The Sherwin-Williams Company (SHW) 24 Oct 232023 Q3 Earnings call transcript

Company Profile

Participants

James Jaye	executive
Heidi Petz	executive
John Morikis	executive
John McNulty	analyst
Jane Cronin	executive
Allen Mistysyn	executive
Vincent Andrews	analyst
Jeffrey Zekauskas	analyst
Gregory Melich	analyst
Michael Leithead	analyst
Ghansham Panjabi	analyst
Arun Viswanathan	analyst
David Begleiter	analyst
Joshua Spector	analyst
Michael Harrison	analyst
Michael Sison	analyst
Duffy Fischer	analyst
Kevin McCarthy	analyst
Aleksey Yefremov	analyst
Garik Shmois	analyst
Adam Baumgarten	analyst
Steve Byrne	analyst
Eric Bosshard	analyst
Aron Ceccarelli	analyst

Call transcript

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Operator

Good morning. Thank you for joining the Sherwin-Williams Company's Review of Third Quarter 2023 Results and our Outlook for the Fourth Quarter and Full Year of 2023. 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 2 hours after this conference call concludes. This conference call will include certain forward-looking statements as defined under the U.S. federal securities laws with respect to sales, earnings and other matters. forward-looking only made the no future and update revise speaks such of obligation events statement a or is as statement the any or forward-looking otherwise. as new date of which to result Any of whether information, statement, company undertakes A regarding is forward-looking provided earnings the company's full transmitted earlier declaration release this statements in morning. Vice and call will questions. I will After to over Jim the session to company's Relations open prepared the President, Jaye, Senior remarks, Communications. turn the Investor we now

James Jaye

and you, everyone. Thank morning good to

percentage Joining year CEO; results the again sales the year-over-year Consolidated Finance. Sherwin-Williams all Chief net on percentage. of customers John Enterprise expanded a share and expanded Senior our by prior level at call and uncertainty minutes. But current the driven first, our full end at range. period same our XX.X% a income businesses. Operating same Officer; double-digit and grew material let margin and in target with diluted Chairman double-digit me significantly Cronin, over discipline today time. made moderating on and we ago. at aimed of costs. To gross quarter year-over-year by last we Consolidated adjusted advantage to in half, first raw talk EBITDA strong the Mistysyn, are to our single-digit and to are Chief of driving third delivered which a of year third XX% are high just business in touch guidance, near guidance Morikis, are and excellent also quarter, take John Financial a of growing Al margin follow are current sequentially range. President Jane a and the about within those grew President our commentary and Officer; third investments, by SG&A and the the being Heidi from and The reiterate These few our committed quarter highlights. per few which Petz, XX% quarter higher to market profitably Vice me compared adjusted Operating EBITDA margin growth increasing deliberately investing pricing will success increase were across reflects a net results high year

In addition, we quarter. to the shareholders. share during our returned $XXX dividends through million repurchases and

me Heidi, to segment. your to it questions. who our by provide on Let our move now over Heidi comments commentary outlook follow third quarter will some will we on with on results turn John before

Heidi Petz

begin Group. the I'll Thank Stores you, Paint with Jim.

increased higher was Third Stores challenging architectural driven pricing driven quarter improved sales effective by increasing in sequentially Paint Group comparison. XX.X% increased volume quarter, amid Pro comp. against Pro strongest, remain by by Industrial high sales XX% home X.X% oil markets mid-teens was In pricing costs. raw a and against our moderating & Protective continued discipline as by flooring, applications increased existing percentage continued Residential and a double-digit sales softness high gas percentage and single-digit mid-single-digit versus end sales a commercial comparison. infrastructure key and repaint by teens architectural a the a percentage comparison. to drivers. sales material new residential. fastest and Marine Segment increase by margin excluding against the and the year-over-year volume, in the XX.X%, driven The strong growing were

a percentage low a we the not continues are single-digit this repaint and a grew for comparison. by maintenance growth. performance res largest be our solid current While against Property sales environment, satisfied, is mid-XXs in to opportunity

residential the were single New digits against down with comparison. sales mid-single digits down high volume mid-XXs

softness challenging near residential in new given term, anticipated we starts. noted, previously we've single-family be prior As would

expect more to and starts apparent more become improve. wins new account as our share continued We gains and

XXs X% of on and The comparison. From was paint softer by by America, largest in while perspective, the last North DIY Group DIY due sales in against low down low business comparisons muted price which the third to inflationary was divestiture paint up against interior architectural demand the single to business and remained sales North year's were paint DIY both Our a who Sales category digits Brands percentage double-digit flat, a low quarter, America, China quarter. demand a grow, by selling exterior offset consumers. decreased double-digit Consumer very in our primarily product difficult decreased by region, continued pressures were increases. Sales partially comparison. mid-single-digit our single in a digits against in pros

to partners XX.X%, due down Asia acquisition, of high to single-digit up Coatings was double-digit business, but residential moderating in Sales by Europe share by continue low comp. by which strongest by Latin construction. In remained lower reflects ago. Performance growth raw FX other XX.X% against America Europe. double a significantly acquisitions. lower which on bottoming the year sales margin America positive comp. was in in digits up sales, lower digits pricing, a a digits increased China with decreased X% varied was retail regions, year against X. Adjusted our digits invest Sales Adjusted growth low fixed volumes. from partially lower primarily of comparison. North high segment digits our perspective, low a in mid-single by were mid-teens Latin America due Sales increased a material a percentage. to percentage, and a and a down ago, mid-teens completed strategic discipline region. decreased a division of double low single comparison. Group in digits mid-single-digit and single-digit our offset primarily in PCG From strongest production costs. Sales gains were to growth. double ECA absorption high sales sales margin growth was a to was Demand against a with new low cost wood were we industrial teens and single in for segment XX% divestiture contribution as business potential increased August Volume percentage pricing due the in We This against volume high and decreased by sales against single-digit weak, here sales than and

We gain this momentum further expect to in business.

As we industrial acquisition of holding Germany-based comprised on announced Nolte previously Xst the of specialized October closed coatings Oscar coatings businesses. Club and the

sales the by brand comparison. Sales against earlier sales We plant. by against both comparison. seeing destocking vary year. owners share single-digit single-digit a percentage slightly single-digit challenging industrial quarter mid-teens steady high decline where coil we and low Packaging refinish, our against general and the in are gaining described demand decreased auto percentages were We region. mid-single-digit high by and percentage Texas Packaging comparisons also a in by that widely a by by down the fire given Garland, in this at impacted the anticipated sales this near-term were increased

fourth year. on our expect online customer turn growth near team impacts event from at contingency we Tor continuity for Longer executing and bring new to additional prospects and good comments it the end me XXXX. With for we plans France our this his business market, in very is to continue term, capacity early position John term. feel quarter our outlook this plant that, to the and to our minimize by Our let about

John Morikis

Heidi. you, Thank

backdrop mission XX,XXX true strong on Their characterized focus to solutions serving our continuing in employees on the providing an second our half July our anticipated demand strategy. uncertainty. and for across our we another our energy team and to call, remains thanks Our delivered environment for by customers them ongoing quarter a executing our with in My described go differentiator. On businesses.

