SHERWIN WILLIAMS CO — Call Transcript 2026

Good morning. Thank you for joining The Sherwin-Williams Company's review of first quarter 2026 and our outlook for the second quarter and full year of 2026. With us on today's call are Heidi Petz, Chair, President, and Chief Executive Officer, Ben Meisenzahl, Chief Financial Officer, Paul Lang, Chief Accounting Officer, and Jim Jaye, Senior Vice President, Investor Relations and Communications. This conference call is being webcast simultaneously in listen-only mode by Accesswire via the Internet at www.sherwin.com. An archive replay of this webcast will be available at www.sherwin.com beginning approximately two hours after this conference call concludes. This conference call will include certain forward-looking statements as defined under US Federal Securities laws with respect to sales, earnings, and other matters. Any forward-looking statement speaks only as of the date on which such statement is made, and the company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. A full declaration regarding forward-looking statements is provided in the company's earnings release transmitted earlier this morning. After the company's prepared remarks, we will open up this session to questions. I will now turn the call over to Jim Jaye. Thank you, good morning to everyone. Sherwin-Williams delivered strong sales in a quarter characterized by heightened global uncertainty and persistent demand softness in most end markets. Our growth investments and ongoing new account and share of wallet initiatives continue to yield results as sales exceeded guidance on a consolidated basis and in all three reportable segments. Consolidated sales grew by a high single-digit%, inclusive of a low single-digit contribution from the Suvinil acquisition. Reported gross margin expanded by 90 basis points, inclusive of a dilutive impact from Suvinil. This was the fourteenth quarter out of the last 15 quarters we have delivered year-over-year gross margin expansion. Against a challenging prior year comparison, SG&A increased by a mid-single-digit percentage, excluding the anticipated headwinds from our non-annualized acquisition of Suvinil, non-annualized operating costs and depreciation related to our new buildings, and foreign currency translation that we anticipated to unfavorably impact our SG&A as a percent to sales by approximately 100 basis points. Our full year guidance of a low-single-digit increase in SG&A remains unchanged. Adjusted diluted net income per share in the quarter increased by a mid-single-digit percentage, and adjusted EBITDA increased by a high-single-digit percentage. Net operating cash improved by $200 million, driven by an increase in net income and working capital being a lower use of funds. Our full year guidance for adjusted diluted net income per share remains unchanged. We continued to execute our disciplined capital allocation strategy in the quarter by returning $773 million to shareholders through share buybacks and dividends. We ended the first quarter with a strong balance sheet and a net debt to adjusted EBITDA ratio of 2.5x. Let me now turn it over to Heidi, who will provide some color on first quarter segment performance before moving on to our outlook and your questions. Thank you, Jim, and good morning to everyone. I want to begin by thanking our more than 64,000 employees for executing our strategy in what remains a very challenging operating environment. We are continuing to deliver reliability, consistency, and solutions for our customers at a time when these are more valuable than ever. Our differentiation continues to widen the gap between Sherwin-Williams and our competitors, as evidenced by our strong top line and robust new account growth across the business. Looking at our segment results in the first quarter, I'll begin with Paint Stores Group, which grew by a mid-single digit %. Price mix and volume both increased by low single-digit %, with price mix increasing more than volume. Effectiveness of our January first price increase is trending slightly better than expected. Our Protective & Marine team continued to deliver impressive growth for us as sales increased by double digits versus a high single-digit comparison. It was the seventh straight quarter of high single-digit growth in this business. In the commercial business, sales increased by mid-single digits in what remains a choppy market, reflecting our very targeted and ongoing share gain efforts. These efforts are also evident in residential repaint, which returned to mid-single digit growth in the quarter. Low single-digit growth in property maintenance was encouraging, while demand in new residential remained very challenging as we anticipated. Segment profit grew by low single digits with segment margin basically flat. We opened 21 new stores during the quarter and as planned closed 27 or about half a percent of total PSG stores. As we have done for decades, we continually assess and optimize our store portfolio to drive profitability, strengthen operational flexibility, drive improvement in Return on Net Assets employed, and ensure we maintain the highest level of service for our customers. We still expect to open 80-100 new stores for the year. Consumer Brands sales exceeded our expectations, driven by high-teens growth from the Suvinil acquisition. Price mix and FX both increased in the low single-digit range, and volume decreased in the mid-single-digit range. Group sales, excluding Suvinil, increased by low single digits, driven by high-teens growth in Europe and high single-digit growth in our legacy Latin America business. Softness persisted in North America, where sales decreased by low single digits. Adjusted segment margin increased, driven by the strong top line with flow-through of 34.3%. In Performance Coatings Group, sales increased slightly above the mid-single-digit range we expected, with growth in every division and region. These results reflect the strong new account growth focus we have spoken about over the last year, as demand in our underlying core business is still declining in some end markets. Volume in the quarter grew by a low single digits, acquisitions were slightly positive, price mix was flat, and FX was a tailwind. Automotive Refinish sales increased by a low teens percentage, driven by high single-digit volume. The growth was broad-based, with sales up by double digits in all regions, providing further evidence of the value we are delivering in this end market to win new business. Packaging continued its strong performance as sales increased by high single digits against a high single-digit comparison. General Industrial, Coil, and Wood also delivered solid growth. Group sales expanded in all regions, including double-digit increases in Asia Pacific and Europe. Adjusted segment profit for the group increased by mid-single digits, and segment margin was flat. Higher incentive compensation related to the strong year-over-year sales, along with the significant FX headwinds, drove segment SG&A higher, resulting in muted flow-through. These same dynamics, in addition to our non-annualized new building costs, also drove SG&A higher within the administrative segment. The slide deck accompanying our press release this morning provides more detail on second quarter segment results. Moving on to our guidance. The assumptions we provided in our January call and slide deck largely remain intact. What hasn't changed is that our customer feedback, as well as the indicators we track, continue to signal little support for meaningful recovery in most end markets. What has changed is the Middle East conflict, which has added further complexity and uncertainty in navigating the macro landscape. Our team has repeatedly demonstrated its ability to manage through crises, most recently during the pandemic and the US supply chain disruption, to name just a few. I am highly confident we are well equipped to manage through this newest challenge and continue supporting our customers at the highest levels. Let me provide some perspective here. First, we expect to see some negative impacts on demand from recent events as the year progresses, though it is difficult to predict the magnitude at this time given the highly fluid nature of the situation. I will remind you that this is our fourth year in a row we have been operating with the expectation of getting no help from the market. We know we are operating in a share gain environment, and we will continue to be very aggressive here. We see opportunity in uncertainty. We will continue to support our existing and new customers by being the most reliable and consistent business partner in our industry. From a raw material perspective, our first objective is certainty of supply. The good news is that over 80% of our consolidated revenue is in North America. The majority of raw materials for these sales are sourced in region and remain largely insulated from supply disruptions tied to Strait of Hormuz volatility. In areas such as Asia Pacific and EMEA, where supply could become more challenged, we are managing risk closely. Our focus over many years on building strong relationships with strategic suppliers versus transactional ones is a competitive advantage and should continue to serve us well. In terms of raw material price cost dynamics, costs for oil, natural gas, and key petrochemical feedstocks such as propylene have inflated and remain volatile. As we have previously indicated, sustained inflation in these commodities typically takes about a quarter or two before we begin seeing an impact in our P&L. Specifically, we would expect to see these inflating costs impacting us more materially as we move through the second quarter and into the second half of the year. Our industrial business is seeing inflationary pressures first, starting in APAC and EMEA, and to a smaller extent in North America. More recently, we have started to see the inflationary impacts in our North and South American architectural businesses. This leads us to increase our full-year raw material inflation outlook to the range of up low to mid-single digits. In this environment, we continue to focus on securing incremental volume balanced with appropriate and decisive pricing and cost out actions that allow us to maintain the products, services, and supply solutions which drive productivity and profitability for our customers. In terms of pricing, we are out across the business with incremental targeted actions by customer, geography, and end market. As a result, our expectation for consolidated price mix for the year increases to the high end of our low single-digit range. We are actively working to limit these increases for our customers by accelerating meaningful and aggressive cost reduction actions. At the same time, we expect continued volatility in the raw material environment as the year progresses, and we are prepared to implement additional increases if necessary. The slide deck issued with this morning's press release includes our expectations for consolidated and segment sales for the Q2 2026. Our consolidated sales and earnings guidance for the full year are unchanged, though our deck outlines some adjustments in the mix of volume, price, and FX. The deck also contains other details you may find useful for modeling purposes. Sherwin-Williams remains well-positioned to outperform the market. We are highly confident in the clarity of our strategy and importantly, our team's deep experience and ability to out-execute in this environment. We remain deeply focused on the success of our customers while continuously assessing and adapting to market conditions and controlling what we can. Whenever there is uncertainty and disruption, there is significant opportunity to demonstrate what makes Sherwin-Williams so unique. This concludes our prepared remarks. With that, I'd like to thank you for joining us this morning, and we'll be happy to take your questions. Certainly. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. For Participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. One moment, please, while we poll for questions. Your first question for today is from John McNulty with BMO Capital Markets. Yeah, good morning. Thanks for taking my question. Maybe a question on the price and cost dynamic. It seems like on your pricing commentary, sounds like it's a little bit more surgical than maybe you've taken in the past and a little more, you know, customer-specific or very end market specific. I guess given the global cost pressures that we're seeing, why is it sounding maybe a little bit more surgical than usual and maybe a little bit less of a, you know, full across the board type price move? Can you help us to think about that? John, good morning. I'll start, I'll hand this over to Ben here for some color commentary. I do want to just demonstrate this is an opportunity. We've operated through so many different types of cycles where volume is clearly key, the discipline of the team to know when and where to go with pricing is on clear display. You see it in our first quarter results. I want to take a moment before I hand this over to Ben. I said this in our prepared comments. It's the credit to our 24,000 employees globally that are operating belly to belly with customers and have that intimacy so that when we do need to take pricing, we've got high credibility that it's absolutely out of necessity. I'll hand it over to Ben to maybe give some comments on a more surgical approach. Hey, good morning, John. It's Ben Meisenzahl. Just to add to what Heidi said here, I think one, you know, one place to anchor is that we have more than 2x the pricing now in this new guide than what we had in the original guidance that we gave you in January. It reflects, if you think about the phasing by the regions, we obviously know that Asia-Pacific is maybe more impacted right now. That's gonna impact EMEA. North America comes later. You also have the phasing where industrial is impacted sooner than you would have architectural. That's because a lot of the solvent pricing that you would expect is you'd see first. Even the way that we buy, you know, is a variable here. You think about, you know, we're like 50/50 between contractual and spot buying. More of our architectural business is on a contract. You would expect on the industrial side, you're gonna see more of that spot buying where you got a more varied range of raw materials. These are all things that have gone into, you know, how we thought about the pricing here. Heidi's absolutely right. You know, we're gonna monitor and watch. We're gonna work with our customers. We're also really early in the year still. We have a lot of opportunity. If our base case doesn't play out the way that we think, we're gonna have, you know, that ability to go out and get additional pricing. Lastly, I mean, we always talk about it is balancing price with the right volume. As we've looked at some of the competitive opportunities, we're not looking for all volume, you know, that is an opportunity that we want to make sure that we don't, we don't forget about here. Thank you, John. We do ask to please limit yourself to one question. If you have any additional questions, you may reenter the queue by pressing star one. Your next question for today is from Duffy Fischer with Goldman Sachs. Yeah, good morning, guys. Just a question on cost. If you could kinda break the basket down a little bit, where you've seen the increase and, you know, going from kinda low single digits to low to mid, what is that based off of vis-a-vis spot prices? Do you think that we've put in the peak already for a lot of, you know, the VAMs, the propylene, all that kind of stuff, and they're starting to roll over? Or do you think they'll continue to go up from there? Just some help of kinda what that increase is vis-a-vis what you think the market's gonna show us over the next several months. Yeah. Good morning, Duffy. It's Jim. I'd say where we're seeing the most pressure, as Ben mentioned, would be more on that industrial basket. You're seeing that in the solvents Resins, those petrochemical-based commodities. You know, propylene drives about 75% of our basket, and that pricing's up because of the Middle East, forecasted, you know, maybe up 50% more through the rest of '26, related to those disruptions. You know, the solvents are elevated as well. Epoxies, I would say as well. TiO2, for the most part, has not elevated as much yet. I think we've talked, Duffy, offline about the sulfur dynamics coming out of the Strait of Hormuz. The good news is we're not really buying sulfate TiO2. I understand it's a global market, but we're more on the chlorinated side, so, I think that's important. The other thing I would say is, again, as Heidi mentioned in her remarks, you know, 80% of our sales are in North America, and the vast majority of our raws that we're buying come from that region. From a supply perspective, we feel very good. The contractual buying that Ben mentioned, the way we buy, is also helping us navigate these initial headwinds. Thanks for the question. Your next question for today is from David Begleiter with Deutsche Bank. Thank you. Good morning. Heidi, just a small thing. On your guidance for raw materials, you removed the term select commodity inflation from the prior quarter slide deck. Can you help us with what that meant and why that was removed? Thank you. Yeah, I'll take that one, Dave, David. I think when we talked about it earlier in the year, we just wanted to make sure that, you know, people were indicating that tariffs were part of it, and we wanted to say, "Hey, commodities were moving a little bit as well." We just took that off now because it's very obvious that the commodities are moving upwards. I wouldn't read much into that. Thanks for the question, Dave. Your next question is from Chris Parkinson with Wolfe Research. Great. Thank you so much. Heidi, you mentioned we've been consistently in a share gain environment over the last, you know, several years. Can you just give us a kind of a quick update, just given the current dynamics on how you're thinking about growth spend, how you're thinking about, you know, net new store openings and closures? Just any dynamics that you can help us, you know, think about not only 2026, but also the trajectory which you still see for 2027 and 2028 would be particularly helpful. Thank you so much. Yeah. You bet. Good morning, Chris. You know, there's a lot of volatility, obviously, in the macro. There's also a lot of volatility in the competitive environment. I also said in the prepared remarks, that is absolutely our opportunity. You're gonna hear us talk about this jump ball environment. In this, in this economy and in this competitive landscape, we're gonna be extremely aggressive in making sure that we continue to take more than our fair share of volume. I'll point to a couple examples here, then I'll come back to the stores in your second question. If you look at our res repaint segment, we're up mid-single-digits in a flat to down market, focusing on, you know, a lot of these share gains. We see interiors are increasing, some bidding activity. We're gonna take advantage of that. We see the exterior backlogs are very healthy. We're gonna take advantage of that. Our team has been out laser-focused, Justin Binns and the stores organization, committing to aggressive new account activity. I would tell you it's the strongest we've seen in a long time. Even though there's some slowing in the market, our teams are out chasing square footage, earning business with these contractors every single day. I'd point to our commercial segment. We're outperforming. There's soft completions, yet we're up mid-single digits, while completions are down double digits. Again, some good bidding activity out there. We see some positive signals that there's uptick with office tenant improvement, some modest uptick in multifamily starts that won't benefit us for at least 12 to 18 months. We're up year-over-year, all four quarters of 2025 and 2026 because we've been completely focused on demonstrating value with these contractors. Let me take a moment and just give you a bit more by segment. If you look at our property maintenance, we're up low single digits here in a market where turns and CapEx were both under pressure. Continue to be laser-focused on how we can add value. Even in the DIY space, we're up mid-single digits in stores, that premium DIYer is holding up a bit better than that value-conscious DIYer that prefers a home center environment. Our Protective & Marine, seventh straight quarter of being up at least high single digits. It's all share gains. We're going to be relentless in being very targeted on our strategic investments, as we are obviously gonna be very focused on taking costs out on the admin side. To your point on stores, it's gonna be a continued disciplined process of looking at our portfolio. Ultimately, we're gonna be driving a focus on Return on Net Assets employed. It's incumbent upon us that as we're looking at that portfolio, as we've done for decades, we're going to make sure that we're driving profitability and, you know, strengthening our flexibility and our agility as we see migration, as we see changes in the competitive landscape. We're going to be very thoughtful in chasing that volume. Thanks, Chris. Your next question is from Ghansham Panjabi with Baird. Yeah. Thank you. Good morning. On the 2026 guidance, I think initially you had volumes up low single digits for your original expectation, and then, you know, it seems like now it's guided towards low single digits decline. Is the delta just your reflection of what you think the market will do the rest of the year, just given the, you know, sequence of events? What are the offsets as it relates to the intact earnings expectations on the plus side? Thank you. Hey, Ghansham, it's Ben. On the volume piece, yes, I mean, you heard us talk about a lot of the stronger price that's coming through. We recognize that with some of the inflation that there is going to be a likely demand impact. I think what you see in our guide, it, you know, keeping it, you know, full year in that same range, it's how we get there is very, very different. We expect maybe volumes to be a little more muted. You think through, you know, the consumer sentiment numbers. I mean, we've seen the lowest level on record, even going back to, you know, GFC and COVID. We've seen, you know, prints that are much worse than that. Some of our guidance is baking in some of the expectation on that volume being softer there. Again, as we talked about on the prior question, price is obviously an offset to that, and that helps us get to that same kind of guide for the full year. Thank you, Ghansham. Your next question for today is from John Roberts with Mizuho. Thank you, Claire. The current administration has turned its attention towards housing affordability. Do you see anything in the proposed actions that you think could help out the end markets materially? Hey, John, it's Ben. We've been monitoring obviously a lot of what they're doing. We agree that affordability is a big part of the equation. We've talked pretty openly that we thought rates was maybe gonna be the first indicator that could drive additional unlocking, you know, demand, then affordability and consumer confidence, you know, have been maybe more at the forefront. Our opinion is that, you know, we'd like to see, you know, some more of the supply opportunities, you know, versus some more of the gimmicky demand. You know, you've seen the 50-year mortgage, you've seen, you know, the Trump homes, you've seen some of these other, you know, maybe shorter term unlocks. What we're looking for in some of these policy changes would be how do you get, you know, local governments working better with, you know, the Federal Government to open up land that makes it, you know, more cost-effective for the new home builders to lower their costs. That obviously has a trickle-down effect to the affordability piece for the consumer who's buying the home. We welcome obviously any of the unlocking of affordability, you know, type mechanisms, and we're watching that closely to see how we should be reacting and be ready to act when you do see something unlock. Thank you, John. Your next question for today is from Vincent Andrews with Morgan Stanley. Thank you, and good morning. Could you talk a little bit about the margin improvement in Consumer Brands, and I guess from a couple of different lenses? One, you know, should we think about that as a base level? Typically, I believe those margins go up in the middle of the year, so will they be improving sequentially? Was there any reallocation of costs among the three segments? I recall in prior years, sometimes at the beginning of the year, you've changed the cost allocation of, you know, the paint supply from Consumer Brands in the other two segments. Thank you. Hey, Vincent, it's Ben. On the 1st part of your question, the margin improvement in consumer brands that you saw, a lot of that is coming from our global supply chain efficiencies. We've talked many quarters over about a lot of the simplification and continuous improvement culture that team has, we continue to see, you know, benefits there. If you remember the 2nd half of last year, where our production, you know, was lower than what we had called out the 1st half of the year, that team is getting lean in a lot of different ways. That's a big part of what you see in the improved margin there. You also have some opportunities where our price mix has been a little bit better. You think about premium gallons, improving in that segment, and maybe a little bit of price ahead of some of the things that Heidi and I have already talked about with inflation. You see that there in that part of it there. There is no reallocation. I know back in 2023, we talked about how we had that fixed cost allocation between the businesses. Nothing here. You should expect to still see low 20s margin in this segment as we've talked about. Thank you, Vincent. Holly? Your next question. Holly, are you there? Your next question is from Mike Harrison with Seaport Research Partners. Hi, good morning. was hoping that we could go back to pricing. It seems like maybe the realization that you're getting on that 7% increase from January 1st is a little bit better than you had initially thought. I'm curious, at this point, have all of those conversations with customers taken place and that the pricing is what it is, or are there still some conversations yet to happen? In terms of potentially needing another increase in response to what's going on in the Middle East and higher raw material costs, has the window passed to announce a price increase ahead of this year's paint season? Would you be willing to, kind of break tradition and go with a mid-season increase? If that's what's necessary or if you see competitors doing that. Thank you. Yeah, Mike, good morning. It's kind of a two-part question. The first part of your question relative to the January increase, yes, the realization is better than we expected. Yes, all of those conversations have happened and are out there. As it relates to has the window passed or how do we think about maybe more of this turbulent environment, we've done this in the past. In fact, I did this when I was running stores. When you're in a more volatile environment, you know, what we're not gonna do is go out with a big increase in the middle of the season and announce effective immediately. What we might do, if we need to go out with price, we will go out with price, in the middle or the beginning or the end of the season. We'll do it the right way. We'll sit down with our customers. We'll make sure that they are prepared, so they're not stuck absorbing this, and we can work with them to get those into their bids. So we'll do it very methodically. Let me be very clear. If we need to go again, we will go again. Thank you, Mike. Your next question for today is from Greg Melich with Evercore ISI. Hi, thanks. I'd love to dig a little deeper on the gross margin expansion in the first quarter, I guess the 90 basis points. What would it have been without the Suvinil degradation? If you think about going forward, do you think gross margins could be up each quarter this year-over-year? Or does that volatility mean there could be some quarters where it contracts year-over-year? Thanks. Hey, Greg, it's Ben. You know, we haven't been calling out, you know, the specifics with Suvinil. I could tell you know, that it's a multi-basis point, you know, level up. You know, we would have been over a 100 basis point improvement without Suvinil in the quarter. As you look forward to, you know, prior quarters, you do normally see our gross margins increase into the selling season as our sales improve and we get, you know, better cost, you know, margin dynamics. There could still be a little bit of lumpiness. We've talked about even with our, you know, midterm gross margin target, that it's not a straight line up, that it, you know, that it is a little bit lumpy. We would expect that, you know, we continue, you know, to get a little bit of, you know, expansion there. Obviously all the things that we're