more in perhaps they're

the is good, growing I'd So, and part residential customers. that backlog repaying on strong our of the say

or the contractor spray we specifics it spray give I'd perspective. equipment, I a you making confidence direct the relates to as from the and what correlation you that So, tell purchase. of rather of the that equipment timing sales that a means not has between before how on will any long the mentality see

when these betting them. plucking dollars that projects that a they're so of on will of pay out them to a piece equipment, have or they're So, coming couple thousand for up they allow

So, road. it's down a good the precursor for what's

guys. That's the here. color fair. Appreciate Thanks

David. Thank you,

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

thanks. Hi

certain just you're of the discussion in given thinking particular, be positive on TAG, and follow-up next the green verticals comps some property can management, favorable of a of in commercial now? shoots right seeing year, Just parts about these

Yes. Very much.

Yes. I favorable -- was about we're thoughtful term using Yes. the comps. I in that excited I mean, So use this. these term are

answer great single-digits, You we position great is people, going got low products, a yes. in -- maintenance, the mid-single-digits down great have The wonderful We're here, Yes. relationships. commercial property yes. and quarter, here to

Thanks. see the going back Okay. business how just wastewater comment half there's quickly is of & infrastructure the If an question say, A bill, the first next remarks. could prepared a year, with follow-up Protective benefit? in to Marine your in

position particularly and the general protective is for work, contractors and about before on Well, likely. been water our it growing typically applied? guess very passed part. – and do very and with. That's those project. paint I'd a that that there could the or and mean, It's sorry, vary, say I I'd bill well by say are wastewater. I'd you you see is typically But position on we in that type do so a is a long at I'm would strong, you're a talking so, But good us. marine, when areas my say or of obviously, how look that quarter

So as be top that. soon as it we the hits would on right of Street,

you Great. Thank much. very

Garik. Thanks,

Your comes with your proceed of the next from question Roberts John with line UBS. question. Please

given and the to sure not your malls Thank location? stores optimize so in closing down going you. your of all in commercial footprint, market, there most opportunity estate are all on the store's further the changes forth? I'm real optimum Is an

we turns, develop. basis. John, markets us as for Yeah, look that at change a And opportunity regular and on the

as how support. of with approach the beauty the is decisions are as those so close we our to possible customer And structure

that opportunities So those we figuratively. and decisions are something leverage

we we U.S. about say, stores just moved year. would say did XX the to it's to I in taken have closed, lease when and We then that location, expiration a a the and opportunity closed. John, different Canada. six Yeah, And that. do about last We've I

process said, year But pace So year. bit like a stronger a last regular little than John this us. it's for

you. Thank right. All

John. Thanks,

Bosshard with Cleveland of comes question. Eric Please proceed question line Your Research. from next your the with

between break are that I you res know out the interior on pro difference the repaint bigger and at growth interior XQ business, within Can and all, side? XQ exterior the quarters.

Just profile looks trying see to growth to between and exterior? the relative like momentum what the interior

in Now, than the to our high exterior, strong much in that understand tell Eric, spoken we've I exterior, more of we're the on sales is products that. Obviously, interior. very double-digit would going interior and the you seen but single-digit the market we've paint you provide those larger growth about that growth not detail any help

-- quarters, think interior Eric, the to FCP, is at about -- to out was the fact I interior ratio the that biggest four second on Yeah. the it's in quarters the on two what are one, one. quarter, talked or I to in either exterior the three

it in because our less of So than little that quarter a bit of third the strength exterior. was just

momentum month-to-month the understand consumers John, on that trying to of active of within detail the this, couldn't is sort a pros then even or improving? of that And and be just comfort sense get is stable, but anecdotal, it more interior, And I getting interior?

it country, for and moving. that for have. part, confidence and I the of of nearly residential is And area mentioned the that earlier, part Eric, most an I'd all as say most comfort repaint it's, across our It's the we customers.

I'd You'll the a the interior But most say building part, inside excitement strong of about hear pockets some concern. growth. for there's our

Okay. Thank you.

Thank you. Yeah.

