The Sherwin-Williams Company (SHW) 26 Oct 212021 Q3 Earnings call transcript

Good morning. Thank you for joining the Sherwin-Williams Company 's review of third quarter 2021 results, and our outlook for the fourth quarter and full-year of 2021. With us on today's call are John Morikis, Chairman, President and CEO, Al Mistysyn, CFO. Jane Cronin, Senior Vice President, Corporate Controller, and Jim Jaye, Senior Vice President Investor Relations and Communications. This Conference Call is being webcast simultaneously in listen-only mode by Issuer Direct via the Internet at www. sherwin.com. this be of at replay archived webcast available will www. An this approximately concludes. two beginning conference hours sherwin.com after call This conference call as defined will include certain U.S. forward under looking statements Federal and sales, respect Securities matters. earnings, Laws with other to only forward-looking made otherwise. new or information, result is Company revise as Any forward-looking the speak of date whether such and to on obligation no or of statement, future the undertakes any events, statement which update a statements as earlier the A morning. full statements forward-looking earnings this declaration transmitted is provided Company's release in regarding the open After remarks, session the will Company's we prepared to questions. call now turn to will I the over Jim Jaye.

Good Sherwin-Williams inflation for that to remained Demand the material entire costs morning, with Thank material and growth in remained you. rising availability raw failed solving is impacting generally investing and difficult everyone. environment future the on third fluid industry. quarter raw pricing combating persistently coatings in focused but challenges, improve. and robust, customer high a remained highly

customer to the challenged conditions long our these in our in demand for confident us strongly term. people, While take outlook we We're the more our our in and quarterly continue actions our even confident positioned the position that strengthen relationships market. and results, strategy, and

$XXX.X All estimated high impact comparisons consolidated sales morning and Consumer sales Group. Let by impact Americas with margin the immaterial me as million percent expense summarize before XX.X% $X.XX to SG&A The was gross impacted percentage points XXX to Raw by Raw decreased in material points of line, increases quarter XXXX single-digit our sales. outpacing caused X.X% specified. $XXX.X tax in X.X% an billion. an XX% with inflation basis top or lower a third material Consolidated to of negatively largely increased near-term, remaining impact decreased of availability the inefficiencies. price to Consolidated our XX about quarterly to XX.X% The Group Starting million. prepared and decreased commentary Group. dollars decreased otherwise Performance XX.X% briefly this in the profit supply the unless basis chain in numbers. are XXXX, quarter third with to the Coatings sales driven volume. Brands

million and quarters and respectively. third of included XXXX of $XX.X depreciation XXXX $XX.X amortization acquisition-related million and expense, The

consolidated tax Excluding before from these XX.X% a $X.XX diluted quarter year items, to share $XXX.X income profit in to per $X.XX million decreased a per decreased share ago. per share net the

XXXX, $X.XX both The expense and depreciation of share. included and third per quarters of amortization XXXX acquisition-related

decreased million first the third XX.X% from XX.X% items, EBITDA $X.XX quarter billion share Net was these nine of or grew of share. sales. months Excluding to quarter $X.X operating to diluted per share of sales XXXX. cash or $X.XX earnings per per $XXX.X adjusted in the XX.X% in

XX.X% strategic Americas mid-single-digit to sales related raw X.X% and to Sales supply sales Group driven volume Coatings exchange. partially sales favorable from price increases. The on raw higher price segments, marketing increases, fully resulting as material inefficiencies, sales, points the currency to demand, of material negative increases lower strong margin decreased in volume selling availability, Segment our Despite Wattyl Adjusted offset impact from offset lower XX.X% year X.X% the Group selling primarily as selling very price a and remained resulting points by the and decreased and by Adjusted higher by strong included comparison we partially Brands segment flat decreased Consumer percent continued margin selling a costs, increases. in points good Group investing price a from volume, to Segment five control. margin XX.X% sales, dollars raw Performance Sales raw divestiture, volume, segment sales. year-over-year in points growth increased in X.X% material, ago. price by volume, decrease and primarily SG&A material and lower chain related offset and XX.X% could decrease to The decreased to sales increases, the availability. percentage XX. not against of partially initiatives. cost XX.X% X% Moving operating decreased basically approximately the offset in of as and

cost As from the Company's inflation leverage price material increases and the volume, selling three operating higher among offset raw costs, were where the segments. by more than operating good was control higher highest

quarter over and quarter and our turn for to additional along John? Let with the on XXXX. now John the Morikis full-year guidance call the our me for fourth commentary year-to-date, third

Thank you, Jim. And good everyone. morning

update themes XX call. we our provided Let on the me by September begin reiterating

the Many environment more importantly, highly end pro-architectural not positive. issue. the our remain customers, and across robust is our First, and markets. industrial remains demand external indicators Demand

this to ready meet we're Second, demand.

continue to initiatives. in We growth invest

production today, next million we have XX and production capacity significant the are We incremental available architectural over capacity of gallons two bringing online quarters.

raw issue the capabilities constraints impacted The material our to and Our continue inflation. October in issue. not industry-wide and that are have quarter availability be persisted third

and how than we responding. has better assets and all clear We're competitors. and keep to very on in be are our customers me Let paint on-the-job, capabilities these Nobody employing Sherwin-Williams. more of

solutions. continue will We to focus on customer

with are increases actions of multiple across Inflation implemented raw businesses. our combating significant the aggressively price quarter. each pricing in We We material

necessary. We do continue will to so as

better current is add emerge relationships forward, fully summary. than strong value improve time, and with is with destiny My our experienced. control stronger continued results There quarter rather year-to-date. a on closely to we're of to to on work some to just Inc. a expect own our goes on exploring our Specialty customer moment, XX,XXX will from continue global shareholders. creation like Company with But In for comment to our family. all I'll to Jim's I'd no and to members including of which acquire every stronger third We availability shortage these avenue team, first, make At recent challenges a color our results deep thanks suppliers confidence Polymers later. we going deep our same sooner We our the solutions announcement

X.X% have of a forced events delivered diluted increased increased or expectations, of $X.XX million, share. we $XX.X sales X.X% While per net PBT outside adjusted adjust high-teens Despite were inflation, material $X.XX our EBITDA or still have consolidated X.X% to performance. to control XX% us per or up billion. solid adjusted sales. consolidated and year-to-date XXXX billion Adjusted largely income share $X.XX is our raw

eventually Even as in this expansion, unusual investments momentum make that we've and environment, And the our continued significant inflation will term. drive see confident will long to we margin over headwinds subside. availability we're

sound to the strong. backlogs segment underlying are reported that Group, returning quarter. The good third performance challenges drag sales. and remains material on is availability the Americas Now, significant raw were news a in In demand

improve up in improvement the supply and industry rates Sales high-single-digit will expect commensurate led significantly which was chain. third We was the with Marine, percentage. by Protective growth quarter by the in growth

percentage demand by residential comparison. business seeing single-digit customers a and low in repaint oil markets. a good in strong We're largest from business, steel double-digit grew gas flooring this and Tag's against fabrication

industry are return As resolved, for growth to to double-digit the this prior where chain supply delivered last issues we've growth expect five-years. its we levels, would business

New residential sales percentage. increased by a low single-digit

school up along permits of when the apartment raw higher customers being reporting paint Improving are Property housing a very rates. that starts slightly availability are pushed was management well We're of building our last improves. quarter. are summer. growth And a to out support since terms return New projects trending in tailwinds order variety seeing solid short material as with workplace, beyond travel, number and in supply. materials been should and the have

supply to extremely difficult slightly sales quarter in by Our expected, with commercial a short mix. exacerbated our interior DIY surcharge. the the the an percentage interior quarter. price combination and realization,in to result comparison, versus sales the to these longer business exterior was to which our part August phase the than double-digits in would price for as paint being February Similar resulting actions Putting expect better due projects a down business TAG mid-September a painting in and fourth mid-single-digit issues. material quarter. increases product performed the availability increase residential was X mid-single-digit larger raw X materials. range. single-digit of realization new from price finally, of down realized full-year perspective, high our building was a in of From our price reach the We third the And in taking are multiple pricing

