The Sherwin-Williams Company announced its financial results for the first quarter ended March 31, 2015. Compared to the same period in 2014, consolidated net sales increased $83.7 million, or 3.5%, to $2.45 billion in the quarter due primarily to higher paint sales volume in its Paint Stores and Consumer Groups. Unfavorable currency translation rate changes decreased consolidated net sales 3.1% in the quarter.
Diluted net income per common share in the quarter increased to $1.38 per share from $1.14 per share in 2014. The increase in first quarter diluted net income per common share was due primarily to improved operating results of the Paint Stores and Consumer Groups. Currency translation rate changes decreased diluted net income per common share by $.04 per share in the quarter.
Net sales in the Paint Stores Group increased 7.5% to $1.46 billion in the quarter due primarily to higher architectural paint sales volume across all end market segments. Net sales from stores open for more than twelve calendar months increased 6.4% in the quarter over last year's comparable period. Paint Stores Group segment profit increased $30.3 million to $176.6 million in the quarter from $146.3 million last year due primarily to higher paint sales volume. Segment profit as a percent to net sales increased in the quarter to 12.1% from 10.8% last year.
Net sales of the Consumer Group increased 8.1% to $351.7 million in the quarter due primarily to the initial shipments of HGTV HOME® by Sherwin-Williams paint to Lowe's stores. Segment profit increased to $55.4 million in the quarter from $51.1 million last year due primarily to improved operating efficiencies. As a percent to net external sales, segment profit increased in the quarter to 15.8% from 15.7% last year.
The Global Finishes Group's net sales stated in U.S. dollars decreased 5.6% to $469.6 million in the quarter. Unfavorable currency translation rate changes decreased net sales by 6.9% in the quarter. Stated in U.S. dollars, segment profit decreased in the quarter to $38.9 million from $46.5 million last year due primarily to unfavorable currency translation rate changes, which decreased segment profit $4.4 million in the quarter. As a percent to net external sales, segment profit was 8.3% in the quarter versus 9.3% last year.
The Latin America Coatings Group's net sales stated in U.S. dollars decreased 8.9% to $166.2 million in the quarter due primarily to unfavorable currency translation rate changes partially offset by selling price increases. Unfavorable currency translation rate changes decreased net sales by 13.9% in the quarter. Stated in U.S. dollars, segment profit decreased in the quarter to $9.5 million from $10.0 million last year due primarily to increasing raw material costs and unfavorable currency translation rate changes partially offset by selling price increases. Unfavorable currency translation rate changes decreased segment profit $3.4 million in the quarter. As a percent to net external sales, segment profit improved in the quarter to 5.7% from 5.5% last year.
The Company acquired 2.00 million shares of its common stock through open market purchases in the quarter. The Company had remaining authorization at March 31, 2015 to purchase 3.23 million shares.
Commenting on the financial results, Christopher M. Connor, Chairman and Chief Executive Officer, said, “Our Paint Stores Group posted another quarter of strong operating results with positive architectural volume growth across all end market segments and good productivity on our S,G&A investments. Consumer Group improved its operating results through improved operating efficiencies. The HGTV HOME® by Sherwin-Williams paint program at Lowe's began shipping late in the quarter and will be in all Lowe's stores by May 1. Our Global Finishes and Latin America Coatings Groups are managing through the negative effects of currency devaluation and weak end market demand in some geography. In total, it is gratifying to report another quarter of record sales and earnings per share.” “We continued to invest in our business by opening seven net new locations in the Paint Stores Group. Our working capital ratio (accounts receivable plus inventories less accounts payable to sales) at March 31, 2015 was 10.9% compared to 11.0% last year. During the quarter, we continued to buy shares of our stock, and we increased the dividend rate to $.67 from $.55 last year. Our balance sheet remains flexible and is positioned well for future acquisitions and other investments in our business.”
“For the second quarter, we anticipate our consolidated net sales will increase six to eight percent compared to last year's second quarter. At that anticipated sales level, we estimate diluted net income per common share in the second quarter of 2015 to be in the range of $3.70 to $3.90 per share compared to $2.94 per share earned in the second quarter of 2014. For the full year 2015, we expect consolidated net sales to increase a high single digit percentage compared to full year 2014. With annual sales at that level, we are reaffirming our guidance that diluted net income per common share for 2015 to be in the range of $10.90 to $11.10 per share compared to $8.78 per share earned in 2014.”
The Company conducted a conference call to discuss its financial results for the first quarter, and its outlook for the second quarter and full year 2015.