unchanged The Protective remaining residential third much we & out we Paint Marine and stable the face remains new Group Demand as quarter. another property maintenance, quarter commercial, remains largely strong in with and expected, the played Stores in environment as we year-over-year will expected. repaint soft residential comparison. fourth believe

do opportunities of market Latin North Europe share we demand to annualized we macro increases. aggressively focused defy We In market remain pursue demand stabilized mixed. aggressively gains, highly gravity that. drive We and Brands, demand environment. by Coatings in new DIY soft. markets remains share the Consumer doing region. have now cannot we terms and just What and has price wallet know on end of Performance America prior by variable account America can are remained is

cost We're our narrowing year full material side. outlook. raw Moving to the

percentage to costs a compared down expect be by single-digit XXXX to in XXXX. high We

mid- We the single-digit expect up other costs, including be to wages and in high other costs input to rate.

ours. also market customers to the continue uncertainty through press for drive We success solutions advantages our their current see as in opportunity greater and that will to an our investment

reflect spend the Our single-digit approach high quarter to year. well This fourth full last SG&A to range to year in low will has many these investments, double-digit us past. compared in increase SG&A served the in the times leading

and growth confident strong it again will are in highly resulting now above-market continued returns. We

on be We fourth high a net fourth slightly. in XXXX, XXXX will or with up single-digit moving quarter a down quarter the our consolidated to specific to our Now single-digit of guidance. low to down flat increase sales volume percentage compared anticipate

we've As largely across reminder, the annualized price business. previous a increases

to year down low a low sales For the net with we be a expect percentage up consolidated percentage. volume full single-digit XXXX, single-digit

slide segment full with release Our expectations in fourth deck by sales this for press the our issued morning. year the are included and the quarter

reflects $X.XX $X.XX net $X.XX is a release. fourth material per continued the expense per share are discipline expect in We our per reconciliation believe of seasonally at year acquisition-related increase XXXX This This smaller basis, approximately performance, to while costs midpoint the share in net this also of share in year's related share. to of year we expense share. moderating an restructuring $X.XX We pricing compared press in increasing includes earnings raw quarter Reg income $XX.XX third and of our provided XX.X% last full ongoing the On We $X.XX diluted range the per the our accurately to quarter. per range XXXX our within $XX.XX. guidance GAAP share. be of earnings uncertainty table amortization and range G to strong full an acknowledging adjusted adjusted increased per

our includes deck Our slide on the assumptions year. for information additional

the quarter, by expect we market. to continue As end fourth we and choppiness begin region

are to uncertainty, our we and More how businesses various see importantly, we positioned. continue in are amid well confident extremely opportunity

Our customers productivity that continue drive working, not and changing. profitability. and to strategy is clear. We'll their their our it's differentiated with It's provide solutions

the right are products wallet growing services remain right on customers. accounts markets the new capabilities, with and share We and of Our in offense, unique.

talent also retaining developing focused operations. and We remain and simplifying improving and on our

finish for thank market. year have joining to we'll XXXX. leadership we our with us be expect expect to in concludes carry This our our questions. us and with our competitors Together, people. take confidence and happy the the to like Heidi, team and outperforming the utmost you will morning, remarks. And I'd momentum that, into prepared I continue this that We to your

Operator

first coming BMO. is John Instructions] [Operator question Your McNulty from from

John McNulty

in the best of on slot you tenure that great And take year. first, a CEO and at John, you as the congratulations the on role luck to Heidi of end

of on like the it's I thing you're to repaint as strength Can bit just looks us I area. So have give the guess maybe little was touch the what a than little you what in market. It stronger expected. bit contractor of first a we to especially wanted been residential seeing, color the would

how So take on think that forward. just your about to curious continuing going

Jane Cronin

Yes.

great here. a I take perspective. make right will. in And this a I want bit you point jump think which minute repaint before just into to put absolutely I a res I

You heard look stronger year. prepared performance really against and results when up in our our remarks general, comps some we're we aggressive posting that last from of some at

I that piece being environment, get new still important we over anchor here an post. that's into XX% and as comps the against Certainly, res continuing res in this in to think up repaints. I

to we're able be really of team some the overcome to that. proud of So

right does res jump are know you I'll let market. So I just vary share depending a think into that few gaining we Demand I on repaint, this yes, if variables. in

business. being that than type confident bit put more if scale on got those more in they're their marketing and are and less and backlog. the are in focus established their able experience that look you their those I for this them true think well-known more at a They've and business. have would of separate to experienced so in that's that I say marketing contractors

in say to or look finding through of a leads and helping business, more what uncertainty makes this navigate of at stores I them making Importantly, facing that bit accomplish is them also be helping I'd as it this efficient intercept whether they're we're sure trying ways to choppiness valuable it their So their are our even to believe But and there's reps a variance is lot in the we're our in an a that more adversity opportunity process. helping it's there. that that we contractors this these where

for in. think We in So making that investments I ahead. before. referenced SG&A in XXXX continue out residential we've movie see, to putting take you our in ready I'll And to positioned XXXX. and does We're of sure repaint. we've the that came saw coming you this earlier be and back. John recover investments that all what's was this the well that We're as desire place res what drive got to here seen new

an where this I model say when to opportunity and So would our out gain share. when a able and of is we're lot stands

John McNulty

still business. remarks Got it. and in around guess higher, cost coming definitely It the also pushing like price. you're in Fair investing the the down, I just other you highlighted looks are still enough. second is And versus but are raws question costs that

pricing? you've little in the you I pricing we thinking you're think into guess, further help us paint But about should XXXX? how further pause I season. So the of do can bit about recently a know for as the a as need for taken need normally you be to pushing

Allen Mistysyn

Yes, in we've We're plans. basket. period operating gotten that our with ticking reviewing of a up outlook really be John, is has a through our we for through year of material that we're I see And where that time questions going this lot suppliers. we're the oil of our flow before and know up, raw part about Mistysyn. demand to Al

I will cost the other see you think what items input increasing. is

a of will things health you've that up. level, going costs more are driving with I get the but got on some think merit freight, carriers to care, overall our LTL increases back normal

first don't So typically price, we with offset tell have offsets as like look for and as to feel we need out an And then Street. we talk we'll do, go -- we customers we then we'll back and we push as much our can. can't when the and, to

know through a come we'll let let we'll and the that and back and more our we and process, we're So time to need customers going out, that little figure know. street then

Operator

is next Your Stanley. Morgan Vincent from coming from question Andrews

Vincent Andrews

just we through do you back, X to then we Paint us outside do the we're up a year, next in the both in could But As that doing from to given what level now, normal down, terms not do think years to or measuring Is this about a of I that? over 'XX, appreciate SG&A understand you're how and if And do the big is P&L? increase SG&A next is realistic more. or year? we go here the it completely this going grow how lot think of both? for simply the should from dig going but Stores line volume of couple what come Wondering about look specifically year. margin be think the just return Group, on I into presumably into it to than the less and step a bit want what you do see about in it's years going

John Morikis

it's that this I important. want strategy piece And in I start that you let share that will in movie because investments our seen in growth. making, last Vincent, that have see really confidence we've will the see we're think to me you again, the reiterate and before, P&L, the and we market fact the with

that crucial to the I area our is in with invested we'll But Our these that on teams our that's P&L you customers another important think on measure as able be bring areas. are well. executing won't success

customers success to what And on do. making at back we're driving of in help So will our their it investments the these clearly our is you achieving strategy focused employ if trying to we is customers. that go the that

I be you so the expectation think look increased share the profitability forward, in market market volume should and outpacing And as and as well.