We've continue to we continue e-commerce, additional and management actions net will evaluate to stores, with reps, trainees, products, investments sales pricing needed. XX new opened in stores as We make new year-to-date. productivity services. these new innovative enhancing Along

not off taken are these initiatives. gas foot on We growth the our

Brands sale in to XXXX. divestiture and percentage Consumer Overall, which material double-digit difficult by strong of comparisons American the the year-to-date. more Group, decreased to paint normal demand workplace, quarter partially out-wide Moving the consumers to returning prior who the to offset in the a business. growth issues, availability year, raw levels This our to was to driven wild was the the continued on by pros category, compared double-digits up and moderate North by

While more quarter. were the was below largest down of were impactful. impacted in regions, Pricing Europe COVID America, restrictions compared all sales level Though are our less region, in North Asia, in and sales Americas where positive the to the Group.

segment, material supply know, Uri team with Organization industry-wide Hurricane continues global managed navigate storm you and raw within work by this to chain caused our suppliers has this on level supply to As material customers chain the winter at ready Last, availability are raw to capacity me ample serve trends comment Ida. improves. We Coatings Performance third the in Group. quarter and stand let with more higher adding a as disruptions

single-digit and of momentum all and see high of food to wallet were customers. region. against heavy finishing. the X%. and up Latin the in the group in by America, regions gain which up wins double-digits our increased fastest and fifth by double-digit year. Price by with general I and robust robust, which of and divisions in comparison business. is third share new generated Group traction and quarter double-digits, region. new XX% Asia. by were were Sales tailwind within existing and most a equipment, majority customer as the quarter all driven cans the strong more for followed quarter Europe generated to growth. beverage translation growth across Every of every start the sales strong high segments, than division coatings grew, and currency largest by double-digits in in division underlying group, led double-digit strong remains industrial, Indexes North Regionally, this last straight grew will growth demand, in Sales continue with sales non-BPA of posted this general consecutive packaging, America single-digit quarter, customer range containers including continue the We a Sales Demand growth. for our every was gains. its in the

continues to for Sales remains Automotive pre appliances performer. by mid-single driven all refinish and regions. percentage. double-digit business a new regions. -pandemic are quarter growth. an consistent nearing all levels. the sales grew and team job do a were consecutive increased coatings coil in Construction in Our second percentage by Miles accounts excellent This positive winning digit at the led

of up largest region, significant negative Growth in installations strong. impact was products low Industrial in by on shutdowns a America, single-digit North New our double-digits. where generated division our COVID North America had Asia-Pacific, systems remained and would offset growth. was strong That related sales.

demand kitchen to applications. our New robust and cabinetry, furniture flooring, residential drive continues in construction products for

We've and Before outlook, over of to capital year-to-date. shareholders dividends me form $X.X moving in returned our the buybacks. billion to to speak a our little let share allocation

an have increase average price $XXX.XX.We distributed X.XXX an at of purchase billion to $X.X dividends, million million $XXX.X We of XX.X%. shares in invested

million $XXX for times. expenditures, We business approximately ratio of in X.X net projects. with EBITDA our adjusted $XX We debt invested through the a also Our million quarter Future ended Building to our including capital

expected that to announced not if are XXXX, early the Specialty Polymer close and Sica also acquisitions, sooner. We in which

architectural to Turning North expect robust American to outlook, our we end pro markets. demand continue in

expect We to the as to consumers normalizing continue demand return workplace. DIY

remain should Raw online. demand the will back material the headwind quarter, continue fourth the worst but in a come of expect believe, have situation Ida strong. is We we and to industrial remain to We challenges supply weathered improving. Hurricane availability

first quarter We a make-in-shift expect building inventory XXXX. anticipate until any do of in the and to mode not be

the of moved to seeing these price low XXXX to of target on the XXXX. quarter in We to net and up we to equation, consolidated XX% as this not said given teens, well by single-digit the realization will for And will material until put additional the XXXX. range. of percentage range timing to All our to year near-term. we've expect margin continue We'll XX% margin the offset anticipate mid gross fourth increases the expectations high pressure, the remain On that our seen improvement times, as up many quarter we've pressure in aggressive in last compared price guidance. maintain XX% into businesses our implementing expansion we side cost inflation raw from long the a the costs. backdrop, margins Against fourth since over necessary term sales be the meaningful recognize high any

be the to of sales, level. expect single-digit percentage. high more sales a above Americas sales the up and by at mid Group DIY We this historic to range With a high-end or pro to returning

Brands a mid be quarter. by We a be from impact as Coatings architectural of Wattyl Embedded expect to to Performance percentage, raw our similar percentage. by percent experienced the availability, is we third Consumer up sales to a teens approximately in material as expect to Divestiture. a X% impact mid sales down guidance sales to including related our businesses a in negative And points teens we the

the a single-digit percentage. expect to XXXX, we consolidated year up high For net sales full by be

We Group a down percentage. by be percentage, the and a up expect mid-teens waddle twenties single-digit to to the impact Coatings Performance low points be Consumer be up percentage. by negative including approximately high divestiture to X% related to Group Americas a Group the by Brands of

diluted share includes amortization Wattyl share earnings $X.XX basis, expense share, share, be earned $X.XX earnings and to divestiture an share guidance expect share. in we $X.XX XXXX. $X.XX. of per share to the per $X.XX per On loss XXXX of on to to year acquisition-related per range Full the full-year net per XXXX $X.XX for income $X.XX per in We adjusted expect XXXX per of compared a of

data your modeling points Let may me additional purposes. with helpful that some close be for

increases expect quarter. the in sequential implemented price We to gross our as slightly see a in improved margin are additional fourth quarter

on We contraction partially in strong gross the see leverage expect to the in sales SG&A, offset margin, quarter by contraction due fourth to margin, to our growth. operating due

making our customers. the enterprise continue investments our provide to that, enhance across We will ability will solutions to differentiated

well store openings and have Canada XXXX. and to as in reps, expect new systems product sales We'll and as around capacity focused We also be XX in innovation. improvements, U.S. on productivity

incremental home We the in embedded are full-year our digital our additional center These also guidance. plan in investments in all investments channel. platform

the to a fourth be of expect exchange We currency foreign quarter. in tailwind approximately X%

XXXX rate slightly expect our XX%. below be We effective tax to

$XXX million. approximately be We full-year million be to expect depreciation $XXX and to amortization approximately

expense our projects. million, at Future full-year $XX expect unchanged million last capex million. including guidance quarter to $XXX provided we be We approximately $XXX remains about Our approximately for Building, The interest

We expect per annual the by to share increase dividend XX.X% per share for full-year. the

acquisitions making continue evaluate repurchases. continue fit share to expect opportunistic We We'll also strategy. to our that

strong. team are to We headwinds, full-year even their we providing solutions solid of our inflationary results remain Demand our experiencing. track extremely supply are on I chain and to on considerable and customers. proud focus the remains deliver with

continue Our to customer relationships And have we capabilities. invest our strengthened. in

us That momentum for be We happy joining your morning this expect concludes year to in you I'd XXXX. that like forward to we'll to take finish our significant questions. the carry with remarks. will With that, prepared thank us and

conducting we'll [Operator please session. John this line question Capital you. first with a At your Markets, of Thank And the you. question-and-answer is time Instructions]. question. proceed our from with McNulty be Thank BMO

your or my comes Good even deliver whether cases, to that When raw channels, holding else? the your at particular in Thanks versus confidence can in moving for back into to Group it other impact speak and morning. ability you business, TAG I Brands possibly guess, somewhere that back you the you the some to that Consumer terms business it's taking question. in of look in had materials