trying to manage through with the Middle East conflict and the raw materials, that plays into it as well. If, again, you look at the normal phasing quarter by quarter, you should expect, you know, us to see improved gross margins as we go into the spring and summer selling season. Thanks, Greg. Your next question for today is from Arun Viswanathan with RBC. Great. Thanks for taking my question. I guess I was a little bit pleasantly surprised by some of the volume comments and performance in, across a couple of your businesses. Maybe in PSG, still very strong, I guess, or relatively solid, resi repaint. Do you see that continuing? In, in PCG, you know, better than expected performance out of Refinish and general industrial and coil turning around. Do you see those continuing as well? Thanks. The answer is absolutely, we see those continuing. Everyone, I'll point to res repaint, just a little bit more color on that. It's the actions that we've taken over the last three to four years that help Sherwin-Williams has never been better positioned. I would tell you we're better positioned now than even the turbulent last two, three, four years. The controllable mindset. Residential repaint, I won't repeat what I said earlier, but this is an area where we're bringing really important innovation forward and technologies to help job site productivity. An example, we just launched a product, a system called the Emerald Symmetry, which is our best performing interior product that we've ever produced. These have performance characteristics that are putting our contractors in a position to get on and off of job sites faster. The secondary benefit of something like this is this happens to be zero VOC and a plant-based interior coating. Helps us on a number of fronts. We're taking the time to make sure that we're setting our contractors up for success. When we do that, we get rewarded. Your point on some of the important businesses in PCG, just take a moment here. This doesn't happen by chance. We talk about success by design. You mentioned Refinish. Very strong momentum here. We're up double digits in every region. We're getting price in every region. I think that is a demonstration of a clear value proposition that customers are really understanding. There's a lot of dynamics, certainly within the industry that we watch closely. What we don't do is sit back and wait for the market to correct. We're out chasing new business aggressively. Our direct installs continue to grow double digits in the quarter. There's a lot of runway in terms of future share gains there. Packaging, another fantastic example. We're up high single digits. The global beverage market is up low single digits. The global food market is flat to down low single digits. It tells you that we're up high single digits. What we're doing is working. Coil, general industrial and wood all have really positive stories. The coil business, yeah, we're up mid-single digits, and that's despite a lot of softness, you know, that's tied to the North American commercial, residential construction, tariff uncertainty. The teams are out aggressively hunting. GI is another great example. General finishing, heavy equipment, they're both up double digits. We're out trying to offset core erosion and core softness there. Industrial wood being up low single digits despite, you know, the correlation to residential there. The soft residential end markets that impact, you know, wood furniture, flooring, and cabinetry. Despite that backdrop, the team's out chasing. Here's the punchline: We're building new muscle. And I do expect that we will continue to keep our foot on the gas and take share. Thanks, Arun. Your next question for today is from Kevin McCarthy with Vertical Research Partners. Yes, thank you and good morning. I had a clarification and a question. On the clarification side, Ben, I think you made a comment that the price embedded in today's guide is more than twice what you had included last quarter. I guess the clarification was, is that all to do with the January 1 increase and the realization against that? Or have you implemented incremental pricing since the onset of the war on March 1? Then just my question is on raw materials. You're ratcheting the guide up a little bit, although frankly not as much as I might have thought. I was wondering if you could just talk about the quarterly cadence of that. I think you're a majority LIFO company, so maybe you can kind of speak to the accounting flow through and, you know, the assumptions that you're making on duration of the conflict there. Thanks. Hey, Kevin. Yeah. To clarify on my price comment from earlier, that is on the consolidated pricing. That would've been everything that we did in January with stores, that would be everything new that we've done since then. You see in our guide that we took up our pricing and Performance Coatings Group, and it goes back to the comment we made, industrial with all the more solvent-borne type raw materials with the international locations, that's where we're seeing it first. That kind of phases into your second question of, you know, how do you see, you know, the raw materials flowing through? Our updated guide, you know, to low to mid on a full year, you have to expect that, you know, we're, you know, the first half of this year, even as we have some of the deferrals, you don't see it as much in the first half. You're gonna see it heavier in the second half, and as you exit the year, you know, you're gonna be at the higher end of that, you know, upload to mid-single digits. We're managing that, you know, closely. As I mentioned earlier, you know, we have enough price with what we see right now for what that inflation is. If the baseline changes, as Heidi mentioned, we're willing to go out and work with our customers to implement new pricing. There's plenty of time, you know, in the year to do that. That's, you know, how we're gonna manage that. Thanks, Kevin. Your next question is from Josh Spector with UBS. Yeah. Heidi, good morning. I'll go down a similar line of questioning as Kevin. I mean, it's surprising to hear that at the exit rate you're talking about the high end of low to mid-single digits on raws. I mean, we have math out there that says you could see raws up 20% in that range, and that seems more consistent with some of the competitor price increases that are out there. I don't know if due to your North America exposure, you'd say that inflation is substantially less, or if how you're buying those raw materials and maybe some of the contracts either give you more protection for this year, so this is more of an early 2027 inflationary event that you would see, or if there's something that gives you more permanent kind of protection against some of that. Can you talk about that a little bit and help us understand maybe what's going on that's different for you guys versus some of your competitors? Josh Spector, it's Ben Meisenzahl. I can't comment on how our competitors buy, but I can tell you know. Heidi Petz called out our, you know, strategic relationship with key suppliers. Our, you know, our procurement is maybe tighter than some of the others. We're using that as a strategic advantage so that we're not having to maybe pass as much price to our customers as some of our competitors might have to do right now that aren't advantaged because of the way that their contracts are set up. We do have a number of spot buying. We aren't seeing, you know, the exit rates and that, you know, 20% range that you're seeing. Again, I think you alluded to the mix of our business, the architectural and the industrial. That probably has some impact on that. Then again, I'll point back to, you know, 50% of our business on contracts. That's an advantage, you know, for us right now. Thanks, Josh. Your next question is from Matthew DeYoe with Bank of America. Good morning, everyone. Heidi, you talked a bunch about the packaging, and it's been brought up a few times, and clearly the numbers are really good. As we move into next year and we lap some of these regulatory shifts, like, how much of what you're accomplishing now is because of that catalyst? Do you expect you can continue to outgrow the industry like this much, or would you expect growth to shift closer to, you know, that low single digit level that the industry is kind of growing at? It's an interesting question because I think based on our preferred technology and our position, to be ready for a lot of what's coming, you know, I'm sure with EFSA, the European Food Safety Authority's ban on BPA is scheduled to take effect in Q2 of this year. That we're at the very front edge of that. There's a nice tailwind there. It's gonna continue to drive a lot more customer conversions, certainly first half this year, well into the back half and into 2027. I can tell you with confidence that no one is better positioned to ride that. We do expect to see some significant wins here. Matt, this is Jim. Just to add to that conversion to the non-BPA, Europe you called out, really if you look at Asia and LATAM, there's still a lot of room to run in those regions as well. Thanks for the question. Your next question for today is from Chuck Cerankosky with Northcoast Research. Good morning, everyone. Can you talk a little bit what you're looking at in terms of the mortgage environment, household formations in North America for the remainder of this year? Yeah, Chuck, it's Jim. I think in terms of the mortgage rate environment for this year, you know, we're not expecting it to move a whole lot. I think Ben referenced, you know, if you dial back a year or so ago, we were putting a lot of emphasis on rates getting below that 6 number. I think that would help, but certainly it's more about affordability as well. It's sort of this triangle that we look at of rates, affordability, and incomes. We need all 3 of those to sort of work in sync, if you will. In terms of where we go from household formations, it has slowed a little bit, but it's still a pretty healthy rate in terms of household formations, and we expect that to continue. I'd also point to, as we've talked about many times, Chuck, you know, the structural deficit that's out there in terms of we've underbuilt for a long period of time. Even if household formations do slow a little bit, there's a tremendous pent-up demand that has to happen. Whether that's single family, if it doesn't come through that way, it's gonna come through in multifamily. People need a place to live, so we're well-positioned on that multifamily side as well. One piece I would add to that, Chuck, as well, because the depth of our position with a lot of these national home builders and exclusive partnerships, I do believe we'll be uniquely rewarded as this pent-up demand starts to soften because it's what we do right now in these partnerships. We said this on the supplier side, it's true with our customers. We wanna be the strategic partner that's helping them solve for simplification, helping them solve for cycle time. I think the work that we're doing now, while it's masked in the market, when things start to move, I think we'll be uniquely rewarded for that. Thanks, Chuck. Your next question for today is from Patrick Cunningham with Citi. Hi, good morning. I just wanted to unpack the lower Performance Coatings sales volume guide. Have you seen any evidence of weakness quarter to date in order books or any indication that there was perhaps some pull forward in March? Conversely, you know, we've seen some fits and starts on, you know, stable to expansionary industrial activity, particularly in the US You know, have you seen any areas of more positive underlying market growth? No, I wouldn't say, Patrick, that we're seeing any material shift there in terms of orders or timing from a standpoint. I'll hand this over to Ben to give a bit more commentary on guidance. Yeah. Patrick, I think one way to think about it is, you know, we know that there is gonna be this gap in feedstocks. You know, you've had boats that are on the water 60 to 90 days from the start of a conflict. At some point, Asia and Europe are gonna feel the squeeze a little bit more than maybe what they're seeing right now. I think what you see in our guide, you know, is a pretty realistic view that there is gonna be, you know, kind of a inflection point where getting those feedstocks are gonna be, you know, tougher. That could have, obviously, a greater inflationary impact on the business there. We feel, you know, as the big global companies, we're gonna be able to get our customers product. It may come at a higher cost. You may start seeing some people waiting, you know, for prices to come down, that could have an impact on demand. That's really what you see in our guide, you know, that has that there. I'll call out, I mean, we've, you know, we've started to look at inflation not as an uncontrollable headwind, but a variable we're actively managing. You start to see that with how we're looking at each of the different regions and that realistic view and our confidence for how we're gonna support our customers. Thanks, Patrick. Your next question for today is from Laurence Alexander with Jefferies. Hey, good morning. This is Kevin Estok on for Laurence. Just in Performance Coatings, just given to the macro uncertainty, I guess, how would you characterize customer behavior? You know, are you seeing, I guess, confidence around production schedules or sort of more short cycle ordering and hesitation to commit to, like, longer term orders? Thanks. Well, there's probably a mix if we're honest on balance. I mean, I think there'll be some prudence and people waiting to see kind of where, you know, cost of capital is. There's also a lot of confidence in the backlogs and the pipelines and, so it's really a mix across the board, Kevin. I think that it's a portfolio, importantly in that, while we would love for all segments to be up at all times across PCG, the reality is that we're gonna be very focused on where the market is and make sure that we are best positioned for that run up. We're gonna continue to do what we do. Karl J. Jorgenrud in that organization runs with a very strong sense of agility and urgency. You're seeing that play out right now. I think, you know, our strategy is clearly working. What we said we would do, we're doing it and we're doing it better than we even thought, and that's a result of that strategy. Thank you, Kevin. Your next question for today is from Garik Shmois with Loop Capital. Good morning. This is Zach Pacheco on for Garik Shmois. Thanks for taking my question. Just another quick one on customer behavior. Do you guys get the sense of any pre-buy taking place due to inflationary increases in which customers are trying to lock in supply, or is this not really something you're seeing at, in this moment? Thanks. We're not seeing that in this moment. Nothing material. We're not at all concerned on that. Thanks, Jeff. Your next question is from Mike Sison with Wells Fargo. Hey, good morning. Nice quarter. Heidi, you know, it just feels like, you know, the US architectural paint demand in the US has been structurally impaired. If this continues to the end of the decade, what, you know, how do you sort of think about strategy in this environment for even longer than we're seeing it? Just curious on your 2026 full year, your sales guides for Paint Stores Group, are we kinda tracking toward the down low single digits given, you know, how the housing market is shaping up this year? Mike, two-part question. I'll take the first part on demand and then hand it to Ben for guidance. I wouldn't use the word impaired. I would say under pressure. But you can imagine when we're sitting in our, you know, conference rooms and boardrooms, we are looking at every scenario, including softer for much, much longer. I can assure you that we do have a whole host of multiple levers that we look at, we contemplate. We don't wanna have to pull some of those, we're gonna do what we said we would do, it's control the controllable. We're gonna look at this as a jump ball environment. There are a lot of gallons available and up for grabs right now. If I even point to res repaint, Mike, you know this well, this is an area where not only do we continue to take share, but it's the area where we have the most share to gain. Even in this environment, we're gonna continue to outperform the market, and we're gonna compensate for some of that core softness. Yeah, Mike, I'll add to that. I mean, as far as, you know, our full year guidance for Paint Stores Group, it remains in line in that, you know, that low single digit. You know, you don't see, you know, as many of the variables changing as maybe you saw with, you know, some of the other segments. I think that's a barometer of confidence for us and how we're assessing the business there. As we've talked about already, we're gonna continue to make the right selling investments there. There could be different mix by the different, you know, segments that Heidi has walked through, we feel pretty confident about our continued opportunities, especially with all the share gains that we've been after in Stores Group. That's why you see the guide kind of remaining where it's at. Thanks, Mike. Your next question is from Sebastian Bray with Berenberg. Hello, good morning, and thank you for taking my question. I'm interested in two areas where Sherwin has taken market share, Refinish and the EMEA Decorative market. What is it that Sherwin has to offer in Refinish that its competitors don't? Is the aggressiveness on pricing something that has happened here? Any comments that you can give on EMEA Deco are welcome. I think Sherwin has a relatively niche position in UK and one or two other markets. Thank you. Thanks, Sebastian. On the Refinish side, I'll take you, not to make this a history lesson, but I think context is really important here. If you look at the acquisition of Valspar a few years ago, you leverage the best of both. We've combined not only our controlled distribution platform with our automotive business and everything that we have to offer with the subject matter expertise of our reps that are embedded in these customers' body shops. You layer in with Valspar, the waterborne technologies that we've been able to bring together, we really have created kind of a best of both in terms of the value proposition. Yeah, I'll take a little bit on the Europe sales. I mean, Europe benefited from a reporting mix impact this quarter. A certain immaterial resin sales we had previously, you know, reported as part of Performance Coatings Group are now fully integrated and reflected in our global supply chain, which is reported here in our Consumer Brands Group. Don't read too much into the, you know, the much stronger reported sales. If you look at the core sales of Consumer Brands Group in Europe, it grew by more of a mid-single digit percentage if I exclude that resin classification. And similar to, you know, what we've seen in Europe with the challenging environment, DIY being a more challenged part of the segment. I think you see that playing out here. Thank you, Sebastian. Your next question for today is from Eric Bosshard with Cleveland Research Company. Hi, I'm intrigued you commented the DIY store volume in stores is up 5%, it feels like the rest of retailer was down maybe 5%. Can you just talk about why, then also talk a bit more about the down 5 at the rest of retail and where that's going from here? Eric, if you look at the DIY segment and split it into, you know, the premium, the homeowner that's willing to pay a premium rather and is looking for that high-touch service generally prefers the specialty store environment. Our sales were up, it was not volume. That's obviously a mix of both volume and price. If you then look at more of that value-conscious homeowner that might prefer a specialty or a home center environment rather, that's where our strategic partnerships, you know, with Lowe's and Menards and others are so important, so that together we can cover that landscape. Really it is kind of unique if you split those out. They're different behaviors right now given some of the inflationary pressures. Thank you, Eric. Your next question is from Jeff Zekauskas with JPMorgan. Thanks very much. Is it fair to say that your architectural paint price increase happened at the very beginning of the year, but there haven't been architectural increases since then. In your industrial businesses, you have increased prices later in 2026, and I was wondering how much that might be. What those price issuances were. Secondly, in your description of raw materials, you said that 75% of your raw materials are related to propylene, and you said that propylene was up 50%. Wouldn't that mean that your raw materials are up 38%, 37%, if you ignore timing? Hey, Jeff, it's Ben. I'm gonna take this first part here. I'll let Jim answer the question about raw materials. Yep, the pricing phasing, and you're right. Yes, our architectural price that we went out with in January, you know, the intention before the conflict was that, you know, that's the price that we needed for the year. If you go back to our initial raw material guidance of up low single digits for the year, we built that, you know, that initial pricing based on that assumption that we made at that time. As you can imagine, we have a lot of architectural customers who are on contracts, or we have other, you know, points throughout the year, and we've talked about our effectiveness can get better throughout the year as you hit, you know, those certain milestones where we're able to get more pricing. Yeah, you're right. A bulk of that comes at the start of the year. Industrial historically has been all throughout the year at different times based on business needs, based on what the raw material basket is doing. I think what you've seen post Middle East conflict, we've had to go out and reassess in all parts of the business. Even though there's not an announced general increase for Paint Stores Group, as we try to manage, you know, through cost out and other simplification efforts, you know, there might be some spotty other areas where we are able to get price without doing a full launch. Similarly, with the industrial business, as you can imagine, Asia and Europe, where you've got pricing that, you know, is, has got to be 20% or higher, to cover, you know, where you have the bigger part of the inflation happening. Our teams are out by the business unit and geography, getting, you know, coverage, you know, where they need. Again, that would be bigger again on industrial in APAC, in EMEA. There are still industrial impacts that are happening in the Americas. There's pricing that is going out there on the industrial side. I think as we've talked about on a couple of the different questions and even in Heidi's opening remarks, you know, being very surgical and trying to find where we can take that price without having to be generic, because we realize right now in this inflationary environment, we don't wanna put volume at risk. You have to do that maybe to a stronger degree than you normally would see us do. Our confidence that being very thoughtful about chasing volume in this environment, that with the right program stuff, we're trading these contractors up because the ability to get them on and off of job sites faster, the ability, you know, less touch-up required. They're willing to pay a premium for that, even in an inflationary environment, because 85% of their cost is labor. We're being very thoughtful to get the volume, and it has to be the right volume to Ben's earlier point. I'm very confident in the team's ability to get these contractors into premium gallons. Jeff, on your question about propylene, I'd give you a couple of things to think about. The 50% that I mentioned is a forecast of where it could go perhaps over the rest of the year. We'll see how that plays out. As Ben mentioned here, we'll be out with price if we need to there. The other thing I would say is, as you know, we're not buying propylene, we're buying the things that are derivatives of propylene. Those do take some time to flow into our basket, and we'll be ready again. If we need to go out with additional surgical price increases, that is, we'll be prepared to do that. Thanks for the question. We have reached the end of the question and answer session, and I will now turn the call over to Jim Jaye for closing remarks. Thank you, Holly, thank you again everyone for joining our call. Special thanks to our employees for their hard work in delivering a really solid start to our year. I think Heidi said it well. Our strategy is clear, it's working, it's not changing. We're continuing to focus on providing our customers with solutions that make them more productive and profitable. You can count on us. We're gonna continue executing at a high level, focusing on winning new business and controlling what we can. I'll close with a reminder, our 2026 financial community presentation is coming up in Cleveland this year, September 24th. You'll have an opportunity to see our investments in our new global headquarters and our global technology center. Excited for all of you to experience that and see how that's moving the needle forward for us. Thanks again for your interest in Sherwin-Williams. As always, we'll be available for follow-up calls and hope you have a great day. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Speaker 21: Good morning. Thank you for joining The Sherwin-Williams Company's review of first quarter 2026 and our outlook for the second quarter and full year of 2026. With us on today's call are Heidi Petz, Chair, President, and Chief Executive Officer, Ben Meisenzahl, Chief Financial Officer, Paul Lang, Chief Accounting Officer, and Jim Jaye, Senior Vice President, Investor Relations and Communications. This conference call is being webcast simultaneously in listen-only mode by Accesswire via the Internet at www.sherwin.com. An archive replay of this webcast will be available at www.sherwin.com beginning approximately two hours after this conference call concludes. This conference call will include certain forward-looking statements as defined under US Federal Securities laws with respect to sales, earnings, and other matters. Good morning. good morning Thank you for joining The Sherwin-Williams Company's review of first quarter 2026 and our outlook for the second quarter and full year of 2026. thank you for joining the sherwin-williams company's review of first quarter 2026 and our outlook for the second quarter and full year of 2026 With us on today's call are Heidi Petz, Chair, President, and Chief Executive Officer, Ben Meisenzahl, Chief Financial Officer, Paul Lang, Chief Accounting Officer, and Jim Jaye, Senior Vice President, Investor Relations and Communications. with us on today's call are heidi petz chair president and chief executive officer ben meisenzahl chief financial officer paul lang chief accounting officer and jim jaye senior vice president investor relations and communications This conference call is being webcast simultaneously in listen-only mode by Access wire via the Internet at www.sherwin.com. this conference call is being webcast simultaneously in listen-only mode by access wire via the internet at www.sherwin.com An archive replay of this webcast will be available at www.sherwin.com beginning approximately two hours after this conference call concludes. an archive replay of this webcast will be available at www.sherwin.com beginning approximately two hours after this conference call concludes This conference call will include certain forward-looking statements as defined under US Federal Securities laws with respect to sales, earnings, and other matters. this conference call will include certain forward-looking statements as defined under us federal securities laws with respect to sales earnings and other matters Any forward-looking statement speaks only as of the date on which such statement is made, and the company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. A full declaration regarding forward-looking statements is provided in the company's earnings release transmitted earlier this morning. After the company's prepared remarks, we will open up this session to questions. I will now turn the call over to Jim Jaye. Any forward-looking statement speaks only as of the date on which such statement is made, and the company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. any forward-looking statement speaks only as of the date on which such statement is made and the company undertakes no obligation to update or revise any forward-looking statement whether as a result of new information future events or otherwise A full declaration regarding forward-looking statements is provided in the company's earnings release transmitted earlier this morning. a full declaration regarding forward-looking statements is provided in the company's earnings release transmitted earlier this morning After the company's prepared remarks, we will open up this session to questions. after the company's prepared remarks we will open up this session to questions I will now turn the call over to Jim Jaye. i will now turn the call over to jim jaye