Allen Mistysyn

those return. quarter we XXXX, SG&A functional growth Yes, I saw and lower at our But investments incremental we're investments. costs We But initiatives, in of see Paints. that going we drive our part and by have budgeting figure look as initiatives tech admin driving the incremental investments. and to to so certainly, second or long-term that Group reps, each measure and And as going yes, ways across the reductions Performance we'll Coatings down costs Pros the you offset Stores sequentially through get into the Group we're would continue help Who in or going keep to kept those our key G&A highlight, for annualize third even to pay in I'd say first the those though if our in investing to investments you're of absolutely will sales offset in our trying of service we reps SG&A through to Paint out plan. quarter, We're costs G&A to you cost we areas, the the year.

Operator

Zekauskas Your is from next coming question JPMorgan. from Jeff

Jeffrey Zekauskas

less important I when But sequential were you price know the from the year-over-year product down area? third any in quarter, that are prices your been. sequentially to positive look comparisons the pricing second are at than they've

Allen Mistysyn

pricing you of gone. if point, at Jeff, some on cycle. basically, we've we've talked at the Yes, you because know pricing throughout as about performance look a our coatings each segments I annualize XX-day through

mid So fourth lower look would impact compared quarter, the at still our second a to digit. price quarter, the be you the single-digit our second if you'd get quarter. into quarter. in you fourth quarter, that as third up low single-digit up in quarter, And But percentage have was single added our in on a price at

along in the would But back. and can price not price margin our increases -- that points, have of performance be sequentially. cost in to you And up and say, expect quarter, again So quarter material we've that's the -- annualizing just the second given see up moderating XXX we that in XXX our the 'XX. throughout basis raw fourth we argue with quarter gross taken third I third up in

Heidi Petz

to would well. that I Jeff, as add

high, I credit every a give our contractors. holding with day lot it, think because of our single and team it's record the effectiveness it's is at I just about demonstrating about value that a not

Jeffrey Zekauskas

general. I your single fair? going digits digits. high of if And And down Is bottoming quarter, down the imagine for fourth the great. maybe year. that in single the in materials fourth quarter Okay, be materials the down to would the digits sort would raw you're high were raw is they industry for double be of low

Allen Mistysyn

we know to don't suppliers to earlier, develop each market I the still our that what We're bigger the Jeff, I I material And think working think mentioned at does driver supply the of be pricing to with industry like look is I'd And have I into XXXX. far. of as across go demand, raw demand as we get look a that's regions. driven. going

we they're think quarter well. as quarter expected raw be our to in on as call, change our certainly, I going costs, mentioned second quarter biggest our in fourth our down material we but to year-over-year third be

Operator

ISI. is Melich question from Greg next Your coming from Evercore

Gregory Melich

the I had gross margins couple quarter? decline in is, questions. a of much hurt year-on-year volume did how the One

Allen Mistysyn

Yes.

I mix -- when single quarter. driver decline talked look operating that low volume overall being When always the that's biggest changes typically the of in leverage. at look the how digit, think certainly, Greg, the margin at down the you you about, as I've

Group and then So being Paint more we talked that. X the other about being segments down flat than Stores

margin sense Paint because that Group a Stores profile. than less higher was an makes if Paint down was to similar, impact Stores of it you, if gross So has

Gregory Melich

hurt, have decline mix the not it of you but much as think, given volume as So may was? where the

Jeffrey Zekauskas

Correct.

Michael Leithead

Could hear the how particularly you're us but about Okay. question the specifically what backlog new is then sounds new from on follow-up resi you resi side. in more that it I'd what give some the to repaint, mentioned -- I on weak, repaint love the guess on sorry, more update residentials my like PROs, hearing or architectural. you resi And I'm

Heidi Petz

similar Yes, mentioned Greg, I think to on earlier. side, I the resi it's repaint what

again, terms weeks somewhere down by bit traditionally, between of visibility. limited I I I at come X you're in weeks, to XX, of that, think backlog would going has more XX find would look experience, so outside themselves. other are But build out, X size of They've you see say of look contractors that versus that, or ability at the -- the into still in that of of 'XX it the terms some line trying site level to of the market ways to out to again, got contractor, those kind backlog. further smaller a

Operator

coming Baird. is Panjabi question from next Ghansham Your from

Ghansham Panjabi

the question, will interest I dynamic the think building in guess of and year. first dampened the out what strong how of the you increases sort like relative with with of some last that since it for some interest rate rates higher you just coming reversal iteration reported dampened was was your into to impact fact of within last on seems just were saw the PSG actually by because you that verticals X this -- backlogs play do the this very

John Morikis

models some the frankly, the I'd We're market. and that And challenges in as our value. clear services think that the and changing introducing. the stores relates have bring mission. got competitors I within we given also an I Sherwin-Williams it products way, the taking, we of are contractor very confidence focused that uncertainty we're And simplified this describe to on Well, think there's that approach outpace to Heidi on as quite market. And X going dealing it believe that rate We've with market. team our the And are approach other example. one adds to opportunities we're the got painting advantage the can taking we've really we are interest of

enhance from So top growth of the stores. our will expect on investments that that we we're that the organic making

in lock In right need the and of do experience had the to on a car support help taking turning you customers front yet. how now. sorry, their through just we're would of -- guidance a may now house truck resi not past, They market And mentioned conditions the so I'm are neighbors park our people Heidi where in in. repaint begin cycle neighborhood some for a advertising. they going that just have truck advantage and all in They a of front

our turning they're so And role. and our an people to are people, playing important

when we rates, we that. on happening with also it talked Sherwin, adversity at And and opportunity. we opportunity believe choppiness, capitalizing And creates interest creates what's so openly at but about we're look there's some

Heidi Petz

I piece add would The to that.

have specifically relative flat residential new for rates, year-over-year the months. think or to been completions straight X while failing negative interest I single

We to starts are year-over-year X starting see the for positive or months. straight

we're rates may it that bottom. very past watching So interest also closely, we're signal the

that So choppy a knowing this is environment.

are important Another point think on I preparing shares. that here important are talking the disproportionate for really market it's about talking while focused is that others are preparing for laser slowdown, the teams taking our

went large a contracts national exclusive So of number with with of building in with majority we arrangements into out COVID we've a have builders. of that and momentum these come some exclusive homebuilders, we the

trying reduce we I to time, team's demonstrate cycle in going product of closely. they're possible, And this to to standardize helping of as that all environment, and capital. what and talk managing they're working step really on to effective our value to drive and this it these in an new again be further they especially doing to in demonstrate get as bringing this take we're increased as but and our capital here, but effort capital help streamline think aggressive the to testament be of in terms rate. with so the volatility course, helping -- to they And Sherwin's ways profitability as space also in them of and lot some as can in to in working productivity, environment this with about the I'm be residential that a ability of the discussion helping proposition, more to to, this working having it in them that's a the look partnerships front market their of interest at them is goes a value environment. and back can