This this. and that very about confident want is feel stress area important do really to John. comfortable Yeah, we and

customers. of confidence. I have why have confidence our in have, relationships have the the that demand We're how such that, and that blessed view business. living to they as in those relationships line that in And with has have confidence markets customers in experience, distribution this the we we our the we have are are backbone of partners We our customer we're this as and and we that Through point is are in sight a great experience of because deeper. sight that quite with of control and working that of are in that that growing the deeper increased. frankly, are working tremendous we're line need model exiting through chapter this would they the on our that working growing kind they customers The to, only the customers the we are projects working, closer their stores the have our reps with have

to And always that would other said business. as to begin to always so of and returned DIY the into the the business shifting back we've people sorry, right. you're We've segments And be some work. shifting normalize There I'm to that. here from expected might business there. back

areas very So we position down, go which the be be the other that up while we able hard grows market expected in we've shifted segment to ever that and segment might expect DIY to and capitalize, to always position, hard, would worked to. whichever Company turn to strategically

look So on residential work new able management, at with services, or products, DIY to when capitalize to we be hard you the those in markets versus or people residential property them. and quite very repaint frankly

level, is as look as with I happening ever a net me. describe confidence we our to see customers activity metric share So at at at as of every record coiled wallet almost for I record level, I'd our from say our high score promoter spring what's level, new been a the it's record activity expand. account would our probably ready that

accelerate raw with only Hurricane normalized. availability is to impact our similar that single-digit other If at is quickly to combined referred Uri, business. that. we up combined in excited it, due businesses our John This double-digits talked Al. and impact the we our John. as half on ending be we in really to about high that would I that first Hey The look issues make as is our a DIY TAG being we consumer, the Winter high of the be Ida, and the We'd about comment believe chapter a I advantage to low this exclude about due architectural will so is single-digits going Storm And fourth up third because were we're are to ones we material talked to on quarter. take

where capture of to John's point, their falls. either channel So going we're to on customer

That's I just inflation there's of that? lot know can employees, and been a question, with a professionals. the follow-up to And past. I one labor maybe issues never of offset kind helpful for in efficiency of that really there. also wage of issues environment you to labor the maybe some speak a a destination to in And always been guess but terms Sherwin's inflation, color. problem then around the helping measures that think to scarcity for lot had you of some about you're seeing of that How that your spoke It's

John, pressure wage might be to capturing you're I about that make experiencing? question that want talking sure your I'm we

right, get to ability employees in the store. the That's even pressure wage and

And start that with I'll Terrific. one.

employees, just turnover to that. the those the X%. We I'm absolutely is and over this XXXX store of factories, employees. have I range our I'd I'd to, had most rep to are would adjustments employees, between about, operate all centers would like retain rate important. to say fleet say, would really make ratio our space have excited in spoke point some our customer manager, that the both facing that that some kill critically in in about X% and our wage attract drivers of of I I to stores a as that the employees some And that and fact And in or say But rate those critical. distribution say,

that that, that our nearly to we people understand MTP graduate in these we weapon. down we've culture, to some accelerate we have that that the little a employees think XX,XXX give into spend in. experienced we've I areas, We We have, retain couple to X,XXX areas on while year. at and our element. a of got a to of John, Company. the and speaks other believe worked a really Out career in, the those that employees people graduates key we of over secret I opportunity you culture. Program we these a our and of a such bit graduates to to -- fact When it difference. in ability that the able that is them and hired in. to at because comes to that to culture hard come consider we time call to been have a XXXX P&L, we've this, our opportunity have bring and college time, number that an recruit it's organization, want own what in the I of our opportunity look come Company of look So make terrific employees business. in, understand to The the that customer-facing And we years important pressure means think that and ability And come a come our come they they our school retain XX that's impact for they throughout expectations. When terrific think We a run it within college can strategy,

And they is when employees look strategy, our us, through move of TAG, they important which XX% now the and reps rep our aggressiveness. they their you an Importantly, grow program. stick force, in in understood they And element this at, their that example, with organization in our came for understanding. grow they -- experience, Those through when of

looking of X,XXX they're Company. opportunity and our I'm look Program. MTP employee the And and TAG greater of turnover are more of the into drives And at if -- means you're it is have comes XX looking more XX% and the broader experience the years retention with We looking our so to our organization means then great our our sorry, retention. organization, at TAG that than at field promote they're what to will, to from you employees leadership up, what when -- within -- that from

of about And make are so solutions differentiate we're when from competition. we're to to people us bring in that experienced front our better. talking trying These them customers, to help them,

And recruitment the the to us. and don't take places so fight those and is to to we that from received our external Forbes, awards. career, been recognition of at that We recognized the make wonderful a people and a begin all are of And internships fact those in be look fight want when What a are we've as of. result, really area you diversity, of we've culture we for part do to a to care important better customers. positioned

focused I'd it's an say to really area it's So continue working on. we'll well and be

much it. Thanks Great. very Appreciate color. the for

Thank you, John.

is Next of with Panjabi your question the proceed Ghansham from please with Baird, question. line

mean, including John, along side. -- including the been on morning, obviously supply-chain you. their the chaos everybody. Thank has home-building supply Good your this chain, customers, morning persistent I report on

we should new As tag, about specifically air referring from Just how if guess sub within demand? are bottlenecks I to your commercial. of there's drug have pockets that because you about cycling customers through. And maybe various verticals the think you solubility, and think [Indiscernible] even other

and say with. raw into a and those impacting say Because raw new projects really impacting they're Ghansham, examples use I'd it's this, interesting multi-family expanding I add There's materials Permits it's materials, not couple the well paint residential, though, are up would in that. of just lot also customers that's very that commercial. or material the in would I strong. not dealing those a as Those in two it's those. right, go just remain are markets you that materials that labor new or of the you're pace we're of residential those that

would some have existing are customers there So to but begin new that I I of to the activity. ago customer with, understand shareholders the grow encourage we a about our commitment to wallet is what mentioned and our share with But only moment the just there. challenges not

is but growth our And that customers this about penetration recover, fronts. we we favorably with that the in only there. there a number different We're begins those So not but of there, this excited for us terrific customers we as new the look opportunity with market. at I'd in existing market think in have, position will position say to

projects So customer a been the as when that some of feel of this pushing further result back further I has though as and supplies.

at just out a supply. we're than We broader our casting net will competition. as But looking existing we customers our that believe also well. First, we're

add that. Hey, just Ghansham, to I

If you look our below where quarter-end planned working and a today, were at to capital at inventory our we're gallon. significantly

the of year, we serve customers the get by first the inventory. going So better can keep material -- as our building a fourth on in gas our ready. quarter. on of inventory on availability pedal we every you those pound those raw the And count raw when on plan we'll to be building position If foot our jobs us jobs improves, the mode capacity, have are get to be convert architectural of architectural pushed We're shift a and through of in back with to end additional XX to million can coming quarter material we in XXXX. on those make gallons

me segment goes point that that I Let a it's great Al made earlier, to Ghansham. back build drives on, don't We makes. It because point just our discriminate the results. which