Speaker 12: Thank you, good morning to everyone. Sherwin-Williams delivered strong sales in a quarter characterized by heightened global uncertainty and persistent demand softness in most end markets. Our growth investments and ongoing new account and share of wallet initiatives continue to yield results as sales exceeded guidance on a consolidated basis and in all three reportable segments. Consolidated sales grew by a high single-digit%, inclusive of a low single-digit contribution from the Suvinil acquisition. Reported gross margin expanded by 90 basis points, inclusive of a dilutive impact from Suvinil. This was the fourteenth quarter out of the last 15 quarters we have delivered year-over-year gross margin expansion. Thank you, good morning to everyone. thank you good morning to everyone Sherwin-Williams delivered strong sales in a quarter characterized by heightened global uncertainty and persistent demand softness in most end markets. sherwin-williams delivered strong sales in a quarter characterized by heightened global uncertainty and persistent demand softness in most end markets Our growth investments and ongoing new account and share of wallet initiatives continue to yield results as sales exceeded guidance on a consolidated basis and in all three reportable segments. our growth investments and ongoing new account and share of wallet initiatives continue to yield results as sales exceeded guidance on a consolidated basis and in all three reportable segments Consolidated sales grew by a high single-digit%, inclusive of a low single-digit contribution from the Suvinil acquisition. consolidated sales grew by a high single-digit% inclusive of a low single-digit contribution from the suvinil acquisition Reported gross margin expanded by 90 basis points, inclusive of a dilutive impact from Suvinil. reported gross margin expanded by 90 basis points inclusive of a dilutive impact from suvinil This was the fourteenth quarter out of the last 15 quarters we have delivered year-over-year gross margin expansion. this was the fourteenth quarter out of the last 15 quarters we have delivered year-over-year gross margin expansion Against a challenging prior year comparison, SG&A increased by a mid-single-digit percentage, excluding the anticipated headwinds from our non-annualized acquisition of Suvinil, non-annualized operating costs and depreciation related to our new buildings, and foreign currency translation that we anticipated to unfavorably impact our SG&A as a percent to sales by approximately 100 basis points. Our full year guidance of a low-single-digit increase in SG&A remains unchanged. Adjusted diluted net income per share in the quarter increased by a mid-single-digit percentage, and adjusted EBITDA increased by a high-single-digit percentage. Net operating cash improved by $200 million, driven by an increase in net income and working capital being a lower use of funds. Our full year guidance for adjusted diluted net income per share remains unchanged. Against a challenging prior year comparison, SG&A increased by a mid-single-digit percentage, excluding the anticipated headwinds from our non-annualized acquisition of Suvinil, non-annualized operating costs and depreciation related to our new buildings, and foreign currency translation that we anticipated to unfavorably impact our SG&A as a percent to sales by approximately 100 basis points. against a challenging prior year comparison sg&a increased by a mid-single-digit percentage excluding the anticipated headwinds from our non-annualized acquisition of suvinil non-annualized operating costs and depreciation related to our new buildings and foreign currency translation that we anticipated to unfavorably impact our sg&a as a percent to sales by approximately 100 basis points Our full year guidance of a low-single-digit increase in SG&A remains unchanged. our full year guidance of a low-single-digit increase in sg&a remains unchanged Adjusted diluted net income per share in the quarter increased by a mid-single-digit percentage, and adjusted EBITDA increased by a high-single-digit percentage. adjusted diluted net income per share in the quarter increased by a mid-single-digit percentage and adjusted ebitda increased by a high-single-digit percentage Net operating cash improved by $200 million, driven by an increase in net income and working capital being a lower use of funds. net operating cash improved by $200 million driven by an increase in net income and working capital being a lower use of funds Our full year guidance for adjusted diluted net income per share remains unchanged. our full year guidance for adjusted diluted net income per share remains unchanged We continued to execute our disciplined capital allocation strategy in the quarter by returning $773 million to shareholders through share buybacks and dividends. We ended the first quarter with a strong balance sheet and a net debt to adjusted EBITDA ratio of 2.5x. Let me now turn it over to Heidi, who will provide some color on first quarter segment performance before moving on to our outlook and your questions. We continued to execute our disciplined capital allocation strategy in the quarter by returning $773 million to shareholders through share buybacks and dividends. we continued to execute our disciplined capital allocation strategy in the quarter by returning $773 million to shareholders through share buybacks and dividends We ended the first quarter with a strong balance sheet and a net debt to adjusted EBITDA ratio of 2.5x . we ended the first quarter with a strong balance sheet and a net debt to adjusted ebitda ratio of 2.5x Let me now turn it over to Heidi, who will provide some color on first quarter segment performance before moving on to our outlook and your questions. let me now turn it over to heidi who will provide some color on first quarter segment performance before moving on to our outlook and your questions