Ghansham Panjabi

leverage you a free terms looks rates interest It over for billion I little the thinking cash higher. of given 'XX. and flow rate How at environment? debt allocation, fact $X are about balance due And point that have the to of like terminal it. Got are guess, for 'XX then in refinancing back between changed going this of about sort sheet the Sherwin-Williams you much interest

Allen Mistysyn

Yes, Ghansham.

remember, total ratio flat that I net the was to third and I think end you a strong year-end X.Xx you'll keep versus at a leverage I But with the the was we'd said you XX-month debt trailing X.X%, quarter, saw our combination thought into as year, get coming debt-to-EBITDA of our XXXX. EBITDA -- of a debt growth of million. a as expect million our But be almost over total $XXX in about reduced the year, keep of over forecast XX%. kind little I we -- X the almost year-over-year of will would by would firmly $XXX lower that end debt range. by we X.Xx that also total and

Operator

Your next question is coming from Arun Viswanathan from RBC.

Arun Viswanathan

week. industrial. get and maybe earlier, of if the missed seeing you through better it protective seemed Could what protect your those but markets? that Apologies verticals? but seeing weakness there, you Refinish, other like packaging those unusually What obviously, are in We're some I imagine still guess just strong you thoughts within markets would I maybe run just I strong. reiterate had to wood actually can on expecting some you're was just strong that was I if there's Marine,

Jeffrey Zekauskas

Yes.

I think, you all look really at it's when that trying talk to all first important. it's and our I we're is internally, working. portfolio, things And foremost, not to people. think is this share I'll be business we and what strategy about this which indicative we with

key discipline across the this. sure certainly look we're making when investment, thinking is about the investing of part how you businesses, discipline that so And these we're and a and when

as to well. just in want [Indiscernible] So bit little maybe jump and a of John divisions

key acquisitions value some value completing drive There's prepared You our in coming really an against is a in we start just good think to to some to shareholders. here remarks, and earlier, increased And housing with to mentioned we're been for that return of and we opportunity wins with soften, continue us here -- continuing of regional we you lot Multi mentioned out mentioned our this position Oscar U.S. industrial feel competitors. wood. a like is while clump of

bottomed appeared for day so have again, come in per along gallons [Indiscernible] all new briefly back, residential ride out wood Our regions, automotive expect swings industrial we the the to it's refinish. I'll comment on there.

here. against still then better the is on to working than to side, coil focused think the Refinish, of soft, we've double is importantly, some are continues up new expect in about adoption North continuing. momentum create That digits, add industrial team footprint. us. and North Mexico our and to that continue installs solutions a an see is but control And our business. rolling the have We products, digital we America North similar better for customer regions, -- gain think a technology Similar collision differentiator here pivoting along hard to soft, we've holding here for to Stores been to that share the this but equipment about business able us. to really general market bit more finishing we and that think also users truly bit And laser end audit had In heavy We're and our strong We market. demand we would talked which continue. is I beginning expected I team really is suite is a with core consistent other that's Ag, of talked incredible up general and a growing. Building America in And have our helping is the our core with adapting Group opportunity good year-to-date experience wins. especially to tools business nearshoring some to footprint. is and a in our up, Paint America that benefit

we're the China say well. across on regions managing of would about I So are carefully. very comment at that coil that One the most as XX% coaters running capacity.

expect to we there opportunity So be forward as well. there some

John Morikis

Ron, I PNM. think your mentioned question you on about

team doing that really of high-value there terrific on is the projects. into focused think we bring job I proposition value a staying

And semiconductor recently an businesses. battery one plants, example, and for I've largest been at are plants just on. these EV plants So the were all out over it ever of our coating teams as I

it when as we believe And times Protective as take approach. terrific Marine find to that focused investments We delayed, be I well wind that areas of canceled. at I'll reminded water highly be and that talking wasn't tough, the a investment continuing corrosive invest these they can examples And on. mean, this we're offshore we to our infrastructure. even but when long are little business I be I our time these under you, Oftentimes, remind long-term projects energy alternative these that was investors think need it our about you'll were all are & coded. other can't ago, pressure. knowing a -- areas were

of extra as You year types return projects year a need those those. a they repeat businesses or out might that the that these an those coded. And you to it's get but high-value maintain or X almost to attractiveness coatings. of be of But kind add are of

the Karl remind had operating you delivering. at So within team proud Jorgenrud, business you what this It's come at set goals team margin XX%. they're of our if we the of And entire importantly, leadership XX. in for we're really that PCG for

high getting XXs. goal teens, Our low the into of up

doing doing by it, us. they're to value it bringing our and and they're to So customers

Arun Viswanathan

said any divesting would those what or and I Great. what given you could side. add one if businesses, similarly side? those M&A the follow-up need in on you see do the capacity to inorganically that on share And different of you verticals, just ask areas in

Heidi Petz

lot share segment call to a Well, of we confidence consistently, need M&A that investor us we've and in in said this certainly have to we our organically. to There's every recently for take said continue don't but we grow.

And about we've go point, back I'll all that where to design. of capacity a we be very to standpoint, are strategic And is in. by continued that Al's laying so capacity from

As XX-year capacity, look do needed. our if XX-year at our CapEx plans, that's But to new going to it's net want we system not don't need we're plans, put demand we certainly, where the we anything that. that to

John Morikis

through business, the particularly it's out. technology, very an I board, as as area M&A, continue much or quickly The or acquisition so but to that's our as we to can Heidi very sold Arun. investment through is add, unique more capacity product do so bring mentioned, unique technology. invest. a our on needed one point we don't It's want that I not It's of And a not, know packaging packaging VXX

So I will think that's that an invest we in. area continue to

Operator

Deutsche coming Bank. next Begleiter from from David Your is question

David Begleiter

they target will were gross that quarter, margins, like QX. target your long-term and sounds it in your near above the in On it be

how that, given So high approach or can this it they cycle? XX%? Can go even exceed

Allen Mistysyn

and would It's sequentially quarter sales. in not see David, gross may margin typically one smallest caveat The margin fourth may When our an quarter you architectural quarter. or slowdown be that seasonal our look make. volumes to I at because improving. you that,

we year-end be Also, adjustments adjustments reiterate saw margin. to the Paint You a quarter impact fourth have -- margin. a increases our to will our drive price third gross have that in of And big in Group our fourth quarter. could what grow Stores in as the is material and other have of on than that year-end side going tailwind that going that aren't gross other help quarter faster just

our we're to I consistent XX% set As any sit current our our or we at We as at adjust and range. XXXX we're change We'll point. this be to Day, are range range. the about we current we But XX%. don't a consistently talked aggressive think going in to that And goals about at achieve ready Investor teams. a going here approach make talk forward. to today for

Heidi Petz

add would ceiling. is no very simply, I there David, just

David Begleiter

does think, or it you the DIY looking need at take current see see, what to weaknesses, do of reversal Very you cycle good. DIY to And past do just weakness cycle what here? John, in