So going and it make we'll another if if it segment, the in shifts product raw The is be there. materials, take those New And to push we'll Residential we'll out. moving, into we're there precious of to raw fact material profitability aggressively to in be leverage a every shareholders. for that into ounce position segments convert our will able that these something we and leadership as sale have

fourth which end rom at velocity just your versus thus you're how thinking or the to now, a raw it measure I'm because Okay. weeks and later, just trying characterization the the material is of curve.. of availability And am give Thanks. how have far etc. you just lying you curious few cadence past majeurs, just a months evolved of my Can force you however has as want maybe to define for quarter, get as question. around us second four of about allocations, to the into September raised over supplier the guidance. I

a, faster like consolidation say Yes. I'd make strategy I'd opportunities ours We'd as that suppliers along and there I'd it the on an years said suppliers. When for for through also as on it's only that alternative were we become customers we've suppliers. working strategy our for possible. productive to say bought current consistency we aggressively quality for that will, of raw and materials, in have that had Valspar, includes that suppliers working the ensure to our come our with to you say if to them will we our bringing qualified had all same that's customer, working accelerate we've help and of improving. on not us goal and products many that a as efficient

So very as it to better, and ensure continue I'd get we're to expect show our we taking customers. it's side better, proactive best on in that supplying to describe we're getting it steps in our

businesses. just our materials we doing at first to end understand didn't high half. happen look September the as thought the can XX%. material costs so call raw want we we And things outlook XXth that. our expected into half, material I And that, I low you on Ghansham, sure our our exactly this in were first next on did Back the that raw half you to second talked and our about pressured and September to take double half imagine up XXth, year. you cost Coatings And to material of through business on second cost year increases happen. going than add our make from Performance other to to the chasing They of the raw be commitment if more way certain I'd the we our that up teens raw

as has they little have with talked are not going customers say early discussions. each price we these we're over the material waves, these back past, offset TAG X% committed as full in out above disciplined year raw increase offsetting to about a in Our with XXXX. will into put done the been to that expect as approach, the seeing we're XX inflated could to losing we to regions our so when increase we convert get at costs. And delay about to we'll our may in the groups are see And price a fully we we've but where that start of margin about and third waves, I Came September in teams rows expansion past, Xst fourth our reminder, Xst seven. cycle came out of the February John again in And we this we're surcharge August it. come to just a this moderate, in we as four. to bit, out three improve. a of

Thanks so much.

you Ghansham. Thank

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

Thanks very much.

Morning, Jeff.

Hi.

it Brands DIY similar what volumes third year-over-year, -- to pretty we're Consumer was in 'XX? today sharply XXXX the down is is the Your and the quarter consumer volume of the third in of quarter

low Yeah. -- low out Jeff, we'd to back up if you impact be the of flattish Wattyl, single-digits single-digits.

You'd similar our expect a fourth comparison quarter. in

I order which increase, profit, can, in XXXX. if inflation and adjusted a quarter material -- earning quarter if roughly $XXX the in will you third that's cost your So Is of inflation. don't raw right? offset magnitude have price offset you returns now raw be right? you because you even with operating grow XX you that much, material Should million the in the say of like were what think third that very you of order like can All

sense the that a in In lag. Yes. consumer's

is that just be and with lagging consumer in that. So expectation if timing, we're to TAG our And quarter, in group the come they're up our up. single-digits high it's going catch price back to is so fourth

The get chain material our Because availability raw is as know, having better gets supply embedded you next is, on as do a expect We margins. supply we chain in our results to Consumer in our year that's pressure global efficiencies. Group through better. flowed other the part negative and Brands

we ago need it's groups consistent We've I'd more, to as made if Brands. just regarding a price, certainly in all add coming, Consumer will gotten it. we point price, the I that it's Jeff get some and moment across well

Okay. Great. much. so Thank you

Thank Jeff. you,

Mizuho, Our please of your Parkinson next Chris the question from proceed is questions. with with line

very for Thank questions. Great. my much you taking

gain rolling per, competitive it's U.S. landscape by to to industry But environment. pricing quickly into any from you're appreciated. continue So greatly as in you even clear trades your 'XX, to the comments your through today. share base staffing Thank what your on hearing to and inflationary navigate the region ability as And stands just overall perhaps can pro comment 'XX will it as the efforts customer continues and are be you.

Yeah. Chris, I'd say this.

make we I that every that solutions customers determined help getting that to determination price. across them to more our we have a money. to that bring confidence and in have. We're First, the want We're continue business to reiterate do commodity, we not

to get So profitable customers to fatter be situation. to something not advantage of in model to consistent which a or We're is help successful. trying solutions and we're our that stay our for asking take

as to Sherwin, the from some marketplace, industry back brunt go perspective, of we there's an out people that you felt when think well and and different didn't our I go At in people, dynamics price. the XXXX, If with

scar And experience you through of been I tell leadership -- tissue that. team suspect from think the as a I I learned did it from a has to it's or regularly like is pricing that it's it lot. would team long price. bucket learned we and means has brutal. well. We've talk does, a the that. others get And leadership about moves And lasting this we the raw long brutal the have And when material for time. you what

arrogant that. going me Al help the money we're that so will hear make that determination, and do from not in be customers And to trying our We And with process. exactly confidence more to hope to this It's I But them know we conviction, the and to a you get you it. our have ability this we price hear we're responsibility when on topic. and

that, is high. do think to we very

hearing our doing profitably. that far about to our proposition to to And are on do job, marketplace. and business customers. value our really As our what we're it long continue yes doing, is we're as to as expect as, competitors pricing grow we're in we But what the focused

That's improvements, very XX% on the helpful. as progression price just updated XX And PC today's across and you back speak. and of some it quickly just so as to on a follow-up, thoughts about it's costs, general basis, you But margins, a thinking back little XX -- headwinds the market step taken bit screen when off have a the to relates release. radar any perhaps, mix. OP the Can down that to break to goal

evolve Thank Just any once initial again. to opportunity appreciated. how going that's be conceptualize on, will how to color you greatly across and you recovery the the long-term think

on confident, Justin just [Indiscernible] September go call Yes, in let I'll and XXth progress PCG are Group XXXX. are Chris. what We made some said We still President. good

flow-through Second half bips. operating XX.X% margin up XX. strong up X% and over XXX was our was flow-through The up was with sales

raw it's So I I but was material times rate in our of raw said stronger and half dramatic the half increases. the versus materials second the been for of increase seeing volume, has X first

get know out get with continuing the rationalizations, our and again. and of we're those in there's going low maybe raw this of depending fighting us I operating is public, what on there we but on We're rationalizations ways to doubt, material SKU improvement, about to set it. high efficiencies And But in a also a incremental timing comment the XXs. moderates piece still price to or team that those improve until a year, I pipeline. is from US. consolidations, longer-term get $XXX platform projects million we up facility rationalizations, one mid-term, have we raw on about is they COVID we'll the the through short-term say that the we're not positively the And pricing So third margin would outside talked see talked that, mid-term, no for lot and we have fourth On moving teens, the and top SKU increases. back our to material to of employees margin profitability consolidations. look facility and our improvement expect and of platform rationalizations. opportunities catches

But adversity facilities the the Chris I platforms will point out we've our I just the resins other through the opportunities you raw I consolidate some the organization, There those mentioned opportunities along. made The But consolidation. think that material identified about and earlier, of the that to proliferation more mention the strong best. are to brings opportunity of point and about that there. the efficient. be all there

right to going though. We're of way customers them will industrial range impact there this be margins We're have to and in able our on business. bringing to All by do a confident significant XX% our going there. March We're to the for operating value. this with get of to those ability get it

you. Thank

Thanks, Chris.