Speaker 10: Thank you, Jim, and good morning to everyone. I want to begin by thanking our more than 64,000 employees for executing our strategy in what remains a very challenging operating environment. We are continuing to deliver reliability, consistency, and solutions for our customers at a time when these are more valuable than ever. Our differentiation continues to widen the gap between Sherwin-Williams and our competitors, as evidenced by our strong top line and robust new account growth across the business. Looking at our segment results in the first quarter, I'll begin with Paint Stores Group, which grew by a mid-single digit %. Price mix and volume both increased by low single-digit %, with price mix increasing more than volume. Effectiveness of our January first price increase is trending slightly better than expected. Thank you, Jim, and good morning to everyone. thank you jim and good morning to everyone I want to begin by thanking our more than 64,000 employees for executing our strategy in what remains a very challenging operating environment. i want to begin by thanking our more than 64,000 employees for executing our strategy in what remains a very challenging operating environment We are continuing to deliver reliability, consistency, and solutions for our customers at a time when these are more valuable than ever. we are continuing to deliver reliability consistency and solutions for our customers at a time when these are more valuable than ever Our differentiation continues to widen the gap between Sherwin-Williams and our competitors, as evidenced by our strong top line and robust new account growth across the business. our differentiation continues to widen the gap between sherwin-williams and our competitors as evidenced by our strong top line and robust new account growth across the business Looking at our segment results in the first quarter, I'll begin with Paint Stores Group, which grew by a mid-single digit %. looking at our segment results in the first quarter i'll begin with paint stores group which grew by a mid-single digit % Price mix and volume both increased by low single-digit %, with price mix increasing more than volume. price mix and volume both increased by low single-digit % with price mix increasing more than volume Effectiveness of our January first price increase is trending slightly better than expected. effectiveness of our january first price increase is trending slightly better than expected Our Protective & Marine team continued to deliver impressive growth for us as sales increased by double digits versus a high single-digit comparison. It was the seventh straight quarter of high single-digit growth in this business. In the commercial business, sales increased by mid-single digits in what remains a choppy market, reflecting our very targeted and ongoing share gain efforts. These efforts are also evident in residential repaint, which returned to mid-single digit growth in the quarter. Low single-digit growth in property maintenance was encouraging, while demand in new residential remained very challenging as we anticipated. Segment profit grew by low single digits with segment margin basically flat. We opened 21 new stores during the quarter and as planned closed 27 or about half a percent of total PSG stores. Our Protective & Marine team continued to deliver impressive growth for us as sales increased by double digits versus a high single-digit comparison. our protective & marine team continued to deliver impressive growth for us as sales increased by double digits versus a high single-digit comparison It was the seventh straight quarter of high single-digit growth in this business. it was the seventh straight quarter of high single-digit growth in this business In the commercial business, sales increased by mid-single digits in what remains a choppy market, reflecting our very targeted and ongoing share gain efforts. in the commercial business sales increased by mid-single digits in what remains a choppy market reflecting our very targeted and ongoing share gain efforts These efforts are also evident in residential repaint, which returned to mid-single digit growth in the quarter. these efforts are also evident in residential repaint which returned to mid-single digit growth in the quarter Low single-digit growth in property maintenance was encouraging, while demand in new residential remained very challenging as we anticipated. low single-digit growth in property maintenance was encouraging while demand in new residential remained very challenging as we anticipated Segment profit grew by low single digits with segment margin basically flat. segment profit grew by low single digits with segment margin basically flat We opened 21 new stores during the quarter and as planned closed 27 or about half a percent of total PSG stores. we opened 21 new stores during the quarter and as planned closed 27 or about half a percent of total psg stores As we have done for decades, we continually assess and optimize our store portfolio to drive profitability, strengthen operational flexibility, drive improvement in Return on Net Assets employed, and ensure we maintain the highest level of service for our customers. We still expect to open 80-100 new stores for the year. Consumer Brands sales exceeded our expectations, driven by high-teens growth from the Suvinil acquisition. As we have done for decades, we continually assess and optimize our store portfolio to drive profitability, strengthen operational flexibility, drive improvement in Return on Net Assets employed, and ensure we maintain the highest level of service for our customers. We still expect to open 80-100 new stores for the year. as we have done for decades we continually assess and optimize our store portfolio to drive profitability strengthen operational flexibility drive improvement in return on net assets employed and ensure we maintain the highest level of service for our customers. we still expect to open 80-100 new stores for the year Consumer Brands sales exceeded our expectations, driven by high-teens growth from the Suvinil acquisition. consumer brands sales exceeded our expectations driven by high-teens growth from the suvinil acquisition Price mix and FX both increased in the low single-digit range, and volume decreased in the mid-single-digit range. Group sales, excluding Suvinil, increased by low single digits, driven by high-teens growth in Europe and high single-digit growth in our legacy Latin America business. Softness persisted in North America, where sales decreased by low single digits. Adjusted segment margin increased, driven by the strong top line with flow-through of 34.3%. Price mix and FX both increased in the low single-digit range, and volume decreased in the mid-single-digit range. price mix and fx both increased in the low single-digit range and volume decreased in the mid-single-digit range Group sales, excluding Suvinil, increased by low single digits, driven by high-teens growth in Europe and high single-digit growth in our legacy Latin America business. group sales excluding suvinil increased by low single digits driven by high-teens growth in europe and high single-digit growth in our legacy latin america business Softness persisted in North America, where sales decreased by low single digits. softness persisted in north america where sales decreased by low single digits Adjusted segment margin increased, driven by the strong top line with flow-through of 34.3%. adjusted segment margin increased driven by the strong top line with flow-through of 34.3% In Performance Coatings Group, sales increased slightly above the mid-single-digit range we expected, with growth in every division and region. These results reflect the strong new account growth focus we have spoken about over the last year, as demand in our underlying core business is still declining in some end markets. Volume in the quarter grew by a low single digits, acquisitions were slightly positive, price mix was flat, and FX was a tailwind. In Performance Coatings Group, sales increased slightly above the mid-single-digit range we expected, with growth in every division and region. in performance coatings group sales increased slightly above the mid-single-digit range we expected with growth in every division and region These results reflect the strong new account growth focus we have spoken about over the last year, as demand in our underlying core business is still declining in some end markets. these results reflect the strong new account growth focus we have spoken about over the last year as demand in our underlying core business is still declining in some end markets Volume in the quarter grew by a low single digits, acquisitions were slightly positive, price mix was flat, and FX was a tailwind. volume in the quarter grew by a low single digits acquisitions were slightly positive price mix was flat and fx was a tailwind Automotive Refinish sales increased by a low teens percentage, driven by high single-digit volume. The growth was broad-based, with sales up by double digits in all regions, providing further evidence of the value we are delivering in this end market to win new business. Packaging continued its strong performance as sales increased by high single digits against a high single-digit comparison. General Industrial, Coil, and Wood also delivered solid growth. Automotive Refinish sales increased by a low teens percentage, driven by high single-digit volume. automotive refinish sales increased by a low teens percentage driven by high single-digit volume The growth was broad-based, with sales up by double digits in all regions, providing further evidence of the value we are delivering in this end market to win new business. the growth was broad-based with sales up by double digits in all regions providing further evidence of the value we are delivering in this end market to win new business Packaging continued its strong performance as sales increased by high single digits against a high single-digit comparison. packaging continued its strong performance as sales increased by high single digits against a high single-digit comparison General Industrial, Coil, and Wood also delivered solid growth. general industrial coil and wood also delivered solid growth Group sales expanded in all regions, including double-digit increases in Asia Pacific and Europe. Adjusted segment profit for the group increased by mid-single digits, and segment margin was flat. Higher incentive compensation related to the strong year-over-year sales, along with the significant FX headwinds, drove segment SG&A higher, resulting in muted flow-through. Group sales expanded in all regions, including double-digit increases in Asia Pacific and Europe. group sales expanded in all regions including double-digit increases in asia pacific and europe Adjusted segment profit for the group increased by mid-single digits, and segment margin was flat. adjusted segment profit for the group increased by mid-single digits and segment margin was flat Higher incentive compensation related to the strong year-over-year sales, along with the significant FX headwinds, drove segment SG&A higher, resulting in muted flow-through. higher incentive compensation related to the strong year-over-year sales along with the significant fx headwinds drove segment sg&a higher resulting in muted flow-through These same dynamics, in addition to our non-annualized new building costs, also drove SG&A higher within the administrative segment. The slide deck accompanying our press release this morning provides more detail on second quarter segment results. Moving on to our guidance. The assumptions we provided in our January call and slide deck largely remain intact. What hasn't changed is that our customer feedback, as well as the indicators we track, continue to signal little support for meaningful recovery in most end markets. These same dynamics, in addition to our non-annualized new building costs, also drove SG&A higher within the administrative segment. these same dynamics in addition to our non-annualized new building costs also drove sg&a higher within the administrative segment The slide deck accompanying our press release this morning provides more detail on second quarter segment results. the slide deck accompanying our press release this morning provides more detail on second quarter segment results Moving on to our guidance. moving on to our guidance The assumptions we provided in our January call and slide deck largely remain intact. the assumptions we provided in our january call and slide deck largely remain intact What hasn't changed is that our customer feedback, as well as the indicators we track, continue to signal little support for meaningful recovery in most end markets. what hasn't changed is that our customer feedback as well as the indicators we track continue to signal little support for meaningful recovery in most end markets What has changed is the Middle East conflict, which has added further complexity and uncertainty in navigating the macro landscape. Our team has repeatedly demonstrated its ability to manage through crises, most recently during the pandemic and the US supply chain disruption, to name just a few. I am highly confident we are well equipped to manage through this newest challenge and continue supporting our customers at the highest levels. Let me provide some perspective here. First, we expect to see some negative impacts on demand from recent events as the year progresses, though it is difficult to predict the magnitude at this time given the highly fluid nature of the situation. I will remind you that this is our fourth year in a row we have been operating with the expectation of getting no help from the market. What has changed is the Middle East conflict, which has added further complexity and uncertainty in navigating the macro landscape. what has changed is the middle east conflict which has added further complexity and uncertainty in navigating the macro landscape Our team has repeatedly demonstrated its ability to manage through crises, most recently during the pandemic and the US supply chain disruption, to name just a few. our team has repeatedly demonstrated its ability to manage through crises most recently during the pandemic and the us supply chain disruption to name just a few I am highly confident we are well equipped to manage through this newest challenge and continue supporting our customers at the highest levels. i am highly confident we are well equipped to manage through this newest challenge and continue supporting our customers at the highest levels Let me provide some perspective here. let me provide some perspective here First, we expect to see some negative impacts on demand from recent events as the year progresses, though it is difficult to predict the magnitude at this time given the highly fluid nature of the situation. first we expect to see some negative impacts on demand from recent events as the year progresses though it is difficult to predict the magnitude at this time given the highly fluid nature of the situation I will remind you that this is our fourth year in a row we have been operating with the expectation of getting no help from the market. i will remind you that this is our fourth year in a row we have been operating with the expectation of getting no help from the market We know we are operating in a share gain environment, and we will continue to be very aggressive here. We see opportunity in uncertainty. We will continue to support our existing and new customers by being the most reliable and consistent business partner in our industry. From a raw material perspective, our first objective is certainty of supply. The good news is that over 80% of our consolidated revenue is in North America. The majority of raw materials for these sales are sourced in region and remain largely insulated from supply disruptions tied to Strait of Hormuz volatility. In areas such as Asia Pacific and EMEA, where supply could become more challenged, we are managing risk closely. Our focus over many years on building strong relationships with strategic suppliers versus transactional ones is a competitive advantage and should continue to serve us well. We know we are operating in a share gain environment, and we will continue to be very aggressive here. we know we are operating in a share gain environment and we will continue to be very aggressive here We see opportunity in uncertainty. we see opportunity in uncertainty We will continue to support our existing and new customers by being the most reliable and consistent business partner in our industry. we will continue to support our existing and new customers by being the most reliable and consistent business partner in our industry From a raw material perspective, our first objective is certainty of supply. from a raw material perspective our first objective is certainty of supply The good news is that over 80% of our consolidated revenue is in North America. the good news is that over 80% of our consolidated revenue is in north america The majority of raw materials for these sales are sourced in region and remain largely insulated from supply disruptions tied to Strait of Hormuz volatility. the majority of raw materials for these sales are sourced in region and remain largely insulated from supply disruptions tied to strait of hormuz volatility In areas such as Asia Pacific and EMEA, where supply could become more challenged, we are managing risk closely. in areas such as asia pacific and emea where supply could become more challenged we are managing risk closely Our focus over many years on building strong relationships with strategic suppliers versus transactional ones is a competitive advantage and should continue to serve us well. our focus over many years on building strong relationships with strategic suppliers versus transactional ones is a competitive advantage and should continue to serve us well In terms of raw material price cost dynamics, costs for oil, natural gas, and key petrochemical feedstocks such as propylene have inflated and remain volatile. As we have previously indicated, sustained inflation in these commodities typically takes about a quarter or two before we begin seeing an impact in our P&L. Specifically, we would expect to see these inflating costs impacting us more materially as we move through the second quarter and into the second half of the year. Our industrial business is seeing inflationary pressures first, starting in APAC and EMEA, and to a smaller extent in North America. More recently, we have started to see the inflationary impacts in our North and South American architectural businesses. This leads us to increase our full-year raw material inflation outlook to the range of up low to mid-single digits. In terms of raw material price cost dynamics, costs for oil, natural gas, and key petrochemical feedstocks such as propylene have inflated and remain volatile. in terms of raw material price cost dynamics costs for oil natural gas and key petrochemical feedstocks such as propylene have inflated and remain volatile As we have previously indicated, sustained inflation in these commodities typically takes about a quarter or two before we begin seeing an impact in our P&L. as we have previously indicated sustained inflation in these commodities typically takes about a quarter or two before we begin seeing an impact in our p&l Specifically, we would expect to see these inflating costs impacting us more materially as we move through the second quarter and into the second half of the year. specifically we would expect to see these inflating costs impacting us more materially as we move through the second quarter and into the second half of the year Our industrial business is seeing inflationary pressures first, starting in APAC and EMEA, and to a smaller extent in North America. our industrial business is seeing inflationary pressures first starting in apac and emea and to a smaller extent in north america More recently, we have started to see the inflationary impacts in our North and South American architectural businesses. more recently we have started to see the inflationary impacts in our north and south american architectural businesses This leads us to increase our full-year raw material inflation outlook to the range of up low to mid-single digits. this leads us to increase our full-year raw material inflation outlook to the range of up low to mid-single digits In this environment, we continue to focus on securing incremental volume balanced with appropriate and decisive pricing and cost out actions that allow us to maintain the products, services, and supply solutions which drive productivity and profitability for our customers. In terms of pricing, we are out across the business with incremental targeted actions by customer, geography, and end market. As a result, our expectation for consolidated price mix for the year increases to the high end of our low single-digit range. We are actively working to limit these increases for our customers by accelerating meaningful and aggressive cost reduction actions. At the same time, we expect continued volatility in the raw material environment as the year progresses, and we are prepared to implement additional increases if necessary. In this environment, we continue to focus on securing incremental volume balanced with appropriate and decisive pricing and cost out actions that allow us to maintain the products, services, and supply solutions which drive productivity and profitability for our customers. in this environment we continue to focus on securing incremental volume balanced with appropriate and decisive pricing and cost out actions that allow us to maintain the products services and supply solutions which drive productivity and profitability for our customers In terms of pricing, we are out across the business with incremental targeted actions by customer, geography, and end market. in terms of pricing we are out across the business with incremental targeted actions by customer geography and end market As a result, our expectation for consolidated price mix for the year increases to the high end of our low single-digit range. We are actively working to limit these increases for our customers by accelerating meaningful and aggressive cost reduction actions. as a result our expectation for consolidated price mix for the year increases to the high end of our low single-digit range. we are actively working to limit these increases for our customers by accelerating meaningful and aggressive cost reduction actions At the same time, we expect continued volatility in the raw material environment as the year progresses, and we are prepared to implement additional increases if necessary. at the same time we expect continued volatility in the raw material environment as the year progresses and we are prepared to implement additional increases if necessary The slide deck issued with this morning's press release includes our expectations for consolidated and segment sales for the Q2 2026. Our consolidated sales and earnings guidance for the full year are unchanged, though our deck outlines some adjustments in the mix of volume, price, and FX. The deck also contains other details you may find useful for modeling purposes. Sherwin-Williams remains well-positioned to outperform the market. We are highly confident in the clarity of our strategy and importantly, our team's deep experience and ability to out-execute in this environment. The slide deck issued with this morning's press release includes our expectations for consolidated and segment sales for the Q2 2026. the slide deck issued with this morning's press release includes our expectations for consolidated and segment sales for the q2 2026 Our consolidated sales and earnings guidance for the full year are unchanged, though our deck outlines some adjustments in the mix of volume, price, and FX. our consolidated sales and earnings guidance for the full year are unchanged though our deck outlines some adjustments in the mix of volume price and fx The deck also contains other details you may find useful for modeling purposes. the deck also contains other details you may find useful for modeling purposes Sherwin-Williams remains well-positioned to outperform the market. sherwin-williams remains well-positioned to outperform the market We are highly confident in the clarity of our strategy and importantly, our team's deep experience and ability to out-execute in this environment. we are highly confident in the clarity of our strategy and importantly our team's deep experience and ability to out-execute in this environment We remain deeply focused on the success of our customers while continuously assessing and adapting to market conditions and controlling what we can. Whenever there is uncertainty and disruption, there is significant opportunity to demonstrate what makes Sherwin-Williams so unique. This concludes our prepared remarks. With that, I'd like to thank you for joining us this morning, and we'll be happy to take your questions. We remain deeply focused on the success of our customers while continuously assessing and adapting to market conditions and controlling what we can. we remain deeply focused on the success of our customers while continuously assessing and adapting to market conditions and controlling what we can Whenever there is uncertainty and disruption, there is significant opportunity to demonstrate what makes Sherwin-Williams so unique. whenever there is uncertainty and disruption there is significant opportunity to demonstrate what makes sherwin-williams so unique This concludes our prepared remarks. this concludes our prepared remarks With that, I'd like to thank you for joining us this morning, and we'll be happy to take your questions. with that i'd like to thank you for joining us this morning and we'll be happy to take your questions