John Morikis

are effect. relatively increasing fact there'll I'll paint take be consumers the normalization, home inexpensive wages it's an wage some clearly, is is going And inflation the in I'll of age some staying their that make option. And it's very if spending perspective. a years is a a that patterns pressure stay place, remind highly that to in the people Well, remind that people in to this, old. But viable decide is opportunity going over you for difference. the will or from impactful XX they're homes feeling consumer yet their they're home, to interested sell if average now in not home, you the

that as the as is additionally, investment our position and So it I be impacting inside, don't people cycle, does an DIY a there long helps the There's population here which the of XX-year-old a more important more is as there. way the But well. that but there's aging, game only going playing And We generally out homes. structures, would say, place res we're into more gutters in aging DIY, turn and and people in will is scrapping their not their space eaves to part. be yes, of in well. helps help ever table repaint the want will opportunity,

Operator

UBS. is question next coming from Your from Spector Josh

Joshua Spector

around flat guess with for first. I a U.S. that when stop like of look regional if I new more one you'd pricing. call first, else macro I ones I'll get res, looked group. it guess, that you out? assume was X stores know something I for or digits. at completion don't the some divergence mid-single kind I that's data Maybe

John Morikis

are days after starts right after start experiencing what before whatever, longer Well, delay between the is I so bit now and -- a or a XX maybe little homes painted. you're housing think the

where when -- going and question of residential. our and your you our think mentioned Heidi So around share share view, look new is I -- at the this, is

rise, very exclusive is new our to relationship continue their teams mean delayed not that new hole count supply right It's than to commitment demand I would the signing be rate now the starts, higher you see the now with up continues. scoreboard. great success the exciting coiled customers. there show availability. actually and a helping is that that our helping we've and profitability spring there's There's going that getting agree and housing I strong and us stronger agreements it those we're that we because right and we're will more past, on tell can back, our homes When it's the on they in confidence is now formation right to as to will, that they're that everyone right with the But a here in exists every Family now. are at winning, the that. grow seeing residential pressure day. position been and continue arrangements Our the builder winning to Heidi and comes mentioned with the

Joshua Spector

the but I the think the appreciate it, And industry. side repaint about not other maybe that. Sherwin, resi on side, of when Okay. you just just

that couple of that, reflect in don't I have and that we orders the to So Is contractor there step Has -- backlogs down down I if turnover so ago. just the we are into that you or leg -- fully from X/X we thinking digested years mean year? still have next industry about a up, how run a mean, plays peak that out reflected another reflected rate? if the that, normalize in the to already industry current have have

John Morikis

Yes.

I think it's been reflected.

and a cases, And months. X before repaint were If about give calls. were get they'd it they in you year back come a even to talking then contractors many the in many res that, about would to phone that weren't quarters out we project. X few take be returning saying here, There were you people a quote could

been I'll has it creates Again, opportunity as there adversity a relates residential reiterate to repaint the more that will, you this Sherwin-Williams. if contractor. So normalized for reality,

are representatives. as in You should this here customers getting right bet our are Sherwin-William's visited that moment now we with

that are You also bet well. as our customers competitors' getting visited should

So to we we're aggressive some not and after going market share We're playing nice here. pretty gains, aggressively. win expect

Jeffrey Zekauskas

would Josh, adversity more and add agree confusion couldn't I that. friend, now. marketplace is I And our to right in lot mentioned, think opportunity, And I a with that, our there's of the too, John

experience the distribution manager about -- control we we owns when store offer consistent take manager get strategy think it's we of res that because it's owns can and talk repaint slot owns these working know The them. exactly that P&L. they store platform culture and Our The that relationship can the that is they talk store. owned reps. here, we our important the what critical really to I I'll And about you staffing, contractors,

And they're more. and in, traveling, on as are as so grow they trying as coming they're take to

to them front any of to productive prepared, help to that as and Our and get they possible. become them tools teams in are profitable need as trained ready

to I'm this So as prepared we to and really contractor. how we confident, are differentiate value add

Operator

next Partners. Seaport coming from Harrison Research Mike Your question from is

Michael Harrison

still And you You delays permitting or in construction XX/XXX? this far have so seeing the are process? paint Is the target the store opened XX locations new any year. either process

Michael Sison

we to we do yes, expect expect as build any we delays. said not and Mike, no,

getting is think on critical volume certain you unique where every store important. timing really timing I a of chase clip, X Street, the There's density our a But area. in we're a of return those some there's lot think we and this continue into -- our a in to the look to stores When to is of certain we those to because to market opportunity markets. chase days, can and team desire those the at commitment getting to strategy there. see a to still and and commitment nuances rapid future a in terms stores density is there's reflecting opening at new our takes we're puts the our we imagine

Michael Harrison

box maybe you inventories than would work point of All on this with inventory within at sale of customers you the Do And down volumes weaker your been have have I right. your the into big in key compared are some competitors it this to And to retailers suggests been suggested X below there's then to some thoughts expect business, customers? them year. the that sell-in any that be. whether sell-out where year as big-box how of consumer point guess those your

Heidi Petz

Well.

wouldn't on anything our we all, customers. of First to comment specific

we So is our success with making that again, openly approach that with sure -- but taking do is what partners. I talk our And about success. customer can you share we're

that capital. at how So working them are through our inventory optimize helping to manage right they making we're levels, looking to when thinking the sure at

You a can daily on those conversations assured happening basis. are rest that

here. So we'll let them their specific speak to strategy

John Morikis

that that success our the frame way Yes. And I'd Heidi our we gauge really I that, are. how customers think successful that's by important. like

be And because for we're to what want to customers, might working work to little only that you maybe put a not so for about their bit trying to can capital capital, Al, be our drive us but cash the so put more working talk of customers. with that successful. impact our acceptable we're they or reasonable and them encouraging And working actually their manage

Allen Mistysyn

to as saw a we back selling consistency towards bell working Yes. the in the XX% inventory do, typical we more inventory I'd go more build half, also of XX% inventories we'll their inventory our decreases a we start then season. and through see we out customers second curve. Mike, our we're decreased -- coming gallons that summer getting as as We to typically into expect we To with, to the incremental better sequentially We grow XX.X%. fourth because manage capital at to normal I quarter, that trend quarter. you're allows would our back our that environment. third point, say were we

do that's cash Ghansham and our about, have ability our it $X.X debt, that's in returned return and a flow, working quarter third and to And that combination well cash and quarter expect we our year into cash on and very strong allowed that you net and income to flexible. that. is strong but significant for us we've dividends really what also talked to our over us allowed down our allowing So to be shareholders flow pay fourth to shareholders through to drive capital in saw a management, buybacks, results that to time. us track over it's billion and of we're

to our we consistency down. with customers manage working high interest more and see capital manage operating to our which rate this inventory, normal So get then their in capital back us working allow cadence down to you'll environment, allows our that

Heidi Petz

the to optimize we back I would we're confidence that for work capital we've capacity here the design We that well, got our as that by very time with to ahead. and intentional inventory put go partnering manage so inventory in that Al's working add have point and partners piece to build the X capacity here. the as And season can to closely to I