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

you of Great. that kind to, material My or raw of knew do PCG. to the couple with different comment for it do the market potentially or is we've because of you backlog into kind lot has when of it question in Is of us, a lost skipping COVID make your backlog TAG up Does if on last dynamics just quantify go of material just Maybe on and Thanks a that what maybe visibility first Maybe It's and lack Thank is have you my you with of grown and sales taking help you. of question. lost? now in potentially there that. DIY and on availability. years lack resurgence, availability. raw way sale not the because demand. can could

gives again, professional CRM mentioned the Arun, to tell our you nearly a what say that our would you ever we've gives insight we're is hard. too not confidence going that, is beat I what's are are how to insight we customers drum that, that with have what control here of that segments be. model about growing mentioned and gives ever the this a across system we closer, approach when The every have than us about teams got going fact I'd us with And far in working these insight. I confidence into understanding us TAG, have, and one in us the and happening that we distribution customers. working But as it's backlog. fact experienced that to their the our there collaboration they closer business, earlier

probably talk specifics to ever to going and they not for any you jobs, to like, understanding confidence. spring, We're comfortable looks line that getting have any further is that great would So numbers tell that bidding out now, if doing what have their I are would you had in lay we yes, tell right but now with painter they as you than that probably next that they're summer. the next winning out people and with

are are there on an the news TV is turning that listening issues. and absolute some there the so understanding And of and what's going People on. understanding to

Ours is unique about you since from architectural perspective. TAG, a chain our When supply asked products, about think you

we or and we year keep learning business begin us high. year product customers with that people center our the primarily from different that September, the next points Storm competitors. The better Ida them getting Hurricane the scramble in issues in on about and and in two top the as get different and distribution us do Winter facing, pace to our back those are they go as impacted that the stores confidence our we're Uri progresses than and of the earlier made And of fact February supply that can is chain most issues that are most that

stronger out of loyalty this to a quite yes, backlog enjoy going for our there's bit with customers. that of come filling we're more and we'll So and

so XX, assuming Great, on Specialty each year, raw second you'll of markers the Polymer. and about to recovery some DIY. Is have have growth. 'XX kind it But of you on next by improves half so potentially there could just us some or material for see thanks. And give thoughts then may initial will if full-year demand you also can think in here any segment's availability how stability like I you especially get looks your

backlog rate yet. a kind -- than other point very of I customers, probably data than is just than think point, to there they've that give longer when We're Arun, I that want with comfortable, very is you going our at share we any Well, to deeper, kind that we're at confident any numbers backlog. talking back and But this growing points don't not faster than longer we're seen. right any growing now I'd of think

that a provide will at later information We date.

Okay. Thanks.

Thanks, Arun.

Our of Vincent Stanley, Morgan next please questions. with with Andrews line your the proceed question is from

some your catch-up just just watch-outs having about that think you playing about guess of this in to first to Stephen the that back Byrne we some deferred volume of with have? the or overall quarter. build do of amount how there? deferred inventory pairing it the maybe actually And of Can that for the happen in what key phasing Vincent. mean, first I half some volume? on I are comment

alternate an we eye on I to help to significant that the talked think on but Steven, we're keep not can every suppliers rock we suppliers expectations us find have John the availability, demand about. our looking just existing meet

Like on in our a forecasted TAG this make was gallons. an in fully convert and kept where the be consumer than the every and That's somewhat demand field to it to get the can demand, talked make true possible So the first on the customers the to to lot the capacity John the side to dependent year. head-on. inventory to which sure material our get ability make in both investment we build season that is as to then higher the raw our can build sure the fourth quarter staffed. quickly factories the about, to in inventory materials we we side as meet We entering it have half going on is increase raw

so it we important we're in our When did example. about why confidence centers, price, made could and think have made: that respond. we great our that our distribution that's I And -- point impact gross keeping we in conscious on that talking the margins, that manufacturing decision a fact Al that's is an that the just labor

raw we mentioned, so those Al convert customers, that about that. fact material talk supply. we'll The t Our making And quickly. we're can available, that investments the as openly we here as become

you thank Thank -- you, Steven.

is your Research, question Truman next with please The questions. of the line Patterson you. with proceed Thank Wolfe from

excited and John, looked Thanks there Johnson good Hey, last guys. like that Nick week. my taking were out you questions sure morning, Chubb I'm for

So performance. great

a on chain that all just Could major Ida? the longer mentioned your facilities relatively Texas but than winter the prior differences were recover that a like you call. Or Ida from facilities update shutdown the to it supply come So Hurricane sounds is compare petrochemical you in some and any improving still flip contrast Texas recently bit modestly Storm.? would take there allow they quicker? online the little to Are maybe side, storm on

come then Ida there's Well little about Why is I'll briefly gaps. bit in if I any talk Jim that I think the situation don't a have different. and

good Yeah, morning, Truman.

that here, about at to and pipes if the talked damage all of on Texas, the would I about throughout just freezing look we've damage more, based that year we've at As was the say, physical facilities talked length. you

what was a There significantly. at power I recovered think has to facilities of play. lack was Ida, more which

for People offline, preventing facilities, supply, these really that out a is help steam, You important diverted that with the also of saw like had water element utilities lack production. that in which things to producing produce even And were had nitrogen of example, other that COVID nitrogen we nitrogen that in to pandemic. are some a oxygen key to explosions.

right, Louisiana, make say progress Texas just go So the think ability the ended The I manufacturing, coatings we Sherwin-Williams particularly we're or exactly and in a Again, realogy and I'd key of in a those, that either industry. gentlemen. you're impacting not other the Company, little thickeners, to bit facilities were but point different paint in and the two. but that there making here couple of fully as recovered paint. forward. not dynamics is Yeah, still the for key space, products resin up for

in sales to had little I'm dynamics just you but just there. to differences, regional you all this East, I had supply unpack the the then Okay. in areas? and trying all the to it Southeast I'm more in divisions, product due believe divisions. a Southwest, directing And growth, profitable understand to TAG, Midwest declines in chain Canada, Was bit. sales trying

say it's issues the are across availability that just Truman, I would the chain.

new in And the would in of of focus a going didn't I Southeast job the shot But Canada has think And Southwest well, a well activity, outpace They in as division is the say, we'll see I division Yes, to account gaining we But I you Southeast can on level at a if the segments. and on division can right back see did. performed and division. on growth. you at focus all focus past? and mix the Southwest have really this team availability through a -- great I'll wallet, is cycles having And on what have and think our past. executing the same come I them. we you the in take growth argue share right doing outgain determined will Marine, well. up of a increasing at it team customers Southwest impact a get higher than thing different Southeast pick and our with

Fair enough. guys. Thanks,

Thanks, Truman.

line comes question from questions. the Mike your with Our Sison proceed next Fargo. Please of Wells with

get and areas? over little math Hey, the a would all all materials guys, were XXX or and you how given be raw raw materials be other to to shortage you good morning. heading if I there for million able the XX, do somewhere strong actually that's need If from customers able the work you maybe did right, in, coming your is in would to into able demand sales that

Mike, just to the -- be quoting on clear, impact XXX you're full-year a

For with year. Yeah. that. the agree full I

Mike, that question. labor are control their to stepping And product our into products. the middle-grade distribution are what products this that relates -- it do really back higher developing as we're strategy, Well, more we're up available mix say work these challenged they're to the there and sure. help What out, that When and are some that keep sorry. in model and a responsive challenges Again, more. finding and there to customers be question right they learning I'm but positive with be, they shift may productivity. more think to the earning a grade it's for are what is them, this, having we're And the would I productive used a and so our experiencing challenges I -- stores have I are coming to we is our advantage. their who can fact where where to ones customers serve marketplace your now

accounts mentioned that and be on also be uniquely So think but capitalize that challenge, I I'd that. say to positioned able new share-of-wallet. And we're we there'll some to again,

more -- doors mean, not we're a aggressively to opens going and We're we're retailer people attacking to to that come very just other doing every we're just be money with us trying hills. make not protect not and trying pursuing those be we're So customers people people's business out clear, out productive, hopes ours. that in. help to I more just We're day. are

these competitors. so we And more available, they're business. And grow customer committed we add will, through faster incentive raw programs, from than confidence everything is programs, as to. that's have, what our we'll great have the have, we will programs converted And materials grow that which we're capacity become about that our it available, they is and everything have growing. And the we

And it. quick Got follow-up. just a

for lit a are excited Thank Sunday. for how curious That's Just on not you. big you Al.