Speaker 21: Certainly. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. For Participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. One moment, please, while we poll for questions. Your first question for today is from John McNulty with BMO Capital Markets. Certainly. certainly At this time, we will be conducting a question-and-answer session. at this time we will be conducting a question-and-answer session If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. For Participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. One moment, please, while we poll for questions. if you would like to ask a question, please press star one on your telephone keypad. a confirmation tone will indicate your line is in the question queue. for participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. one moment please while we poll for questions Your first question for today is from John McNulty with BMO Capital Markets. your first question for today is from john mcnulty with bmo capital markets

Speaker 13: Yeah, good morning. Thanks for taking my question. Maybe a question on the price and cost dynamic. It seems like on your pricing commentary, sounds like it's a little bit more surgical than maybe you've taken in the past and a little more, you know, customer-specific or very end market specific. I guess given the global cost pressures that we're seeing, why is it sounding maybe a little bit more surgical than usual and maybe a little bit less of a, you know, full across the board type price move? Can you help us to think about that? Yeah, good morning. yeah good morning Thanks for taking my question. thanks for taking my question Maybe a question on the price and cost dynamic. maybe a question on the price and cost dynamic It seems like on your pricing commentary, sounds like it's a little bit more surgical than maybe you've taken in the past and a little more, you know, customer-specific or very end market specific. it seems like on your pricing commentary sounds like it's a little bit more surgical than maybe you've taken in the past and a little more you know customer-specific or very end market specific I guess given the global cost pressures that we're seeing, why is it sounding maybe a little bit more surgical than usual and maybe a little bit less of a, you know, full across the board type price move? i guess given the global cost pressures that we're seeing why is it sounding maybe a little bit more surgical than usual and maybe a little bit less of a you know full across the board type price move Can you help us to think about that? can you help us to think about that

Speaker 10: John, good morning. I'll start, I'll hand this over to Ben here for some color commentary. I do want to just demonstrate this is an opportunity. We've operated through so many different types of cycles where volume is clearly key, the discipline of the team to know when and where to go with pricing is on clear display. You see it in our first quarter results. I want to take a moment before I hand this over to Ben. I said this in our prepared comments. It's the credit to our 24,000 employees globally that are operating belly to belly with customers and have that intimacy so that when we do need to take pricing, we've got high credibility that it's absolutely out of necessity. I'll hand it over to Ben to maybe give some comments on a more surgical approach. John, good morning. john good morning I'll start, I'll hand this over to Ben here for some color commentary. i'll start i'll hand this over to ben here for some color commentary I do want to just demonstrate this is an opportunity. i do want to just demonstrate this is an opportunity We've operated through so many different types of cycles where volume is clearly key, the discipline of the team to know when and where to go with pricing is on clear display. we've operated through so many different types of cycles where volume is clearly key the discipline of the team to know when and where to go with pricing is on clear display You see it in our first quarter results. you see it in our first quarter results I want to take a moment before I hand this over to Ben. i want to take a moment before i hand this over to ben I said this in our prepared comments. i said this in our prepared comments It's the credit to our 24,000 employees globally that are operating belly to belly with customers and have that intimacy so that when we do need to take pricing, we've got high credibility that it's absolutely out of necessity. it's the credit to our 24,000 employees globally that are operating belly to belly with customers and have that intimacy so that when we do need to take pricing we've got high credibility that it's absolutely out of necessity I'll hand it over to Ben to maybe give some comments on a more surgical approach. i'll hand it over to ben to maybe give some comments on a more surgical approach

Speaker 2: Hey, good morning, John. It's Ben Meisenzahl. Just to add to what Heidi said here, I think one, you know, one place to anchor is that we have more than 2x the pricing now in this new guide than what we had in the original guidance that we gave you in January. It reflects, if you think about the phasing by the regions, we obviously know that Asia-Pacific is maybe more impacted right now. That's gonna impact EMEA. North America comes later. You also have the phasing where industrial is impacted sooner than you would have architectural. That's because a lot of the solvent pricing that you would expect is you'd see first. Even the way that we buy, you know, is a variable here. Hey, good morning, John. hey good morning john It's Ben Meisenzahl. it's ben meisenzahl Just to add to what Heidi said here, I think one, you know, one place to anchor is that we have more than 2x the pricing now in this new guide than what we had in the original guidance that we gave you in January. just to add to what heidi said here i think one you know one place to anchor is that we have more than 2x the pricing now in this new guide than what we had in the original guidance that we gave you in january It reflects, if you think about the phasing by the regions, we obviously know that Asia-Pacific is maybe more impacted right now. it reflects if you think about the phasing by the regions we obviously know that asia-pacific is maybe more impacted right now That's gonna impact EMEA. that's gonna impact emea North America comes later. north america comes later You also have the phasing where industrial is impacted sooner than you would have architectural. you also have the phasing where industrial is impacted sooner than you would have architectural That's because a lot of the solvent pricing that you would expect is you'd see first. that's because a lot of the solvent pricing that you would expect is you'd see first Even the way that we buy, you know, is a variable here. even the way that we buy you know is a variable here You think about, you know, we're like 50/50 between contractual and spot buying. More of our architectural business is on a contract. You would expect on the industrial side, you're gonna see more of that spot buying where you got a more varied range of raw materials. These are all things that have gone into, you know, how we thought about the pricing here. Heidi's absolutely right. You know, we're gonna monitor and watch. We're gonna work with our customers. We're also really early in the year still. You think about, you know, we're like 50/50 between contractual and spot buying. you think about you know we're like 50/50 between contractual and spot buying More of our architectural business is on a contract. more of our architectural business is on a contract You would expect on the industrial side, you're gonna see more of that spot buying where you got a more varied range of raw materials. you would expect on the industrial side you're gonna see more of that spot buying where you got a more varied range of raw materials These are all things that have gone into, you know, how we thought about the pricing here. these are all things that have gone into you know how we thought about the pricing here Heidi's absolutely right. heidi's absolutely right You know, we're gonna monitor and watch. you know we're gonna monitor and watch We're gonna work with our customers. we're gonna work with our customers We're also really early in the year still. we're also really early in the year still We have a lot of opportunity. If our base case doesn't play out the way that we think, we're gonna have, you know, that ability to go out and get additional pricing. Lastly, I mean, we always talk about it is balancing price with the right volume. As we've looked at some of the competitive opportunities, we're not looking for all volume, you know, that is an opportunity that we want to make sure that we don't, we don't forget about here. We have a lot of opportunity. we have a lot of opportunity If our base case doesn't play out the way that we think, we're gonna have, you know, that ability to go out and get additional pricing. if our base case doesn't play out the way that we think we're gonna have you know that ability to go out and get additional pricing Lastly, I mean, we always talk about it is balancing price with the right volume. lastly i mean we always talk about it is balancing price with the right volume As we've looked at some of the competitive opportunities, we're not looking for all volume, you know, that is an opportunity that we want to make sure that we don't, we don't forget about here. as we've looked at some of the competitive opportunities we're not looking for all volume you know that is an opportunity that we want to make sure that we don't we don't forget about here

Speaker 12: Thank you, John. Thank you, John. thank you john

Speaker 21: We do ask to please limit yourself to one question. If you have any additional questions, you may reenter the queue by pressing star one. Your next question for today is from Duffy Fischer with Goldman Sachs. We do ask to please limit yourself to one question. we do ask to please limit yourself to one question If you have any additional questions, you may reenter the queue by pressing star one. if you have any additional questions you may reenter the queue by pressing star one Your next question for today is from Duffy Fischer with Goldman Sachs. your next question for today is from duffy fischer with goldman sachs

Speaker 6: Yeah, good morning, guys. Just a question on cost. If you could kinda break the basket down a little bit, where you've seen the increase and, you know, going from kinda low single digits to low to mid, what is that based off of vis-a-vis spot prices? Do you think that we've put in the peak already for a lot of, you know, the VAMs, the propylene, all that kind of stuff, and they're starting to roll over? Or do you think they'll continue to go up from there? Just some help of kinda what that increase is vis-a-vis what you think the market's gonna show us over the next several months. Yeah, good morning, guys. yeah good morning guys Just a question on cost. just a question on cost If you could kinda break the basket down a little bit, where you've seen the increase and, you know, going from kinda low single digits to low to mid, what is that based off of vis-a-vis spot prices? if you could kinda break the basket down a little bit where you've seen the increase and you know going from kinda low single digits to low to mid what is that based off of vis-a-vis spot prices Do you think that we've put in the peak already for a lot of, you know, the VAMs, the propylene, all that kind of stuff, and they're starting to roll over? do you think that we've put in the peak already for a lot of you know the vams the propylene all that kind of stuff and they're starting to roll over Or do you think they'll continue to go up from there? or do you think they'll continue to go up from there Just some help of kinda what that increase is vis-a-vis what you think the market's gonna show us over the next several months. just some help of kinda what that increase is vis-a-vis what you think the market's gonna show us over the next several months

Speaker 12: Yeah. Good morning, Duffy. It's Jim. I'd say where we're seeing the most pressure, as Ben mentioned, would be more on that industrial basket. You're seeing that in the solvents Resins, those petrochemical-based commodities. You know, propylene drives about 75% of our basket, and that pricing's up because of the Middle East, forecasted, you know, maybe up 50% more through the rest of '26, related to those disruptions. You know, the solvents are elevated as well. Epoxies, I would say as well. TiO2, for the most part, has not elevated as much yet. I think we've talked, Duffy, offline about the sulfur dynamics coming out of the Strait of Hormuz. The good news is we're not really buying sulfate TiO2. I understand it's a global market, but we're more on the chlorinated side, so, I think that's important. Yeah. yeah Good morning, Duffy. good morning duffy It's Jim. it's jim I'd say where we're seeing the most pressure, as Ben mentioned, would be more on that industrial basket. i'd say where we're seeing the most pressure as ben mentioned would be more on that industrial basket You're seeing that in the solvents Resins, those petrochemical-based commodities. you're seeing that in the solvents resins those petrochemical-based commodities You know, propylene drives about 75% of our basket, and that pricing's up because of the Middle East, forecasted, you know, maybe up 50% more through the rest of '26, related to those disruptions. you know propylene drives about 75% of our basket and that pricing's up because of the middle east forecasted you know maybe up 50% more through the rest of '26 related to those disruptions You know, the solvents are elevated as well. you know the solvents are elevated as well Epoxies, I would say as well. epoxies i would say as well TiO2, for the most part, has not elevated as much yet. tio2 for the most part has not elevated as much yet I think we've talked, Duffy, offline about the sulfur dynamics coming out of the Strait of Hormuz. i think we've talked duffy offline about the sulfur dynamics coming out of the strait of hormuz The good news is we're not really buying sulfate TiO2. the good news is we're not really buying sulfate tio2 I understand it's a global market, but we're more on the chlorinated side, so, I think that's important. i understand it's a global market but we're more on the chlorinated side so i think that's important The other thing I would say is, again, as Heidi mentioned in her remarks, you know, 80% of our sales are in North America, and the vast majority of our raws that we're buying come from that region. From a supply perspective, we feel very good. The contractual buying that Ben mentioned, the way we buy, is also helping us navigate these initial headwinds. Thanks for the question. The other thing I would say is, again, as Heidi mentioned in her remarks, you know, 80% of our sales are in North America, and the vast majority of our raws that we're buying come from that region. the other thing i would say is again as heidi mentioned in her remarks you know 80% of our sales are in north america and the vast majority of our raws that we're buying come from that region From a supply perspective, we feel very good. from a supply perspective we feel very good The contractual buying that Ben mentioned, the way we buy, is also helping us navigate these initial headwinds. the contractual buying that ben mentioned the way we buy is also helping us navigate these initial headwinds Thanks for the question. thanks for the question

Speaker 21: Your next question for today is from David Begleiter with Deutsche Bank. Your next question for today is from David Begleiter with Deutsche Bank. your next question for today is from david begleiter with deutsche bank

Speaker 5: Thank you. Good morning. Heidi, just a small thing. On your guidance for raw materials, you removed the term select commodity inflation from the prior quarter slide deck. Can you help us with what that meant and why that was removed? Thank you. Thank you. thank you Good morning. good morning Heidi, just a small thing. heidi just a small thing On your guidance for raw materials, you removed the term select commodity inflation from the prior quarter slide deck. on your guidance for raw materials you removed the term select commodity inflation from the prior quarter slide deck Can you help us with what that meant and why that was removed? can you help us with what that meant and why that was removed Thank you. thank you

Speaker 12: Yeah, I'll take that one, Dave, David. I think when we talked about it earlier in the year, we just wanted to make sure that, you know, people were indicating that tariffs were part of it, and we wanted to say, "Hey, commodities were moving a little bit as well." We just took that off now because it's very obvious that the commodities are moving upwards. I wouldn't read much into that. Thanks for the question, Dave. Yeah, I'll take that one, Dave, David. yeah i'll take that one dave david I think when we talked about it earlier in the year, we just wanted to make sure that, you know, people were indicating that tariffs were part of it, and we wanted to say, "Hey, commodities were moving a little bit as well." We just took that off now because it's very obvious that the commodities are moving upwards. i think when we talked about it earlier in the year we just wanted to make sure that you know people were indicating that tariffs were part of it and we wanted to say "hey commodities were moving a little bit as well." we just took that off now because it's very obvious that the commodities are moving upwards I wouldn't read much into that. i wouldn't read much into that Thanks for the question, Dave. thanks for the question dave

Speaker 21: Your next question is from Chris Parkinson with Wolfe Research. Your next question is from Chris Parkinson with Wolfe Research. your next question is from chris parkinson with wolfe research

Speaker 3: Great. Thank you so much. Heidi, you mentioned we've been consistently in a share gain environment over the last, you know, several years. Can you just give us a kind of a quick update, just given the current dynamics on how you're thinking about growth spend, how you're thinking about, you know, net new store openings and closures? Just any dynamics that you can help us, you know, think about not only 2026, but also the trajectory which you still see for 2027 and 2028 would be particularly helpful. Thank you so much. Great. great Thank you so much. thank you so much Heidi, you mentioned we've been consistently in a share gain environment over the last, you know, several years. heidi you mentioned we've been consistently in a share gain environment over the last you know several years Can you just give us a kind of a quick update, just given the current dynamics on how you're thinking about growth spend, how you're thinking about, you know, net new store openings and closures? can you just give us a kind of a quick update just given the current dynamics on how you're thinking about growth spend how you're thinking about you know net new store openings and closures Just any dynamics that you can help us, you know, think about not only 2026, but also the trajectory which you still see for 2027 and 2028 would be particularly helpful. just any dynamics that you can help us you know think about not only 2026 but also the trajectory which you still see for 2027 and 2028 would be particularly helpful Thank you so much. thank you so much