Operator

Fisher from Your from Duffy next coming question Goldman Sachs. is

Duffy Fischer

what for indicator seeing is store telling the like being sale quarters good X- things that a you John, holds couple with sprayers stores equipment sales? of talked lag. like a about you've today in you're the about your often what What leading to X-quarter next

John Morikis

is I'd say telling it's season. a we're me Duffy, that now Well, ending that what

talk So as of typically, about the season. I'd and we types say, confidence the usually go between is while into that, correlation greatest sales we those

it, best in into of season. right confidence the it's to market, a we'll season, And position next a market, in As we I'd this paint of level in have we're coming unfolds we are to best gain go of talked, there's out tool spray the the how continuing the use move. now typically see year of but our as as we've to not and out now, though, parts the see Coming contractors. right confidence we say choppiness

Heidi Petz

projects But for commercial what through midpoint we continues the spares are contractors of next solid, backlog be well of seeing the to despite our year. is there too, the

that to So cycle. getting more normal back of

So a good growth indicator of some there.

Duffy Fischer

you your of a made whole ever paint see as stores weakness that Fair. the didn't company was -- think And generally a then for inclusive the in seasonal I gallons and was we kind your that of group Heidi, comment per a bottomed QX.. I had that's that day or in view. even

Heidi Petz

in That wood. just was

Operator

next coming from is from Kevin Your Research. question Vertical McCarthy

Kevin McCarthy

in administrative quarter. reading you disposals. called I It X looks comment out costs. on if you your up environmental they the namely jumped like asset could was items, And in and bit third a commentary wondering expense the

in those what come be, that would items? would you questions are fourth the item few quarter And back a and the magnitude of to So and nature down beyond? expect line

Allen Mistysyn

gains year our question Yes, I little assets sale last than fire operating at quarter would I want and that margin we're it's to our environmental be compared plant also guidance sale, better I'm line, at on to think costs a because and get backwards. quarter basis of say, our year-over-year the around EPS you guidance, a than year think would a asked fourth then that quarter way expecting glad was to midpoint benefited related strong our of it's that margin though is fourth year. at fourth XXX our a a little a guidance, less Kevin. operating look we increase, half last going and color profit I flattish I to even year-over-year. benefited operating the quarter against I little which our up is third our points. we up up don't over that implied Garland But half. The give with last increase And are say, XX%, to operating and was margin year-over-year to less

as So margin not gross we quarter. expansion of quarter, we're our to saw fourth of higher third expect we see not that moderation. We're our in do big we got year-over-year our -- And expecting as are much because SG&A We long-term I not going the raw a tailwind quarter. in as get price third material in investments.

repeat increase to gets our approximately to credits So us don't these we costs million normal in quarter get be a last and we environmental environmental expect to expense in And due nonoperating income it's that realized costs. other year our that we really the that in will fourth predominantly have lines $XX and other segment. to more level. nonoperating then that the and in admin And a these

Kevin McCarthy

you reasonable relief mid-single-digit were as second then frame to here? to material it how outlook to if that estimate as Would percentage costs XXXX, perhaps be flat to could relates trend from negative in for low that single next raw the raw it a specifically? And your would year costs material Okay. see question, you range, or in

Allen Mistysyn

preliminary seeing environment. rates, historically, environment a the raw the we've the in in think run and current Yes, on rate I we're with demand know Kevin, volatility I oil, both materials. choppy given run

I look too have in about the sense the input probably that the soon increases, more also total getting I is we back think take a talked But that's little care for in other levels. cost a significantly. factors health merit to the that to at growing costs. normal

things on We LTL freight have freight cost our that the costs driving in of going side some up. overall and market are there's the

you sight premature and So January. line better wait of sight I'd that in update little guidance. or of give level of to I rather until we think line an a a more get give it's

Operator

Capital Your is from from Aleksey coming next Yefremov KeyBanc question Markets.

Aleksey Yefremov

on comments in hard historically, quarter to I guess, regarding more find wanted EPS. up to follow sequential than it's your where by $X. fourth QX fell EPS I

out? just Is $X.XX, based You're the year-over-year on going looking else $X.XX, around on things anything your besides at pointed somewhere you guidance. sequentially there that

Allen Mistysyn

No.

have going -- when sales that's of bigger the is you be in sequentially think the I you on to the -- seasonality decrease driver that.

quarter you hard choppy I let last at quarter-to-quarter, X third choppy think fourth including say, to has it as to our what's been really quarter. look years,

pretty I to you find back more year. a to So far think got normal go

said, I the I do less gross higher be think price. of like year-over-year, to I because but margin, tailwind the in sequentially of expect -- lower a

is about and I has investments sequentially harder because higher PCG SG&A our growth year's quarter of the things paint leaning in years long-term this and in probably growth think in in fourth within Heidi CBG. talked about, it than past stores initiatives on

quarter. is of So some our it is driving it. And that probably smallest

our follow-up quick adjustments then bigger have a would your of impact they our And on on So third quarter on stores. these year-end a some than fourth quarter.

Aleksey Yefremov

your on follow quick A up stores.

of competitor kind closing is in response players are Of to course, you gaining that, a who are large slowing shifting But have who there any you stores or either share? investments outright strategy. besides

Heidi Petz

great a It's that. take I'll question.

have think and this got customer to X,XXX only to strong confidence his I execute I advantage organization just more display. be is didn't us, and adapt And consistent confusion there prepared think that. would I go but help and Vince market I is reps is that customers our depth a a to you're say is back relationships data in X,XXX if in team the strategy, opportunity to marketplace, suppose this in doing own that our my stores I of great not full amount -- strategy, where of have in of earlier, we competitive there, a think, and our can and around an I and we've on successful. And out have comment spot lot well we on. and the that And conditions leadership

make we us that helps get the a we I a try consistent products and to with really stitch for But winning. together sure to demonstrate them with think help do an might shelf. complexity experience well they're on what the and to do too there we're a to to is strategy this very our out lot to placed Sherwin-Williams fight opportunity closely coming through of customers working out that

think this make do is uncertainty where we're opportunity. I So we competitors again, or seeing choices different store our on think, closings channels,

Operator

Shmois Capital. Loop Garik is coming from Your next from question

Garik Shmois

what strength the wondering called a you architectural, the I'm that. of data little drove course It commercial emerged in of sounds Pro Within contrary points quarter. some out just the over commercial to that

the curious there. just as outperformance So to

Heidi Petz

Well, that I the bit where And normal backlog to be soften a front think then half. a seeing half. cycle characterize in kind back you're strong would obviously back the to look more way to it would of

do heights would think characterize more the this our commercial a is position strength as it I that cycle. an So segments. of opportunity. I the about normal is We But in talk and amongst for us

our resources making are to people right focusing gains of help investments the and So right the be and customers these respond hard on duration to our share projects. the making and at we're ready decisions, through work going to these aligned

will regardless demand the in are differentiation part share we these step of And is we outlook, with these projects. environment. at think this our of take I contractors every of

they're And uncertainty navigating single so every as in up project. changes and/or come that

team Our make those completed is on that sure side there right getting time. by they're to side

James Jaye

Yes.

that's lead at the commercial time. where the look we you longest if piece, and think visibility I the have longest

of the Billing now. we half seeing which Heidi you pretty That's saying see of think to why comfortable the completions was our our feel our like with Architectural foot ability we're put again 'XX, about very on I perhaps back, res that repaint, but property little might we're about Index, we'll choppier comfortable terms to the are what softness, to the ability, feel things gas half back occur, into is said, those we of as to res cetera. gaps fill be come a referencing if start first might So 'XX, new et maintenance, starting with in

Garik Shmois

I helpful. sequential quarter? Was the versus weakness the in just Consumer second drove it decline Brands, That's the on else margins third Is margins? Great. change in quarter something up in volumes follow just there to wanted really the that quarter-over-quarter.