Mike. Thanks.

I here. us. you, amongst know we fan anyone Steeler don't Thank let Pittsburgh in Mike. how from

Next question.

your with the Citi. P.J. question. with from is question proceed line Please Next of Juvekar

Protective was do today. Oil coatings approaching your What business? from the think back terms in that up comes expect do energy of high-single-digits. are you business you Marine strongly prices and demand? On How what, $XX

We and that very not been We've future, gas. transparent to for up We think we've business very gas. strong and just diversify Demand very that will our and picking a is part need enjoy oil important believe about an We hard there. further the there. it's position be oil though P.J. of working it do beyond been

into on some areas, opportunities our when working flooring, been There's infrastructure pipe, on. well other as at waste be you that key that these the segments. key lot a we've water we of been hard coming as areas focusing penetration look other really such And down water. have the as as might So such of

and as in expect can we're oil that, hard Marine position in adjacent penetrate. other very good assure there well. you and Protective we to these we're to business, our having So and But markets continue very gas, markets, rest focused success

remain raw catch companies catch Would up based different by fully up? will not think expecting are raw mid-XXXX? with materials. Great, and go great. oil mix And you then be here, up on raw here it their times at materials you from when early be it were do to to If or XXXX and or product paint materials fully different would like

in with we'd the the additional I earlier September be updated materials just plus about XXth our of on in Yes. dollar. P.J. chasing for we've guidance increases with I increase seen year thought we year, on it offset call through the talked a our raw the the dollar that we'd end

early we offset XXXX. the margin, get our change gross It's early increases, moderation dollars. take plan seeing you like to is XXXX, is to no can materials That other but going our expectation in or before means top I you in nothing, the in some raw material -- start in our early. think we'd improvement of out on do it we with idea what in that if saw go if XXXX

you. Thank Great.

Thanks. P.J.

you. Thank

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

for have make or the to a get of deferred Hi the some on that going here. you had the pricing the time or to available. sell to cases, didn't raw at up richer do you short Similarly, wondering sales might on product guys. material suppliers -- mix deferred do have those the you I'm purchases? in customers side, at about actually your Thanks or there the was in the guys I'm future where I'm that question order, curious both you

some Bob. of both, Probably

to pipeline. this it's quotes wonky I best year that think a we in that completely that in we hard have though the the environment. It's do honor we can to to such try do

we be trying that transparent just side that our the get because of customers, supply some customers can chain are having. But with other some jobs understanding as we're of issue of as because to moved. our not So it, paint the but of

So like. we out figure closely that I customers would say looks we're what work to pricing our transparent, with

you're customer there handle base some You Is to pool labor be Do your of won't going have that, backlog of be anxiety to to there you're sales maybe build because able into that to that. quite noted the the that? fear is healthy, any you going surge? missed

not think, our we talk customers that's existing our and why going with we're to I customers. our working it's when with Bob, Well, that, work about understand it's important to customers just

to it business, of the absolutely with them we more that So way our business, incumbent help is out in we a the number possible. to sell its run And products them we growing are do efficient upon and efficient. us the helping share with wallet just them customers. them which the time, and at as more as the we efficient business new to same be run of there accounts That's make that growing not

increasing look view many think by the to this customer. Its might the just growing in times that market, I the them side, during understand we customers well are is now. but that if from surprised the I uniquely that not it the Promoter hard on But and you the think I will, that. That's that in And loyalty wholesale we're right these for working with these realize do challenging So customers. DIY actually why we at we actually people these stickiness, call be Score, really positioned have as this market. a Net

had that that we've growing in little their first fact, that lot and and bit we're or have doing customers to with working we're time, Some for the a this. a they business of with get them So we're were business ones through those touching, of maybe the

that's take possible favorably going that to our going future. to to And to we're step happens. expect sure We play that make every

is to what Terrific. sport baseball And looking world starting people are where about. talking over tonight. the I'm sure series stadium a not I'm

are Astro's. we those ready for So

Fair enough.

Thanks.

Bob. you, Thank

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

guys? Could Good just be Thank morning. Afternoon you bought Nippon you. Sorry. John interest chronology in any for France. that

No.

or clear. down to or earnings Very flat up on would QX, be just or And expect tag QX. in maybe again you

on dependent When you really issues. QX, look at it's the availability

against outlook, X%. We a on are last price certainly we have more in issues availability. the quarter as more We'll fourth based the quarter experiencing And the going year was fourth-quarter comp. similar But of a tougher impact up starts up fourth those off, quarter. current our have are

The think to from slightly, year. on last a percent, number going get of to margin to close I top get flat, from last of going dollars -- up what not to margin to top hard on it's probably So been standpoint. if year's be hard be it's a of but

Understood. very Thank you much.

Thanks, David.

America, of from Our of please Byrne proceed the question Steve next line is with Bank question. your with

that you wanted in those end on bit TAG. Yes. to several would I commercial of developers, developers, like are are new you. Thank residential that share stores. drive not walking how markets, customers into seem managers, little within property gains your It drill These a

go have commercial And that contractor, higher have your things get about driving lot than do talked contractor It to make to s. You of relationships product. that. lives - seems stickiness so don't your much pro pro a you the those stores you are for in with easier they John, to

it of share your homeowners to And my question what to the market the key relationships end driver gains stores, markets maybe is a able secondly, for is then value level s. have to proposition with. for be for select really have So you that driving higher is, one your on commercial these primarily you product into store nearby

I do the might role are Steve, marketplace. business. there way it at ecosystem. take look a commercial, and a the I is it's stores very that this to Yeah, location of to We've leveraged residential, do maybe our the play competitive yourself. for we exception in think aspect advantage every healthy important that new believe idea They simply in a an

there that. little beyond willing I I'll bit to lot the are I'm you give there here. me more will a tell that share the a drivers talk about talk give so highlight let and than just of I'll a gains of And that, market then about of some you you but

at a And look you there. you of painting store for market, labor roughly about cost stores. any first let's represents contractor. if talk, locally cost the of When the XX% given of remember all, that you goods have of So

he realizes wasn't whatever general might manager, painting amount rep store a you like a as that on wall have of he done an the of the right in be people that because of That and market commercial the that be a contractor dry floor a where is and considerable directed that responsiveness, one men customer contractor given some look whose responsive time whatever might you as a our paying people and product couple and be particularly that local right COVID, market. face, of the store, Because might something or by because now Whatever used painting money there to from now situation got the he's the or that project or example, And area be that's that taping project commercial able have days not at day that of a A on store in on might We it our respond. And lost. painters paint. in there to. store to they rep to are lost. without to have might you might our delays. move contractor's to number to in turning substrate be. our to another

cases role a more do you with think I accomplish of do gain, stores, to stickiness we you there’s understand a the says, doesn't I stores those these and yet. that XX, run theirs to training when to the that questions hard that that in who it speak recruiting about. And that leverage goes that part we without and that up in what we and sauce products minutes advantage to takes try and that we van and customers I them every calls are XX we there's showing so away managers now And managers need to well big loyalty that would secret are so that a anyone that's something we efficient. play, the just facilities. can and worked with be And to store's and when across that could graduates in are college many segment these assistant come we place, I go significant built, our be customer believe and asked, are. talked help respond, a back goes We're to our with beyond that what customers our relationships to and right probably try to we

in and about are to part So that That when just they facing our representation is we can our of them these a what to margin partnership earn and them. as more talk being a And that a is through with result we work as of from contractors to customers intelligently believe not loyalty customers. the short-term. supplier. our business, that, how work a about our of areas we're it talk a part that customer's ability blessed demonstration absolutely how and help That's local our do more we key that of with compression in such And