Speaker 10: Yeah. You bet. Good morning, Chris. You know, there's a lot of volatility, obviously, in the macro. There's also a lot of volatility in the competitive environment. I also said in the prepared remarks, that is absolutely our opportunity. You're gonna hear us talk about this jump ball environment. In this, in this economy and in this competitive landscape, we're gonna be extremely aggressive in making sure that we continue to take more than our fair share of volume. I'll point to a couple examples here, then I'll come back to the stores in your second question. If you look at our res repaint segment, we're up mid-single-digits in a flat to down market, focusing on, you know, a lot of these share gains. We see interiors are increasing, some bidding activity. Yeah. yeah You bet. you bet Good morning, Chris. good morning chris You know, there's a lot of volatility, obviously, in the macro. you know there's a lot of volatility obviously in the macro There's also a lot of volatility in the competitive environment. there's also a lot of volatility in the competitive environment I also said in the prepared remarks, that is absolutely our opportunity. i also said in the prepared remarks that is absolutely our opportunity You're gonna hear us talk about this jump ball environment. you're gonna hear us talk about this jump ball environment In this, in this economy and in this competitive landscape, we're gonna be extremely aggressive in making sure that we continue to take more than our fair share of volume. in this in this economy and in this competitive landscape we're gonna be extremely aggressive in making sure that we continue to take more than our fair share of volume I'll point to a couple examples here, then I'll come back to the stores in your second question. i'll point to a couple examples here then i'll come back to the stores in your second question If you look at our res repaint segment, we're up mid-single-digits in a flat to down market, focusing on, you know, a lot of these share gains. if you look at our res repaint segment we're up mid-single-digits in a flat to down market focusing on you know a lot of these share gains We see interiors are increasing, some bidding activity. we see interiors are increasing some bidding activity We're gonna take advantage of that. We see the exterior backlogs are very healthy. We're gonna take advantage of that. Our team has been out laser-focused, Justin Binns and the stores organization, committing to aggressive new account activity. I would tell you it's the strongest we've seen in a long time. Even though there's some slowing in the market, our teams are out chasing square footage, earning business with these contractors every single day. I'd point to our commercial segment. We're outperforming. There's soft completions, yet we're up mid-single digits, while completions are down double digits. Again, some good bidding activity out there. We see some positive signals that there's uptick with office tenant improvement, some modest uptick in multifamily starts that won't benefit us for at least 12 to 18 months. We're gonna take advantage of that. we're gonna take advantage of that We see the exterior backlogs are very healthy. we see the exterior backlogs are very healthy We're gonna take advantage of that. we're gonna take advantage of that Our team has been out laser-focused, Justin Binns and the stores organization, committing to aggressive new account activity. our team has been out laser-focused justin binns and the stores organization committing to aggressive new account activity I would tell you it's the strongest we've seen in a long time. i would tell you it's the strongest we've seen in a long time Even though there's some slowing in the market, our teams are out chasing square footage, earning business with these contractors every single day. even though there's some slowing in the market our teams are out chasing square footage earning business with these contractors every single day I'd point to our commercial segment. i'd point to our commercial segment We're outperforming. we're outperforming There's soft completions, yet we're up mid-single digits, while completions are down double digits. there's soft completions yet we're up mid-single digits while completions are down double digits Again, some good bidding activity out there. again some good bidding activity out there We see some positive signals that there's uptick with office tenant improvement, some modest uptick in multifamily starts that won't benefit us for at least 12 to 18 months. we see some positive signals that there's uptick with office tenant improvement some modest uptick in multifamily starts that won't benefit us for at least 12 to 18 months We're up year-over-year, all four quarters of 2025 and 2026 because we've been completely focused on demonstrating value with these contractors. Let me take a moment and just give you a bit more by segment. If you look at our property maintenance, we're up low single digits here in a market where turns and CapEx were both under pressure. Continue to be laser-focused on how we can add value. Even in the DIY space, we're up mid-single digits in stores, that premium DIYer is holding up a bit better than that value-conscious DIYer that prefers a home center environment. Our Protective & Marine, seventh straight quarter of being up at least high single digits. It's all share gains. We're up year-over-year, all four quarters of 2025 and 2026 because we've been completely focused on demonstrating value with these contractors. we're up year-over-year all four quarters of 2025 and 2026 because we've been completely focused on demonstrating value with these contractors Let me take a moment and just give you a bit more by segment. let me take a moment and just give you a bit more by segment If you look at our property maintenance, we're up low single digits here in a market where turns and CapEx were both under pressure. if you look at our property maintenance we're up low single digits here in a market where turns and capex were both under pressure Continue to be laser-focused on how we can add value. continue to be laser-focused on how we can add value Even in the DIY space, we're up mid-single digits in stores, that premium DIYer is holding up a bit better than that value-conscious DIYer that prefers a home center environment. even in the diy space we're up mid-single digits in stores that premium diyer is holding up a bit better than that value-conscious diyer that prefers a home center environment Our Protective & Marine, seventh straight quarter of being up at least high single digits. our protective & marine seventh straight quarter of being up at least high single digits It's all share gains. it's all share gains We're going to be relentless in being very targeted on our strategic investments, as we are obviously gonna be very focused on taking costs out on the admin side. To your point on stores, it's gonna be a continued disciplined process of looking at our portfolio. Ultimately, we're gonna be driving a focus on Return on Net Assets employed. It's incumbent upon us that as we're looking at that portfolio, as we've done for decades, we're going to make sure that we're driving profitability and, you know, strengthening our flexibility and our agility as we see migration, as we see changes in the competitive landscape. We're going to be very thoughtful in chasing that volume. We're going to be relentless in being very targeted on our strategic investments, as we are obviously gonna be very focused on taking costs out on the admin side. we're going to be relentless in being very targeted on our strategic investments as we are obviously gonna be very focused on taking costs out on the admin side To your point on stores, it's gonna be a continued disciplined process of looking at our portfolio. to your point on stores it's gonna be a continued disciplined process of looking at our portfolio Ultimately, we're gonna be driving a focus on Return on Net Assets employed. ultimately we're gonna be driving a focus on return on net assets employed It's incumbent upon us that as we're looking at that portfolio, as we've done for decades, we're going to make sure that we're driving profitability and, you know, strengthening our flexibility and our agility as we see migration, as we see changes in the competitive landscape. it's incumbent upon us that as we're looking at that portfolio as we've done for decades we're going to make sure that we're driving profitability and you know strengthening our flexibility and our agility as we see migration as we see changes in the competitive landscape We're going to be very thoughtful in chasing that volume. we're going to be very thoughtful in chasing that volume

Speaker 12: Thanks, Chris. Thanks, Chris. thanks chris

Speaker 21: Your next question is from Ghansham Panjabi with Baird. Your next question is from Ghansham Panjabi with Baird. your next question is from ghansham panjabi with baird

Speaker 8: Yeah. Thank you. Good morning. On the 2026 guidance, I think initially you had volumes up low single digits for your original expectation, and then, you know, it seems like now it's guided towards low single digits decline. Is the delta just your reflection of what you think the market will do the rest of the year, just given the, you know, sequence of events? What are the offsets as it relates to the intact earnings expectations on the plus side? Thank you. Yeah. yeah Thank you. thank you Good morning. good morning On the 2026 guidance, I think initially you had volumes up low single digits for your original expectation, and then, you know, it seems like now it's guided towards low single digits decline. on the 2026 guidance i think initially you had volumes up low single digits for your original expectation and then you know it seems like now it's guided towards low single digits decline Is the delta just your reflection of what you think the market will do the rest of the year, just given the, you know, sequence of events? is the delta just your reflection of what you think the market will do the rest of the year just given the you know sequence of events What are the offsets as it relates to the intact earnings expectations on the plus side? what are the offsets as it relates to the intact earnings expectations on the plus side Thank you. thank you

Speaker 2: Hey, Ghansham, it's Ben. On the volume piece, yes, I mean, you heard us talk about a lot of the stronger price that's coming through. We recognize that with some of the inflation that there is going to be a likely demand impact. I think what you see in our guide, it, you know, keeping it, you know, full year in that same range, it's how we get there is very, very different. We expect maybe volumes to be a little more muted. Hey, Ghansham, it's Ben. hey ghansham it's ben On the volume piece, yes, I mean, you heard us talk about a lot of the stronger price that's coming through. on the volume piece yes i mean you heard us talk about a lot of the stronger price that's coming through We recognize that with some of the inflation that there is going to be a likely demand impact. we recognize that with some of the inflation that there is going to be a likely demand impact I think what you see in our guide, it, you know, keeping it, you know, full year in that same range, it's how we get there is very, very different. i think what you see in our guide it you know keeping it you know full year in that same range it's how we get there is very very different We expect maybe volumes to be a little more muted. we expect maybe volumes to be a little more muted You think through, you know, the consumer sentiment numbers. I mean, we've seen the lowest level on record, even going back to, you know, GFC and COVID. We've seen, you know, prints that are much worse than that. Some of our guidance is baking in some of the expectation on that volume being softer there. Again, as we talked about on the prior question, price is obviously an offset to that, and that helps us get to that same kind of guide for the full year. You think through, you know, the consumer sentiment numbers. you think through you know the consumer sentiment numbers I mean, we've seen the lowest level on record, even going back to, you know, GFC and COVID. i mean we've seen the lowest level on record even going back to you know gfc and covid We've seen, you know, prints that are much worse than that. we've seen you know prints that are much worse than that Some of our guidance is baking in some of the expectation on that volume being softer there. some of our guidance is baking in some of the expectation on that volume being softer there Again, as we talked about on the prior question, price is obviously an offset to that, and that helps us get to that same kind of guide for the full year. again as we talked about on the prior question price is obviously an offset to that and that helps us get to that same kind of guide for the full year

Speaker 12: Thank you, Ghansham. Thank you, Ghansham. thank you ghansham

Speaker 21: Your next question for today is from John Roberts with Mizuho. Your next question for today is from John Roberts with Mizuho. your next question for today is from john roberts with mizuho

Speaker 14: Thank you, Claire. The current administration has turned its attention towards housing affordability. Do you see anything in the proposed actions that you think could help out the end markets materially? Thank you, Claire. thank you claire The current administration has turned its attention towards housing affordability. the current administration has turned its attention towards housing affordability Do you see anything in the proposed actions that you think could help out the end markets materially? do you see anything in the proposed actions that you think could help out the end markets materially

Speaker 2: Hey, John, it's Ben. We've been monitoring obviously a lot of what they're doing. We agree that affordability is a big part of the equation. We've talked pretty openly that we thought rates was maybe gonna be the first indicator that could drive additional unlocking, you know, demand, then affordability and consumer confidence, you know, have been maybe more at the forefront. Our opinion is that, you know, we'd like to see, you know, some more of the supply opportunities, you know, versus some more of the gimmicky demand. You know, you've seen the 50-year mortgage, you've seen, you know, the Trump homes, you've seen some of these other, you know, maybe shorter term unlocks. Hey, John, it's Ben. hey john it's ben We've been monitoring obviously a lot of what they're doing. we've been monitoring obviously a lot of what they're doing We agree that affordability is a big part of the equation. we agree that affordability is a big part of the equation We've talked pretty openly that we thought rates was maybe gonna be the first indicator that could drive additional unlocking, you know, demand, then affordability and consumer confidence, you know, have been maybe more at the forefront. we've talked pretty openly that we thought rates was maybe gonna be the first indicator that could drive additional unlocking you know demand then affordability and consumer confidence you know have been maybe more at the forefront Our opinion is that, you know, we'd like to see, you know, some more of the supply opportunities, you know, versus some more of the gimmicky demand. our opinion is that you know we'd like to see you know some more of the supply opportunities you know versus some more of the gimmicky demand You know, you've seen the 50-year mortgage, you've seen, you know, the Trump homes, you've seen some of these other, you know, maybe shorter term unlocks. you know you've seen the 50-year mortgage you've seen you know the trump homes you've seen some of these other you know maybe shorter term unlocks What we're looking for in some of these policy changes would be how do you get, you know, local governments working better with, you know, the Federal Government to open up land that makes it, you know, more cost-effective for the new home builders to lower their costs. That obviously has a trickle-down effect to the affordability piece for the consumer who's buying the home. We welcome obviously any of the unlocking of affordability, you know, type mechanisms, and we're watching that closely to see how we should be reacting and be ready to act when you do see something unlock. What we're looking for in some of these policy changes would be how do you get, you know, local governments working better with, you know, the Federal Government to open up land that makes it, you know, more cost-effective for the new home builders to lower their costs. what we're looking for in some of these policy changes would be how do you get you know local governments working better with you know the federal government to open up land that makes it you know more cost-effective for the new home builders to lower their costs That obviously has a trickle-down effect to the affordability piece for the consumer who's buying the home. that obviously has a trickle-down effect to the affordability piece for the consumer who's buying the home We welcome obviously any of the unlocking of affordability, you know, type mechanisms, and we're watching that closely to see how we should be reacting and be ready to act when you do see something unlock. we welcome obviously any of the unlocking of affordability you know type mechanisms and we're watching that closely to see how we should be reacting and be ready to act when you do see something unlock

Speaker 12: Thank you, John. Thank you, John. thank you john

Speaker 21: Your next question for today is from Vincent Andrews with Morgan Stanley. Your next question for today is from Vincent Andrews with Morgan Stanley. your next question for today is from vincent andrews with morgan stanley

Speaker 24: Thank you, and good morning. Could you talk a little bit about the margin improvement in Consumer Brands, and I guess from a couple of different lenses? One, you know, should we think about that as a base level? Typically, I believe those margins go up in the middle of the year, so will they be improving sequentially? Was there any reallocation of costs among the three segments? I recall in prior years, sometimes at the beginning of the year, you've changed the cost allocation of, you know, the paint supply from Consumer Brands in the other two segments. Thank you. Thank you, and good morning. thank you and good morning Could you talk a little bit about the margin improvement in Consumer Brands, and I guess from a couple of different lenses? could you talk a little bit about the margin improvement in consumer brands and i guess from a couple of different lenses One, you know, should we think about that as a base level? one you know should we think about that as a base level Typically, I believe those margins go up in the middle of the year, so will they be improving sequentially? typically i believe those margins go up in the middle of the year so will they be improving sequentially Was there any reallocation of costs among the three segments? was there any reallocation of costs among the three segments I recall in prior years, sometimes at the beginning of the year, you've changed the cost allocation of, you know, the paint supply from Consumer Brands in the other two segments. i recall in prior years sometimes at the beginning of the year you've changed the cost allocation of you know the paint supply from consumer brands in the other two segments Thank you. thank you

Speaker 2: Hey, Vincent, it's Ben. On the 1st part of your question, the margin improvement in consumer brands that you saw, a lot of that is coming from our global supply chain efficiencies. We've talked many quarters over about a lot of the simplification and continuous improvement culture that team has, we continue to see, you know, benefits there. If you remember the 2nd half of last year, where our production, you know, was lower than what we had called out the 1st half of the year, that team is getting lean in a lot of different ways. That's a big part of what you see in the improved margin there. You also have some opportunities where our price mix has been a little bit better. Hey, Vincent, it's Ben. hey vincent it's ben On the 1st part of your question, the margin improvement in consumer brands that you saw, a lot of that is coming from our global supply chain efficiencies. on the 1st part of your question the margin improvement in consumer brands that you saw a lot of that is coming from our global supply chain efficiencies We've talked many quarters over about a lot of the simplification and continuous improvement culture that team has, we continue to see, you know, benefits there. we've talked many quarters over about a lot of the simplification and continuous improvement culture that team has we continue to see you know benefits there If you remember the 2nd half of last year, where our production, you know, was lower than what we had called out the 1st half of the year, that team is getting lean in a lot of different ways. if you remember the 2nd half of last year where our production you know was lower than what we had called out the 1st half of the year that team is getting lean in a lot of different ways That's a big part of what you see in the improved margin there. that's a big part of what you see in the improved margin there You also have some opportunities where our price mix has been a little bit better. you also have some opportunities where our price mix has been a little bit better You think about premium gallons, improving in that segment, and maybe a little bit of price ahead of some of the things that Heidi and I have already talked about with inflation. You see that there in that part of it there. There is no reallocation. I know back in 2023, we talked about how we had that fixed cost allocation between the businesses. Nothing here. You should expect to still see low 20s margin in this segment as we've talked about. You think about premium gallons, improving in that segment, and maybe a little bit of price ahead of some of the things that Heidi and I have already talked about with inflation. you think about premium gallons improving in that segment and maybe a little bit of price ahead of some of the things that heidi and i have already talked about with inflation You see that there in that part of it there. you see that there in that part of it there There is no reallocation. there is no reallocation I know back in 2023, we talked about how we had that fixed cost allocation between the businesses. i know back in 2023 we talked about how we had that fixed cost allocation between the businesses Nothing here. nothing here You should expect to still see low 20s margin in this segment as we've talked about. you should expect to still see low 20s margin in this segment as we've talked about