Allen Mistysyn

that primarily mentioned sequential it's well, -- -- targeting things. working in XXXX, shape, so primarily The our level to in decline talked have into our about means it's volumes tweak on make inventory when I we come X targeted a Garik, No, which line volume. sure we're out we we capital, levels. that inventory as with also we production inventory is stay in great our year-end and But

this segment. sequentially does down headwind have a So for with in is production number, low being gallons a that us -- single-digit

Operator

Baumgarten coming Zelman. is from question next Your from Adam

Adam Baumgarten

Just X me. for

about Europe, bit it year-over-year thinking across Just segments. seems was multiple better a it like

in Just the comps kind some improvement maybe there? of you're or even curious if bottoming just on seeing or ground demand that's

Heidi Petz

I'll QX. think Well, important will Al the start, point. hold point, we're where I margins, delivering the I'll in on increased of right ensure work up team last is side, comps team to here. some X year, to we are that in the trying But doing things and jump all very done things strong from against to businesses go is -- to we all recent driving are We'll I'm benefit has and X I'll our back a margin acquisitions. the point sure people not disciplined investments on Proud making pacing, our the watching a and of get in decision to that your pacing with in and we're are very cetera, sure XX% a investments PCG demand the to especially operating be laser-focused approach closely are the taking the really market as market. to et that making,

Allen Mistysyn

customers in think the this we said, some X value And that on not bring that for we're the comps. X sales bow in of right think your QX. point, our had the gains But to on We're double-digit for practice. putting just a it. X I appreciate focused willing I of pay Europe what strong in to X doing way. We're had and the right segments value that are where can and Heidi

be value That's work we as open to our we that need And well. the them, hard our while as so we're we're do. as shareholders and fact value customers, rewarded we bringing and bring to to growing why about

good So both as the in performance it's it's sales a bottom a Europe, and line result. and driving

Operator

Byrne next question from Bank from Steve Your America. coming is of

Steve Byrne

highlighted would volumes clearly, gains. And also by say for the contractor going your of of a would can help you drive you've multipronged fraction selected selected you to resi that loyalty loyalty. you What Sherwin-Williams was paint drive the Sherwin with contractor versus selecting say share do repaint the after more What that by perhaps you homeowner approach the homeowner. could

John Morikis

in the include as tree. we contractor the very Steve, at in focus what typically, a we've that years do the big have we repaint decision going in the work is repaint there's to they see largest continue that while repaint some getting opportunity, a in we terrific the hard And contractor approach. and Sherwin-Williams brand why that's it's as influencers working the and very this, finish the we've and rate we'll hard And a the expert. building some on double-digit daily color believe that don't an share with homeowners, the forward. teams big long on I'll is driver. Yes, to believe a basis with homeowner. contractor is right turns homeowner influencer residential success But But growth. a the with applicator, at Other that outpaced markets mind. which been would with relationships grow X specification, exactly started had investing decision We're residential professional contractor. we our specific had We've the residential opportunity of that's and And here. in just why

Steve Byrne

stores and end property retain to commercial you gains? to as resi management the share opportunity rank potential gain terms in paint you new rank as to those would How -- share share compared market construction. of in home how And an would new

John Morikis

of Then they families. when get opportunity. they to on They're of the commercial, opportunities. greatest the And deliver us, we get you We teams the don't. the are that's for them residential terrific all as our opportunity. will has repay on each those Steve. one offer greatest segments that have. management, Each opportunities how Then they the feed to We have property focused

our about approach, boxers, hands we there. decisive to it up center there's at gains, So to position we've bit we're greatest clear stand are but be when very offering want opportunity knockout I get talked But for of in our share of be little we're share of a We these not in the ring, segments you the to our to and relates a out were waiting residential repaint raised. looking and to amount as end look -- these for the want the openly the segments. other and stronger, terrific opportunities

pursuing one so of each these. we're And aggressively

going great to So after they all get out do, them. not which offers opportunities we're I'm determined to parse very and

Operator

question Eric next coming Research. from Cleveland is from Your Bosshard

Eric Bosshard

trend? guess, terms normal I'm to think the perhaps does in below SG&A grow back In current specifically, or How figure go investments do that? out you is investments, curious I of the And incremental to I'm 'XX do about trying XX%. you trend thinking share, what about normal or growth to sustain

Allen Mistysyn

Yes, Eric, I here's would how think.

think about our this we had planned it. not margin, than manage volumes we specific year. year as how up what operating into held the you better Here's showed, we coming SG&A. And And as know,

bit margin we what gross year. and expansion this than a coming performance was had margin little gross into Our better

investments normally lean more allowed in put opportunity would. and it So the us to we in than

next each We volumes segments. I dictate we investments XXXX, going say, year. more growth that have investments and of see back then those the we And unfold are margin to into and see much how level. what happening certainly a we normal gross as to year going will in put with would more into

Heidi Petz

that. to add would I Eric,

the every our or are and business possible. in And to hand, effort end-to-end we're a proposition approach that's chain, SG&A, we pay going And can't unit aren't to far make broad our a simply an I intentional talking the we're working excessive idle think proposition as in simplification willing can, of lot about that talk supply about lens is as and a talk customers about element assets value beyond very we thinking think at value our sure different I we're capital, working asked margin this customers. but across focus our looking and operating question what's through how include a to also goes here hand that. about goes capital tight just about important managing on a you for

but going to hit be think I working that for it's to drive improvement and manage obviously I to we're those capital closely. looking locked So margins. here, and SG&A operating to always room to are Allen relative

Eric Bosshard

then, follow And Helpful. Al, if up. I could

operating comment that is asking of terms you margin, levers say curious operating for how just I'm it managing to the you thinking as these managing fair play 'XX. Again, for degree can margin out. to some 'XX, of solve not expansion. different In on you're I'm

Allen Mistysyn

Eric. Absolutely,

environment I unfold absolutely but to that growth be choppy around believe is we XXXX. different on segments, whatever see going operating drive think to difficult. margin believe that of I macro see we mean our business, parts we XXXX. environment through still in color We're performance that going different the different we're just going to regions,

Eric Bosshard

We market. the outperform

Allen Mistysyn

That's right.