smoothly. architectural having to as color relates about how in technical commercial very that I you're field help any As very project very talked can in contractor, situations that It's available, we this the to have goes given customer broad. if from broad, product else the people not the but few Do people right, technical them able it anyone market. to in is be It's like the that reps, help the to We be this. to do one start-ups mentioned the grow everything we One may reps close another application people, be that with New does Residential that specifying. you ecosystem and is. so

way owner architect, the process say understand our that and all specify a when with talking not to And we're value all covering we to in. variety one those come hope It's And I a of gallon way through. just paint? each people of designer, from the the an bring. decision-making sure when just door we very we We're and ways in deliver we're we're so that customer, can the is through in customers make a don't ecosystem. entire basis know getting to applicator aggressive those And a of talking about open

that away. example minutes excruciating it minutes XX. and is, you do that being And think to more America at look before being you starts a sure I'm five of question analyzed plateau. in in away, drive to this store how of XX or John, you whether, there the you've North much value versus could XX growth mentioned put revenue is -- when thus, how many to detail you your footprint stores, still

is that look We'll stores, when at the markets. into comp those store also but we Yeah, right. store. we reached depth store. we tell faster and in have this, a will store new grow at looked We'll We've customers you're we've representation, those new markets. the any where add where And market markets considerable if grow a that move you and in we've, these these XXX or it's stores, great market, as the So and we'll I well goes more or there. stores. of some not And these markets at adjacent Atlanta, we And what over as Cleveland saturation that would to large out looking Dallas, these and might volume take yet result, of of in through grows a some or existing as have the the it facilities store. happens still more the new visit in We're

that makes at store sense. the from So see we'll stores. -- next we we the that next it X,XXX and mile mile-marker will signal think add X,XXX stores not will as but to of that us to When can is concerned about we hit about. we're by decades frequently But then that's when X,XXX, long count talk hit And you look I be X,XXX them as away continue a marker we're point X,XXX. for we saturation we

Thank you.

You bet.

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

Good afternoon. Yes.

might to Just the getting was or to flip I'd seeing not related of to in among you're of been whether more chemicals. I had that and the tightness inputs one the lot of on chemicals. specialty be examples a for raw upstream maybe to of which curious That lately peel know side, commodity onion, have October as sequentially categories on in here It interested be to examples year-end. dealing seems wake worse well. was your we've And Ida more materials. then layer with Uri as hearing whether disruption And you you're hear been across cost And relief But curious disrupted. in seeing basket. into that specialty I

take I'll that. at Yeah a Kevin, shot

data second quarter got That maybe on third about over resins, the up September, If at begin I that those was terms through of prices some of materials, have what that with third really forward recent sequential in quarter I'll quarter were we fast raws a have you third settled, If in all the look talked versus -- monomer, and more elevated quarter look all was moved. major was we categories are the worse we year-over-year. the that highly still the packaging the So XX%. solvents, of

look you lot sequentially. not Appoxee, well, whether If at of feedstocks ethylene, propylene, improvement, so and year-over-year it's speak, all elevated to HDPE, a these

have ticked as may a sequentially of have two, well. bit TiOX and these I down lot. penny We're a also think steel seeing moved. most propylene not or have a whole but increased

of let still earlier, I to October, think in not Al we've seen enough the might have but -- us some fourth in availability seen we've inventory in the terms there, improvement probably build said quarter.

meaningful couple plus quarter again, really a fourth whole level 'XX lot You look until don't And the we're to be of similar of quarter. inflation of it's first going to improvement months fourth into a I of around see the XX% 'XX. of in type

for much color. Thanks Okay. Appreciate very the it.

Sure.

proceed question line your please next Edlain with Jefferies, Rodriguez from the is Our question. with of

gave you talk wondering, you have Thank quarter, for the about I visibility you. guys. afternoon, guidance. you fourth Good just can the the am like

change Are do next your can two visibility or set? auto based or much months, volumes still what over on November. how have? is you on flux So in more in depending book less and you the especially happens

dependent Edlain, disruptions we about, as our John other the place have quarter quarter is have in on we've demand capabilities we so and the and [Indiscernible] I are and it's -- how capacity, people the there. no think talked there's there.

get make we to every so So now. the will about we customer and availability just it believe right shift gallon

I Thank have. you. all That's

Thanks, Edlain.

Partners. is proceed of with Harrison Please Seaport The Mike question line your next question. the from Research with

Hi. Good afternoon.

product in. sales it your elaborate You sense does that consumer put that not marketing that? noted and think don't cost we're to higher sell, be you about controls next money assuming much assuming some help place I'm when year business. have could sales in advertising costs but make if those enough Could you normalized maybe products us you marketing how availability. and to spend on on

I products in We efficient our get Yes. things the -- get you're send reduced leverage XXXX on if advertising, And marketing on don't consistently I doing we the right, it for We you is. one-off outlook volume-driven have say much of -- message. spending more and items. we you should a but did non-customer-facing nature, quarter more that can't look would in what quarter, think is of have to SG&A be in a just on mixed giving

better our margins going got for how how of and approach a idea group, at totality really we're gives think sales look to spend the [Indiscernible]. us SG&A That progress. we I the to

then that. the will position with we to market. work we'll it Yeah, invest as closely customers of our do grows and And

opportunity though Mike, to were our said, that pros continued as in as of quickly and being want invest That we off our paint the ground as down, retail partners dollars is to some we at the even make getting sure needed to.

some are shift mix. hurts time, John, question's pro positive productivity. you then at mix probably same DIY, And mix shifting my other your the seeing But mentioned on products you to lower higher that of some the from improve grade customers,

So and the neutral is is as decline? a is we of business, headwind effect it of think the mix right from about -- margin the there DIY a TAG within is or bit little pretty now, your

in believe continue more playing The I'd successful, that, we between one higher-quality that money for learning helps do got And that honestly, because the professional that these can and they with we're that. customers, you've to -- you that say more be are quite should on they're a products and Mike. it. Sherwin-Williams to takeaway they're more likely make contractors relationship with it's neutral, part profitable,

Mike. Thanks,

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

of that bigger raw into it grow a is TAG consumer Or than raw PC. decision because impact paints? go business PC Is go Raw prioritize materials which ones? afternoon. in into made that scarce if on had materials to so, you of types because specific a structural and Good those faster. materials And to that

TAG of tech. were the consumer impacted than specific impact Ida what what think over on customers. and by prioritizing other TAG related more I products and raw we're because but us to that not that did material It's Yeah. It's don't materials more getting specific the Hurricane impacted into is it appropriate, PCG. raw

it get just coming are then that, that XX volume Does you'll kind of you on displace wind bump as that's X that capacity better million X, product really of or project? Fair to where B or or a as today, enough. on the do so gallons nice got margin you've soon up. grow a or X short And capacity, or a is X maybe new does things. get running you'll multi-year X third-party

to We're growing into want as as and possible. fill that quickly

guys. Great. you, Thank

Thanks, Duffy.