Speaker 12: Thank you, Vincent. Holly? Thank you, Vincent. thank you vincent Holly? holly

Speaker 21: Your next question. Your next question. your next question

Speaker 12: Holly, are you there? Holly, are you there? holly are you there

Speaker 21: Your next question is from Mike Harrison with Seaport Research Partners. Your next question is from Mike Harrison with Seaport Research Partners. your next question is from mike harrison with seaport research partners

Speaker 19: Hi, good morning. was hoping that we could go back to pricing. It seems like maybe the realization that you're getting on that 7% increase from January 1st is a little bit better than you had initially thought. I'm curious, at this point, have all of those conversations with customers taken place and that the pricing is what it is, or are there still some conversations yet to happen? In terms of potentially needing another increase in response to what's going on in the Middle East and higher raw material costs, has the window passed to announce a price increase ahead of this year's paint season? Would you be willing to, kind of break tradition and go with a mid-season increase? If that's what's necessary or if you see competitors doing that. Thank you. Hi, good morning. was hoping that we could go back to pricing. hi good morning was hoping that we could go back to pricing It seems like maybe the realization that you're getting on that 7% increase from January 1st is a little bit better than you had initially thought. it seems like maybe the realization that you're getting on that 7% increase from january 1st is a little bit better than you had initially thought I'm curious, at this point, have all of those conversations with customers taken place and that the pricing is what it is, or are there still some conversations yet to happen? i'm curious at this point have all of those conversations with customers taken place and that the pricing is what it is or are there still some conversations yet to happen In terms of potentially needing another increase in response to what's going on in the Middle East and higher raw material costs, has the window passed to announce a price increase ahead of this year's paint season? in terms of potentially needing another increase in response to what's going on in the middle east and higher raw material costs has the window passed to announce a price increase ahead of this year's paint season Would you be willing to, kind of break tradition and go with a mid-season increase? would you be willing to kind of break tradition and go with a mid-season increase If that's what's necessary or if you see competitors doing that. if that's what's necessary or if you see competitors doing that Thank you. thank you

Speaker 10: Yeah, Mike, good morning. It's kind of a two-part question. The first part of your question relative to the January increase, yes, the realization is better than we expected. Yes, all of those conversations have happened and are out there. As it relates to has the window passed or how do we think about maybe more of this turbulent environment, we've done this in the past. In fact, I did this when I was running stores. When you're in a more volatile environment, you know, what we're not gonna do is go out with a big increase in the middle of the season and announce effective immediately. Yeah, Mike, good morning. yeah mike good morning It's kind of a two-part question. it's kind of a two-part question The first part of your question relative to the January increase, yes, the realization is better than we expected. the first part of your question relative to the january increase yes the realization is better than we expected Yes, all of those conversations have happened and are out there. yes all of those conversations have happened and are out there As it relates to has the window passed or how do we think about maybe more of this turbulent environment, we've done this in the past. as it relates to has the window passed or how do we think about maybe more of this turbulent environment we've done this in the past In fact, I did this when I was running stores. in fact i did this when i was running stores When you're in a more volatile environment, you know, what we're not gonna do is go out with a big increase in the middle of the season and announce effective immediately. when you're in a more volatile environment you know what we're not gonna do is go out with a big increase in the middle of the season and announce effective immediately What we might do, if we need to go out with price, we will go out with price, in the middle or the beginning or the end of the season. We'll do it the right way. We'll sit down with our customers. We'll make sure that they are prepared, so they're not stuck absorbing this, and we can work with them to get those into their bids. So we'll do it very methodically. Let me be very clear. If we need to go again, we will go again. What we might do, if we need to go out with price, we will go out with price, in the middle or the beginning or the end of the season. what we might do if we need to go out with price we will go out with price in the middle or the beginning or the end of the season We'll do it the right way. we'll do it the right way We'll sit down with our customers. we'll sit down with our customers We'll make sure that they are prepared, so they're not stuck absorbing this, and we can work with them to get those into their bids. we'll make sure that they are prepared so they're not stuck absorbing this and we can work with them to get those into their bids So we'll do it very methodically. so we'll do it very methodically Let me be very clear. let me be very clear If we need to go again, we will go again. if we need to go again we will go again

Speaker 12: Thank you, Mike. Thank you, Mike. thank you mike

Speaker 21: Your next question for today is from Greg Melich with Evercore ISI. Your next question for today is from Greg Melich with Evercore ISI. your next question for today is from greg melich with evercore isi

Speaker 9: Hi, thanks. I'd love to dig a little deeper on the gross margin expansion in the first quarter, I guess the 90 basis points. What would it have been without the Suvinil degradation? If you think about going forward, do you think gross margins could be up each quarter this year-over-year? Or does that volatility mean there could be some quarters where it contracts year-over-year? Thanks. Hi, thanks. hi thanks I'd love to dig a little deeper on the gross margin expansion in the first quarter, I guess the 90 basis points. i'd love to dig a little deeper on the gross margin expansion in the first quarter i guess the 90 basis points What would it have been without the Suvinil degradation? what would it have been without the suvinil degradation If you think about going forward, do you think gross margins could be up each quarter this year-over-year? if you think about going forward do you think gross margins could be up each quarter this year-over-year Or does that volatility mean there could be some quarters where it contracts year-over-year? or does that volatility mean there could be some quarters where it contracts year-over-year Thanks. thanks

Speaker 2: Hey, Greg, it's Ben. You know, we haven't been calling out, you know, the specifics with Suvinil. I could tell you know, that it's a multi-basis point, you know, level up. You know, we would have been over a 100 basis point improvement without Suvinil in the quarter. As you look forward to, you know, prior quarters, you do normally see our gross margins increase into the selling season as our sales improve and we get, you know, better cost, you know, margin dynamics. There could still be a little bit of lumpiness. We've talked about even with our, you know, midterm gross margin target, that it's not a straight line up, that it, you know, that it is a little bit lumpy. Hey, Greg, it's Ben. hey greg it's ben You know, we haven't been calling out, you know, the specifics with Suvinil. you know we haven't been calling out you know the specifics with suvinil I could tell you know, that it's a multi-basis point, you know, level up. i could tell you know that it's a multi-basis point you know level up You know, we would have been over a 100 basis point improvement without Suvinil in the quarter. you know we would have been over a 100 basis point improvement without suvinil in the quarter As you look forward to, you know, prior quarters, you do normally see our gross margins increase into the selling season as our sales improve and we get, you know, better cost, you know, margin dynamics. as you look forward to you know prior quarters you do normally see our gross margins increase into the selling season as our sales improve and we get you know better cost you know margin dynamics There could still be a little bit of lumpiness. there could still be a little bit of lumpiness We've talked about even with our, you know, midterm gross margin target, that it's not a straight line up, that it, you know, that it is a little bit lumpy. we've talked about even with our you know midterm gross margin target that it's not a straight line up that it you know that it is a little bit lumpy We would expect that, you know, we continue, you know, to get a little bit of, you know, expansion there. Obviously all the things that we're trying to manage through with the Middle East conflict and the raw materials, that plays into it as well. If, again, you look at the normal phasing quarter by quarter, you should expect, you know, us to see improved gross margins as we go into the spring and summer selling season. We would expect that, you know, we continue, you know, to get a little bit of, you know, expansion there. we would expect that you know we continue you know to get a little bit of you know expansion there Obviously all the things that we're trying to manage through with the Middle East conflict and the raw materials, that plays into it as well. obviously all the things that we're trying to manage through with the middle east conflict and the raw materials that plays into it as well If, again, you look at the normal phasing quarter by quarter, you should expect, you know, us to see improved gross margins as we go into the spring and summer selling season. if again you look at the normal phasing quarter by quarter you should expect you know us to see improved gross margins as we go into the spring and summer selling season

Speaker 12: Thanks, Greg. Thanks, Greg. thanks greg

Speaker 21: Your next question for today is from Arun Viswanathan with RBC. Your next question for today is from Arun Viswanathan with RBC. your next question for today is from arun viswanathan with rbc

Speaker 1: Great. Thanks for taking my question. I guess I was a little bit pleasantly surprised by some of the volume comments and performance in, across a couple of your businesses. Maybe in PSG, still very strong, I guess, or relatively solid, resi repaint. Do you see that continuing? In, in PCG, you know, better than expected performance out of Refinish and general industrial and coil turning around. Do you see those continuing as well? Thanks. Great. great Thanks for taking my question. thanks for taking my question I guess I was a little bit pleasantly surprised by some of the volume comments and performance in, across a couple of your businesses. i guess i was a little bit pleasantly surprised by some of the volume comments and performance in across a couple of your businesses Maybe in PSG, still very strong, I guess, or relatively solid, resi repaint. maybe in psg still very strong i guess or relatively solid resi repaint Do you see that continuing? do you see that continuing In, in PCG, you know, better than expected performance out of Refinish and general industrial and coil turning around. in in pcg you know better than expected performance out of refinish and general industrial and coil turning around Do you see those continuing as well? do you see those continuing as well Thanks. thanks

Speaker 10: The answer is absolutely, we see those continuing. Everyone, I'll point to res repaint, just a little bit more color on that. It's the actions that we've taken over the last three to four years that help Sherwin-Williams has never been better positioned. I would tell you we're better positioned now than even the turbulent last two, three, four years. The controllable mindset. Residential repaint, I won't repeat what I said earlier, but this is an area where we're bringing really important innovation forward and technologies to help job site productivity. An example, we just launched a product, a system called the Emerald Symmetry, which is our best performing interior product that we've ever produced. These have performance characteristics that are putting our contractors in a position to get on and off of job sites faster. The answer is absolutely, we see those continuing. the answer is absolutely we see those continuing Everyone, I'll point to res repaint, just a little bit more color on that. everyone i'll point to res repaint just a little bit more color on that It's the actions that we've taken over the last three to four years that help Sherwin-Williams has never been better positioned. it's the actions that we've taken over the last three to four years that help sherwin-williams has never been better positioned I would tell you we're better positioned now than even the turbulent last two, three, four years. i would tell you we're better positioned now than even the turbulent last two three four years The controllable mindset. the controllable mindset Residential repaint, I won't repeat what I said earlier, but this is an area where we're bringing really important innovation forward and technologies to help job site productivity. residential repaint i won't repeat what i said earlier but this is an area where we're bringing really important innovation forward and technologies to help job site productivity An example, we just launched a product, a system called the Emerald Symmetry, which is our best performing interior product that we've ever produced. an example we just launched a product a system called the emerald symmetry which is our best performing interior product that we've ever produced These have performance characteristics that are putting our contractors in a position to get on and off of job sites faster. these have performance characteristics that are putting our contractors in a position to get on and off of job sites faster The secondary benefit of something like this is this happens to be zero VOC and a plant-based interior coating. Helps us on a number of fronts. We're taking the time to make sure that we're setting our contractors up for success. When we do that, we get rewarded. Your point on some of the important businesses in PCG, just take a moment here. This doesn't happen by chance. We talk about success by design. You mentioned Refinish. Very strong momentum here. We're up double digits in every region. We're getting price in every region. I think that is a demonstration of a clear value proposition that customers are really understanding. There's a lot of dynamics, certainly within the industry that we watch closely. What we don't do is sit back and wait for the market to correct. The secondary benefit of something like this is this happens to be zero VOC and a plant-based interior coating. the secondary benefit of something like this is this happens to be zero voc and a plant-based interior coating Helps us on a number of fronts. helps us on a number of fronts We're taking the time to make sure that we're setting our contractors up for success. we're taking the time to make sure that we're setting our contractors up for success When we do that, we get rewarded. when we do that we get rewarded Your point on some of the important businesses in PCG, just take a moment here. your point on some of the important businesses in pcg just take a moment here This doesn't happen by chance. this doesn't happen by chance We talk about success by design. we talk about success by design You mentioned Refinish. you mentioned refinish Very strong momentum here. very strong momentum here We're up double digits in every region. we're up double digits in every region We're getting price in every region. we're getting price in every region I think that is a demonstration of a clear value proposition that customers are really understanding. i think that is a demonstration of a clear value proposition that customers are really understanding There's a lot of dynamics, certainly within the industry that we watch closely. there's a lot of dynamics certainly within the industry that we watch closely What we don't do is sit back and wait for the market to correct. what we don't do is sit back and wait for the market to correct We're out chasing new business aggressively. Our direct installs continue to grow double digits in the quarter. There's a lot of runway in terms of future share gains there. Packaging, another fantastic example. We're up high single digits. The global beverage market is up low single digits. The global food market is flat to down low single digits. It tells you that we're up high single digits. What we're doing is working. Coil, general industrial and wood all have really positive stories. The coil business, yeah, we're up mid-single digits, and that's despite a lot of softness, you know, that's tied to the North American commercial, residential construction, tariff uncertainty. The teams are out aggressively hunting. GI is another great example. General finishing, heavy equipment, they're both up double digits. We're out chasing new business aggressively. we're out chasing new business aggressively Our direct installs continue to grow double digits in the quarter. our direct installs continue to grow double digits in the quarter There's a lot of runway in terms of future share gains there. there's a lot of runway in terms of future share gains there Packaging, another fantastic example. packaging another fantastic example We're up high single digits. we're up high single digits The global beverage market is up low single digits. the global beverage market is up low single digits The global food market is flat to down low single digits. the global food market is flat to down low single digits It tells you that we're up high single digits. it tells you that we're up high single digits What we're doing is working. what we're doing is working Coil, general industrial and wood all have really positive stories. coil general industrial and wood all have really positive stories The coil business, yeah, we're up mid-single digits, and that's despite a lot of softness, you know, that's tied to the North American commercial, residential construction, tariff uncertainty. the coil business yeah we're up mid-single digits and that's despite a lot of softness you know that's tied to the north american commercial residential construction tariff uncertainty The teams are out aggressively hunting. the teams are out aggressively hunting GI is another great example. gi is another great example General finishing, heavy equipment, they're both up double digits. general finishing heavy equipment they're both up double digits We're out trying to offset core erosion and core softness there. Industrial wood being up low single digits despite, you know, the correlation to residential there. The soft residential end markets that impact, you know, wood furniture, flooring, and cabinetry. Despite that backdrop, the team's out chasing. Here's the punchline: We're building new muscle. And I do expect that we will continue to keep our foot on the gas and take share. We're out trying to offset core erosion and core softness there. we're out trying to offset core erosion and core softness there Industrial wood being up low single digits despite, you know, the correlation to residential there. industrial wood being up low single digits despite you know the correlation to residential there The soft residential end markets that impact, you know, wood furniture, flooring, and cabinetry. the soft residential end markets that impact you know wood furniture flooring and cabinetry Despite that backdrop, the team's out chasing. despite that backdrop the team's out chasing Here's the punchline: We're building new muscle. And I do expect that we will continue to keep our foot on the gas and take share. here's the punchline we're building new muscle. and i do expect that we will continue to keep our foot on the gas and take share

Speaker 12: Thanks, Arun. Thanks, Arun. thanks arun

Speaker 21: Your next question for today is from Kevin McCarthy with Vertical Research Partners. Your next question for today is from Kevin McCarthy with Vertical Research Partners. your next question for today is from kevin mccarthy with vertical research partners