Operator

Fargo. Sison coming is Wells Your next Michael from question from

Unknown Analyst

deflation just This further the into to raw up Can might wanted prices materials you Mike. to see where the basket. press is speak most in Abigail you holding on be which more? I material for and

James Jaye

do that. to Happy Abigail, Yes,

little was say, TiOX relief. have we've the benefit where is of seen perspective. the we said, we've as Al it the the side next biggest said year. where But year-over-year I think commented, you petrochemical going as think quarter from around. into a as bit to made So be third been yet, determined is likely some it's necessarily heads moving us for a way basket hasn't would it of stickier. I its forward, into earlier, well while that commodities think about And I oil those

a we good pricing we're petrochemical to get it on in very customers, So as TiOX the update has where side providing the we'll the right again, given January. We that greatest the better our now, little been hold probably bit have marketplace ability goes it's solutions to and feel a our we've to relief. stickier. put about on into

Unknown Analyst

that were a Okay. quick persistent? little destocking then that about your to still that started has Or SPXXXXXXXXX you packaging And bit? tail off Is referencing. a question

Heidi Petz

with say for. sure similar really customers as our we we're choppiness environment, [Indiscernible] a to to behind continuing ability we capacity into won't that lockstep get got capacity, we've -- that market what's our have that but specific looking is talked earlier, would what that we I this through working as But the is are before, we're come demand it's to think some that capacity are in Well, our And through that this about the the just here, now that technology confident as online soon details that important making brand very I John mentioned it the right satisfy site. have not demand.

we're that So very confident here have we're to going that online shortly.

John Morikis

destocking. is there think I some

about spoken allow take our And through run have going customers to and customers Garland, we're more plants capacity point, to efficiently. additional this We that get excessive Our Heidi's our some as areas back the comes driving their of inventory in solutions they're technology them bring down. repairs online. wonderful to to that down

Operator

Cunningham Your from next Patrick question coming is from Citi.

Unknown Analyst

on This Patrick. is for Eric

you PSG the under within consumers have Given any CBG? or or seen gains DIY losses share relative pressure,

John Morikis

well we're the it to to year in comparisons, we're nearly but Heidi drive as continued making for we've core our very the the to quarter, drivers share, mentioned to I all PSG, comparisons The seeing and against even our improvement last XX% very gain Well, that business. business in stores that clearly share that backdrop. were easy back strong, to perform point key investments are future in need expectations Heidi of M&A mentioned one And growth. have in questions have our acquisitions. organic business, look stores, we arguably could that at and itself show the be. say in quickly core our a the watch, to it are we we for when and expectations business to you even about don't in you to accelerate that But fantastic is growth will this faster. going be

the will quicker. So investments that allow that us even making we're to capture

reassurance their down inventory and committed we've the them consumer to mentioned partners. to respond drive our business, to them. relates capacity got helping it to to We're with As growth. that the wonderful like have Heidi ability we things their

convert believe help that a category. is turn And can might as importantly, bringing products team their our So opportunity we're -- more from into on our our to continued be new in We're we're innovation. side, products. them customers' to trying people But financially. we're buyers team do members. back of help people we them to adding our in introducing team we there help the in train shoppers, position clearly stores

to but excited. don't turn do, of So advantage we're This we don't say, I into is market going that and type what we're for hope for, we would know our arguably, of most type this hope to market, it to shareholders.

Operator

Ceccarelli Aron Berenberg. is from question coming next from Our

Aron Ceccarelli

on I simplification. have product X

lot can formulation and the where of inside what me little done, a from if And also reducing this better Maybe have outside number of understand help here? You and have can, SKUs. are a rightsizing doing quantify bit been what go and you can in process? been we the we you quite simplification can

Heidi Petz

is Aron, here. characterize say would this Yes, road an I the And thinking that innings. enterprise. map we're way the Really across is end-to-end aggressive would through there's confident I this early effort ahead truly

adopted point So that starting basket forward. I you rationalization all it's to SKU setting mentioned understanding materials up important an is it way going what we the that's raw with a really and we're through mindset whether to customers. here that But think it's is formula have rationalization, our the

about product we, to we're looking step always complexity of out so further, of of our as I opportunities lot development sure a innovation how mean, part And part make we business. to Coatings if going our of of John process. mentioned take it's that as we're we new rationalization look at I Group, footprint. the a still And it take think you even Performance at opportunity have

land to something months, going but that This think next isn't forward. XX So XX at the we constantly work. team we're be looking is the or to be going I hard at in going

John Morikis

And front row I think won't say show. a I will humble this person, this, Heidi's she but strength a is, here this and say having she's to

think, our that right. this a take that. a is our to many norms, do we line. got those have if things that ask bottom opportunity got look effort a of the we've driving our norms leader traditions that. do of and respectful a an at to to and She's a traditions them to And simplification approach lot way And done, opportunity, I and got and example XXX-year-old very You've a There's great and the better of is are there's company. to

our going stronger, I think to to We Heidi our much pursue customers is I there use opportunity ways company digital come into ways. she's further in to that is and better leading really more responsiveness that Shams. much get approach, didn't business our out the in efficient think that to data that better the available an in there some past. around and but surface new team we leading We've just will the differentiate scratched to the opportunities our haven't are approach we terrific that have

Aron Ceccarelli

And I PSG. have follow-up a on

been earlier vertical. because property comps. very commercial again, this this on strong has the against touched tough year. incredibly also some color You very strong provide vertical Maybe on QX management you And can

next volume how to year, growth momentum going of think like about terms the into you I So would understand please? in

Heidi Petz

demand is underlying Yes. The solid.

that say year. a same. the seen the travel we've we're the I is segment addressed consistent it reps demand. It's only regardless continue convenient with now unique into to our the property and here of goal can relative much we here. these bit management ability deliver. and our to our believe to of being to driving serve is -- turns stores, CapEx But like consistently return to would of lot deferred as as residential leverage size demonstrating school really make the I a that by see and that our we'll apartment tools segment-specific and delayed contractors, momentum our are experience possible coming solutions And think location I our next the Sherwin-Williams the or influenced to of that a maintenance improving of some in new want

taking we're confident will, we're going that number share with gas So if exclusive our contracts, our we're you and foot of or we're continue sole preferred going increasing to forward.

Operator

our I Heidi Petz, Officer, Chief Please Q&A the remarks. to for That and ahead. Operating now session. back will concludes hand President conference closing go our

Heidi Petz

you. Thank Great.

this close So out I year to with momentum. expect

recognize takes and we that say, believe heard humility loud -- we're share -- we point is I are that and our the clear We growing that we where to no us think you've here. line. finish there and

forward to So we're here. move determined

can we're that our execute But to to at going and have out our going that movie that some we I have outperform forward as we'll me and confidence know before. talking forward, about reach free key is those ahead. line of what is investments conclude choppiness feel that this XXXX, the Going wonderful market. ability here's outlook a confidence to with Jim you, And confidence this is have additional look looking we all gives talked we Any just tell team, know and and And in my is on January clear together reality to our deliver please what holiday. will you to be there seen questions, our to I plans we our shareholder in working value. Eric, our with of combined about strategy we that

Operator

Thank you, everyone. This concludes today's event.

wonderful and participation. may you You at this disconnect have time, for your a day. Thank

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