The next ISI, of question the Evercore Melich Greg your with from is questions. line proceed please with

a the availability. the progression guidance Thanks. on the of follow-up to I just as had raws

that I the quarter High like right? headwinds it expect in a be from raws. volume single-digits? Did get So fourth sounds on you quarter the standpoint third the to will similar

That's correct.

looks back acceleration fourth quarter or like bip XXX be the sales year-over-year. four so into that could the I it guidance on And in if

price, So all is or say a mixture it combined? the of fair that to mixed that's of more price and realized

are Yeah. full mix think the price I'd August combined. impacts a it's have a Xst Craig, of well I as flattish. volume a do of surcharge as combination will and But quarter it's price of increase, say both. the availability, TAG

I some I a back Great. I not important, to to getting fixed if the How early next don't think we made, And to the the they they part is availability? know from getting acquisitions you've bottlenecks about this help are or of and [Indiscernible] guess then year. year, this having key but capacity a that guess, really headwind

I that companies. magic as to think going Greg to some bring polymers that supply raw will add they we're well. don't materials it's on at allow we'll the and at specialty will, I side some can We're and of We'll will holistic while the that it'll the I a have, well ensure us it's supply But help door that get while call, Polymers the we if view the to as the improving expect possible look mean, as suppliers allow practice external us one be on our going you of to Specialty capacity to as continuing customers that we best this. base working have ramp base the continue to us. asset here. No, it's during key current help be that We'll looking this we to up productive as us as our supply mentioned, suppliers with well. the more to productivity this to our as acquired the

it you that characterize fair next you capacity and maybe per the more spring, have, be to Would getting less need? about about -risking, as it it de that is se

it think in bit term capacity I the little us a give de maybe term, the with to -risking, shorter we longer and it'll the capacity going relatively expansion investment that flexibility but be forward. more in inexpensive have,

a Well, thanks. have time, good Good luck and guys.

thank you. Jeff,

Thanks, Craig.

UBS. from next your Roberts of line Please with the questions. The is proceed question with John

see In out usually the we that construction you. the a beginning quarters of in commercial cycle commercial Thank pandemic? longer of can at anniversary results new is of think a drop this is the there. until Do lot least at starts in that's TAG, the further you business depth four down

for straight it's architectural Well, John, billing actually positive been at look index, you the if X months.

we projects stores have was the late to started confidence in we daylight early question the were place. project in hearing we see in commercial right have and pushed our XXXX that or that XXXX earlier our customers or a and from it is our what reaching that have with about these starting relationships that customers back The position right. now. You're are first That But terrific front. a are opinion the phase we're

this we're right a commercial an is us that. about and we're activity place. that the of be where deal in the on will capitalizing of excited taking for We think great growth So markets area

tracking in faster And base? think repaint. we consumer residential And that Okay. was TAG who it's from will within or together should up then smaller Pros since s growing about consumer Paint pros Who pay, grow those was to similar a

But It about grow some as on product terrific sure are with that make their that first been the They to base. that have faster to maybe well product prefer you looking to positioned quality products ticket in the offering partners want make are availability, that it's will, stores want are we're able we home of one those to of be customers time, actually smaller the a little that good experience we've on that. customers that and a and number of capitalize setting, that excited we broader stores. the are that as center bit just opportunities. customers now, a prefer that There if very And sure has a right might a segment And that we're receive. our there through setting, working that for customers or is services they for setting.

Thank you.

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

Great. half Thanks the as are COVID new function growth for having the me. return of ago, of My and Pro you be guidance seeing TAG the a to high-end year a accelerated growth at, above or expected question's here? more on is the of

year last America Stores Paint comp in X.X. Our North was our

think quarter, we see a quarter same, standpoint, would availability. but this, say not slowdown quarter just smaller. third will. of our typically just big in because quarter it as coming And on though Third X.X, I from seasonal are based around dollar more see smaller out architectural you -- it's seasonal was of you if the I we're I our the the so better won't Even is a fourth would slowdown, we're what in say, seeing seeing, impacts a

that's TAG. see you So uptake of why nice a in kind

Great. you. Thank

with Research, question is Cleveland Bosshard with the proceed line of please next your from Our Eric questions.

Two Company period these stick increasing are your How during longer of normal below or at curious, price the are Is the putting uptake of price levels things increases received? service your standard. I'm a the historic to first about it loyalty or where time. all, period being increases these as is you this time are taking -- path? probably for John, through of you're commented in

score, of Now I'd of loyalty historic going the or either soon pricing -- in, I it. empower trying is trying does a But have where is as it challenged. the was them we product have increase does product, that's to fact didn't and and need quickly discussion hard and make which get a that to think differentiation, loyalty faster result, it put decisions. trying that a And have, about numbers products And right a includes internally. the because stores at the direction. a build if the I through mentioned understanding the point working at odd. you're are earlier. these little increasing healthiness number is I question we is we're our a friends person are But in to as you. this made we're even into people standpoint. this needed a raw stay and price the their of say the that it improve and on are are efforts we to right as We're product, our in the a we're having. trying with our point lot to the a get are as the and putting it what in people are as profitability our material possible. now. speak healthy. under a a look to pointing of as metrics pressure don't got I are understand and from in other are the unique you that. Promoter I maybe is could all now we people for I prices We're and where the familiar we're availability metrics it while helping bit getting. about that there, in We're question built your the all other possible walking cases, And does again, that up a many with and counter side you've right you're to Eric, need give and that net terrific the the I There question locations store They that with marvel pricing. a and they I store are relationship Promoter, of customers There you And result, that pricing customers

it me great doing So gives we're confidence what working. is that

obviously, XX you Al, now catching commented about cost helpful. where reasonable early up? you sits it where in are the a 'XX, from up raws are secondly, that you That's Is And up way raws on and now Based visibility year pricing on to 'XX. you've that into that next on saving, 'XX? that is the world 'XX. then prices got statement some where and year and is you've initial to made linked X, right think about on that Great. within

being That'd all that accurate. obviously like and But would you're don't again directionally go Yes. see make else did equal, Eric, out additional we be we year. increases us this

you. helpful. That's Thank

Eric. Thanks,

Thank you.

today with of question Please Bloomberg proceed with Intelligence. from line Christopher final Our the comes Perrella your question.

have question getting quick over on the A afternoon. up, seen there issues raw and going market that issues Good China the you on on also or supply, risk China. in with issues any material are the demand energy on even property on the side are have over

been I say Well, challenge. China would has a

right. You're

small a Group the performance So And year. last very year. demand there's lot architectural very, this It's of the Consumer obviously Brands of let's a a the on percentage results. side, side, first on overall decent pressure talk

on we not a we're in have not China of result specifically, the COVID. sense what work in said our capitalize locally that. And you on some our we've pressure performances. pressure to work Vietnam if to We've the as strong some we've position We think Malaysia under we're packaging, really well in plans under able our had there, at side a but in it's challenges performance through look but be believe strong that businesses beginning customers to been But and results, as just it meaningful China, of to our and as industrial does is had our So

growth in and we double-digit mentioned, that every region. strong

grow share continue to there. We're of that. We market proud

Industrial point room, Business General in out president want the to our we'd the of was if think performance I our there. had they

a it's performance. So strong good

solution there's what every business, coil just on we believe fact, is in have And be we doing that in about China, Our industrial focus will the our business market. but well again, in factors. is differentiating pressure

real the down, the is Asia coatings how fourth out? the quick, in reopens through work or John, business, quarter that lock that moves sharp that a And would should seasonality expect uptick we Southeast business wood and in

an We would there. expect uptick

in had completely. shipped into of a plant to and our in Malaysia and people were plants shut in the out. a be quarantined that down -- challenges. Our were They similar only lot hotel there. to customers the many were Vietnam, very of There's shutdown

utilizing back it there up been had So plants that. to lot Vietnam ramp shipped we that is -- to pressure would of a has and has do up. be position there it expect to having sure to from to the We've we're they been that been inventory, other as it and make -- able into nearby Malaysia ramp try plants in and we in inventory --

thinking we've reemerge. as good for But it about. customers how No, So to us. should position our best ahead be been they

appreciate I you, All Thank right. John. it.

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

had confident very I demand we that Yes. is I you, with for If remain to away summarize walk that key today. our our you takeaways call environment. Thank hope today in everybody the joining

place initiatives and in continuing move forward. to well pricing very are Our

feel Our confident well. strategy overall in that as we people, about very and our

So in Sherwin. we appreciate interest your

be your Thank you today hope the I we'll great for day. and your And rest week. have of later always, follow-ups available you. throughout a As

you. Thank This conference. concludes today's

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