Eric. Thanks,

Thank you.

proceed with next question Hocevar with line from Please Northcoast Our comes question. the your Research. Kevin of

particular. we digits. Everybody year we clock, strong was ago, on business, the an But the in looking Australia the disappointment. sales rerouted double area here are, businesses, about -- growing at If of Brands are this Consumer

what I guys but is up said think in digits. you XX%. exactly you guys said Australia double there, international don't total I know

how the the Curious business? versus it So guys really of of is that much progress product we've environment doing around. well turned the of seems is improve the the taken there? this curious that I'm that everything have have you things curious to actions seen

terrific has taking Kevin. actions of running of Brian international develop through improved I'd And an and little an and the nice This job line. channels you we industrial seen say job did think say always start its distribution bit increased right not effort nice actions done very of a sorry, it it's really delivered done a architectural Patton are and definitely taking our They've those both, us. costs the out business, of I'm I'd bottom right double-digit this we've profitability. as the to team growth got and you -- for all businesses a for a that or leader. of growth steps with to nice we've a double-digit with that improved see right platform team. associated the easy job and really, reduced a fun, but expenses, mentioned,

plus is saw performance the easier it in it be the bit the better seems or single would like quarter And in within fourth FX it that then quarter. in the comps fourth terms but that momentum digits, seems kind It what all in from segment seems we subsegments sales quarter, low would imply to And of little building in sequentially. minus the like guidance third of -- the segment. different for a looks the like stall think are of I flat, we being the

guidance it kind up add XQ? curious thoughts your to to seems XQ like some similar all that seems versus there. of So So but acceleration, results in the implies

Yes, Kevin.

choppiness made of of one And GI going inventory able on outside to there's some are we and is of some accounting these businesses, there's markets these sell-through and so think build. But to an still inventory? that on -- see for. I that be the we're we comments this Or momentum.

yes, in sit these all sequentially, seen in in all even Al's -- they build in other thing challenging we've that on regions. global grew PCG think improvement the units point, I X the like to business times,

I pretty mean, have good So along here. momentum we coming there's some that

Okay. very Thank much. you

Thank Kevin. you

you. Thank

today question with your with Our line Associates. final & from comes question. of Please Justin the Zelman Speer proceed

guys. of Maybe one -- growth think good important side how been Thanks had there. Day, and to questions, you those growth nature Hey investment? from can forward afternoon. you growth of going making expected how headwind make in already But speak a those to apologize margin we you as you to addressed. just fourth as maybe much Maybe of Analyst continue investments that maybe is And SG&A you're And going business? quarter, the the the invest see can couple leverage investments? has should mentioned being the about that weren't much you if on -- articulate I incremental this in ledger. the I your

Yes.

haven't say try Justin, laid we investing. that what I to is, out amounts the we're

long will part of specific we're versus what get the leverage reps cadence customers, how to are relative quarter. we're rather and it's the of be term. trying the improvement the think that volume across we and taking new our put the because more on in as going a the e-commerce it's do the get others But perfect the what platform a end get we've into investments important stores them leverage may of I and to what I'm the in to in, thing know higher do. If year-over-year. to each we'd the an right see disciplined quarter. done course. at lower looks to see the through volume We managing on very not SG&A, not still like But, depend our we're get SG&A we at Some tell fourth of able approach fourth of going segments, how to range, If in in quarter we're go to it. volume, end investing of to we probably quarter. much you leverage We're we're it we stay that

you Justin, may And Yes. sounds missed it mentioned like that you earlier have response. the

here which we here Sherwin. the how run through And at this been that these think important to know is many experienced. I made of Al long-tenured on We've earlier, is we XXXX the very to it's before. movies It's build a invest. to point got leadership – similar

the tell would you, While the disciplined SG&A a work it – hits I in that and this. Al, line. there's very Al group controllers approach control with the other

are that along and look expectations high not this very is So these spending, we of investments. money with A level investments. come at those discipline

Appreciate Thank there. guys. leave a it you, and Makes just your I’ll lot sense. of attention. time

Thank you.

Jason. Thanks,

Thank the back call this you. end for question-and-answer remarks. Jim reached Jaye I'll At the turn of closing session. now we've time, our to

your our I Rob, about very came to hope there prospects we're leadership you, feel entire thanks and to follow-ups Swanson us where joining I And week. colleague into Eric through, appreciate Really today. fourth available Thank of XXXX. for contact very rest today confident and team. the your my the everyone and interest will in we're the Darr be you heading with quarter queue. for get along please, Natalie optimistic

day. you. So thanks rest your great for Thank your again of a Have interest.

conclude This will everyone. conference. you, today's Thank

You Thank you time. may your your now disconnect line at lines participation. for this