Speaker 17: Yes, thank you and good morning. I had a clarification and a question. On the clarification side, Ben, I think you made a comment that the price embedded in today's guide is more than twice what you had included last quarter. I guess the clarification was, is that all to do with the January 1 increase and the realization against that? Or have you implemented incremental pricing since the onset of the war on March 1? Then just my question is on raw materials. You're ratcheting the guide up a little bit, although frankly not as much as I might have thought. I was wondering if you could just talk about the quarterly cadence of that. I think you're a majority LIFO company, so maybe you can kind of speak to the accounting flow through and, you know, the assumptions that you're making on duration of the conflict there. Thanks. Yes, thank you and good morning. yes thank you and good morning I had a clarification and a question. i had a clarification and a question On the clarification side, Ben, I think you made a comment that the price embedded in today's guide is more than twice what you had included last quarter. on the clarification side ben i think you made a comment that the price embedded in today's guide is more than twice what you had included last quarter I guess the clarification was, is that all to do with the January 1 increase and the realization against that? i guess the clarification was is that all to do with the january 1 increase and the realization against that Or have you implemented incremental pricing since the onset of the war on March 1? or have you implemented incremental pricing since the onset of the war on march 1 Then just my question is on raw materials. then just my question is on raw materials You're ratcheting the guide up a little bit, although frankly not as much as I might have thought. you're ratcheting the guide up a little bit although frankly not as much as i might have thought I was wondering if you could just talk about the quarterly cadence of that. i was wondering if you could just talk about the quarterly cadence of that I think you're a majority LIFO company, so maybe you can kind of speak to the accounting flow through and, you know, the assumptions that you're making on duration of the conflict there. i think you're a majority lifo company so maybe you can kind of speak to the accounting flow through and you know the assumptions that you're making on duration of the conflict there Thanks. thanks

Speaker 2: Hey, Kevin. Yeah. To clarify on my price comment from earlier, that is on the consolidated pricing. That would've been everything that we did in January with stores, that would be everything new that we've done since then. You see in our guide that we took up our pricing and Performance Coatings Group, and it goes back to the comment we made, industrial with all the more solvent-borne type raw materials with the international locations, that's where we're seeing it first. That kind of phases into your second question of, you know, how do you see, you know, the raw materials flowing through? Hey, Kevin. hey kevin Yeah. yeah To clarify on my price comment from earlier, that is on the consolidated pricing. to clarify on my price comment from earlier that is on the consolidated pricing That would've been everything that we did in January with stores, that would be everything new that we've done since then. that would've been everything that we did in january with stores that would be everything new that we've done since then You see in our guide that we took up our pricing and Performance Coatings Group, and it goes back to the comment we made, industrial with all the more solvent-borne type raw materials with the international locations, that's where we're seeing it first. you see in our guide that we took up our pricing and performance coatings group and it goes back to the comment we made industrial with all the more solvent-borne type raw materials with the international locations that's where we're seeing it first That kind of phases into your second question of, you know, how do you see, you know, the raw materials flowing through? that kind of phases into your second question of you know how do you see you know the raw materials flowing through Our updated guide, you know, to low to mid on a full year, you have to expect that, you know, we're, you know, the first half of this year, even as we have some of the deferrals, you don't see it as much in the first half. You're gonna see it heavier in the second half, and as you exit the year, you know, you're gonna be at the higher end of that, you know, upload to mid-single digits. We're managing that, you know, closely. As I mentioned earlier, you know, we have enough price with what we see right now for what that inflation is. If the baseline changes, as Heidi mentioned, we're willing to go out and work with our customers to implement new pricing. There's plenty of time, you know, in the year to do that. That's, you know, how we're gonna manage that. Our updated guide, you know, to low to mid on a full year, you have to expect that, you know, we're, you know, the first half of this year, even as we have some of the deferrals, you don't see it as much in the first half. our updated guide you know to low to mid on a full year you have to expect that you know we're you know the first half of this year even as we have some of the deferrals you don't see it as much in the first half You're gonna see it heavier in the second half, and as you exit the year, you know, you're gonna be at the higher end of that, you know, upload to mid-single digits. you're gonna see it heavier in the second half and as you exit the year you know you're gonna be at the higher end of that you know upload to mid-single digits We're managing that, you know, closely. we're managing that you know closely As I mentioned earlier, you know, we have enough price with what we see right now for what that inflation is. as i mentioned earlier you know we have enough price with what we see right now for what that inflation is If the baseline changes, as Heidi mentioned, we're willing to go out and work with our customers to implement new pricing. if the baseline changes as heidi mentioned we're willing to go out and work with our customers to implement new pricing There's plenty of time, you know, in the year to do that. there's plenty of time you know in the year to do that That's, you know, how we're gonna manage that. that's you know how we're gonna manage that

Speaker 12: Thanks, Kevin. Thanks, Kevin. thanks kevin

Speaker 21: Your next question is from Josh Spector with UBS. Your next question is from Josh Spector with UBS. your next question is from josh spector with ubs

Speaker 15: Yeah. Heidi, good morning. I'll go down a similar line of questioning as Kevin. I mean, it's surprising to hear that at the exit rate you're talking about the high end of low to mid-single digits on raws. I mean, we have math out there that says you could see raws up 20% in that range, and that seems more consistent with some of the competitor price increases that are out there. Yeah. yeah Heidi, good morning. heidi good morning I'll go down a similar line of questioning as Kevin. i'll go down a similar line of questioning as kevin I mean, it's surprising to hear that at the exit rate you're talking about the high end of low to mid-single digits on raws. i mean it's surprising to hear that at the exit rate you're talking about the high end of low to mid-single digits on raws I mean, we have math out there that says you could see raws up 20% in that range, and that seems more consistent with some of the competitor price increases that are out there. i mean we have math out there that says you could see raws up 20% in that range and that seems more consistent with some of the competitor price increases that are out there I don't know if due to your North America exposure, you'd say that inflation is substantially less, or if how you're buying those raw materials and maybe some of the contracts either give you more protection for this year, so this is more of an early 2027 inflationary event that you would see, or if there's something that gives you more permanent kind of protection against some of that. Can you talk about that a little bit and help us understand maybe what's going on that's different for you guys versus some of your competitors? I don't know if due to your North America exposure, you'd say that inflation is substantially less, or if how you're buying those raw materials and maybe some of the contracts either give you more protection for this year, so this is more of an early 2027 inflationary event that you would see, or if there's something that gives you more permanent kind of protection against some of that. i don't know if due to your north america exposure you'd say that inflation is substantially less or if how you're buying those raw materials and maybe some of the contracts either give you more protection for this year so this is more of an early 2027 inflationary event that you would see or if there's something that gives you more permanent kind of protection against some of that Can you talk about that a little bit and help us understand maybe what's going on that's different for you guys versus some of your competitors? can you talk about that a little bit and help us understand maybe what's going on that's different for you guys versus some of your competitors

Speaker 2: Josh Spector, it's Ben Meisenzahl. I can't comment on how our competitors buy, but I can tell you know. Heidi Petz called out our, you know, strategic relationship with key suppliers. Our, you know, our procurement is maybe tighter than some of the others. We're using that as a strategic advantage so that we're not having to maybe pass as much price to our customers as some of our competitors might have to do right now that aren't advantaged because of the way that their contracts are set up. Josh Spector, it's Ben Meisenzahl. josh spector it's ben meisenzahl I can't comment on how our competitors buy, but I can tell you know. i can't comment on how our competitors buy but i can tell you know Heidi Petz called out our, you know, strategic relationship with key suppliers. heidi petz called out our you know strategic relationship with key suppliers Our, you know, our procurement is maybe tighter than some of the others. our you know our procurement is maybe tighter than some of the others We're using that as a strategic advantage so that we're not having to maybe pass as much price to our customers as some of our competitors might have to do right now that aren't advantaged because of the way that their contracts are set up. we're using that as a strategic advantage so that we're not having to maybe pass as much price to our customers as some of our competitors might have to do right now that aren't advantaged because of the way that their contracts are set up We do have a number of spot buying. We aren't seeing, you know, the exit rates and that, you know, 20% range that you're seeing. Again, I think you alluded to the mix of our business, the architectural and the industrial. That probably has some impact on that. Then again, I'll point back to, you know, 50% of our business on contracts. That's an advantage, you know, for us right now. We do have a number of spot buying. we do have a number of spot buying We aren't seeing, you know, the exit rates and that, you know, 20% range that you're seeing. we aren't seeing you know the exit rates and that you know 20% range that you're seeing Again, I think you alluded to the mix of our business, the architectural and the industrial. again i think you alluded to the mix of our business the architectural and the industrial That probably has some impact on that. that probably has some impact on that Then again, I'll point back to, you know, 50% of our business on contracts. then again i'll point back to you know 50% of our business on contracts That's an advantage, you know, for us right now. that's an advantage you know for us right now

Speaker 12: Thanks, Josh. Thanks, Josh. thanks josh

Speaker 21: Your next question is from Matthew DeYoe with Bank of America. Your next question is from Matthew DeYoe with Bank of America. your next question is from matthew deyoe with bank of america

Speaker 18: Good morning, everyone. Heidi, you talked a bunch about the packaging, and it's been brought up a few times, and clearly the numbers are really good. As we move into next year and we lap some of these regulatory shifts, like, how much of what you're accomplishing now is because of that catalyst? Do you expect you can continue to outgrow the industry like this much, or would you expect growth to shift closer to, you know, that low single digit level that the industry is kind of growing at? Good morning, everyone. good morning everyone Heidi, you talked a bunch about the packaging, and it's been brought up a few times, and clearly the numbers are really good. heidi you talked a bunch about the packaging and it's been brought up a few times and clearly the numbers are really good As we move into next year and we lap some of these regulatory shifts, like, how much of what you're accomplishing now is because of that catalyst? as we move into next year and we lap some of these regulatory shifts like how much of what you're accomplishing now is because of that catalyst Do you expect you can continue to outgrow the industry like this much, or would you expect growth to shift closer to, you know, that low single digit level that the industry is kind of growing at? do you expect you can continue to outgrow the industry like this much or would you expect growth to shift closer to you know that low single digit level that the industry is kind of growing at

Speaker 10: It's an interesting question because I think based on our preferred technology and our position, to be ready for a lot of what's coming, you know, I'm sure with EFSA, the European Food Safety Authority's ban on BPA is scheduled to take effect in Q2 of this year. That we're at the very front edge of that. There's a nice tailwind there. It's gonna continue to drive a lot more customer conversions, certainly first half this year, well into the back half and into 2027. I can tell you with confidence that no one is better positioned to ride that. We do expect to see some significant wins here. It's an interesting question because I think based on our preferred technology and our position, to be ready for a lot of what's coming, you know, I'm sure with EFSA, the European Food Safety Authority's ban on BPA is scheduled to take effect in Q2 of this year. it's an interesting question because i think based on our preferred technology and our position to be ready for a lot of what's coming you know i'm sure with efsa the european food safety authority's ban on bpa is scheduled to take effect in q2 of this year That we're at the very front edge of that. that we're at the very front edge of that There's a nice tailwind there. there's a nice tailwind there It's gonna continue to drive a lot more customer conversions, certainly first half this year, well into the back half and into 2027. it's gonna continue to drive a lot more customer conversions certainly first half this year well into the back half and into 2027 I can tell you with confidence that no one is better positioned to ride that. i can tell you with confidence that no one is better positioned to ride that We do expect to see some significant wins here. we do expect to see some significant wins here

Speaker 12: Matt, this is Jim. Just to add to that conversion to the non-BPA, Europe you called out, really if you look at Asia and LATAM, there's still a lot of room to run in those regions as well. Thanks for the question. Matt, this is Jim. matt this is jim Just to add to that conversion to the non-BPA, Europe you called out, really if you look at Asia and LATAM, there's still a lot of room to run in those regions as well. just to add to that conversion to the non-bpa europe you called out really if you look at asia and latam there's still a lot of room to run in those regions as well Thanks for the question. thanks for the question

Speaker 21: Your next question for today is from Chuck Cerankosky with Northcoast Research. Your next question for today is from Chuck Cerankosky with Northcoast Research. your next question for today is from chuck cerankosky with northcoast research

Speaker 4: Good morning, everyone. Can you talk a little bit what you're looking at in terms of the mortgage environment, household formations in North America for the remainder of this year? Good morning, everyone. good morning everyone Can you talk a little bit what you're looking at in terms of the mortgage environment, household formations in North America for the remainder of this year? can you talk a little bit what you're looking at in terms of the mortgage environment household formations in north america for the remainder of this year

Speaker 12: Yeah, Chuck, it's Jim. I think in terms of the mortgage rate environment for this year, you know, we're not expecting it to move a whole lot. I think Ben referenced, you know, if you dial back a year or so ago, we were putting a lot of emphasis on rates getting below that 6 number. I think that would help, but certainly it's more about affordability as well. It's sort of this triangle that we look at of rates, affordability, and incomes. We need all 3 of those to sort of work in sync, if you will. In terms of where we go from household formations, it has slowed a little bit, but it's still a pretty healthy rate in terms of household formations, and we expect that to continue. Yeah, Chuck, it's Jim. yeah chuck it's jim I think in terms of the mortgage rate environment for this year, you know, we're not expecting it to move a whole lot. i think in terms of the mortgage rate environment for this year you know we're not expecting it to move a whole lot I think Ben referenced, you know, if you dial back a year or so ago, we were putting a lot of emphasis on rates getting below that 6 number. i think ben referenced you know if you dial back a year or so ago we were putting a lot of emphasis on rates getting below that 6 number I think that would help, but certainly it's more about affordability as well. i think that would help but certainly it's more about affordability as well It's sort of this triangle that we look at of rates, affordability, and incomes. it's sort of this triangle that we look at of rates affordability and incomes We need all 3 of those to sort of work in sync, if you will. we need all 3 of those to sort of work in sync if you will In terms of where we go from household formations, it has slowed a little bit, but it's still a pretty healthy rate in terms of household formations, and we expect that to continue. in terms of where we go from household formations it has slowed a little bit but it's still a pretty healthy rate in terms of household formations and we expect that to continue I'd also point to, as we've talked about many times, Chuck, you know, the structural deficit that's out there in terms of we've underbuilt for a long period of time. Even if household formations do slow a little bit, there's a tremendous pent-up demand that has to happen. Whether that's single family, if it doesn't come through that way, it's gonna come through in multifamily. People need a place to live, so we're well-positioned on that multifamily side as well. I'd also point to, as we've talked about many times, Chuck, you know, the structural deficit that's out there in terms of we've underbuilt for a long period of time. i'd also point to as we've talked about many times chuck you know the structural deficit that's out there in terms of we've underbuilt for a long period of time Even if household formations do slow a little bit, there's a tremendous pent-up demand that has to happen. even if household formations do slow a little bit there's a tremendous pent-up demand that has to happen Whether that's single family, if it doesn't come through that way, it's gonna come through in multifamily. whether that's single family if it doesn't come through that way it's gonna come through in multifamily People need a place to live, so we're well-positioned on that multifamily side as well. people need a place to live so we're well-positioned on that multifamily side as well

Speaker 10: One piece I would add to that, Chuck, as well, because the depth of our position with a lot of these national home builders and exclusive partnerships, I do believe we'll be uniquely rewarded as this pent-up demand starts to soften because it's what we do right now in these partnerships. We said this on the supplier side, it's true with our customers. We wanna be the strategic partner that's helping them solve for simplification, helping them solve for cycle time. I think the work that we're doing now, while it's masked in the market, when things start to move, I think we'll be uniquely rewarded for that. One piece I would add to that, Chuck, as well, because the depth of our position with a lot of these national home builders and exclusive partnerships, I do believe we'll be uniquely rewarded as this pent-up demand starts to soften because it's what we do right now in these partnerships. one piece i would add to that chuck as well because the depth of our position with a lot of these national home builders and exclusive partnerships i do believe we'll be uniquely rewarded as this pent-up demand starts to soften because it's what we do right now in these partnerships We said this on the supplier side, it's true with our customers. we said this on the supplier side it's true with our customers We wanna be the strategic partner that's helping them solve for simplification, helping them solve for cycle time. we wanna be the strategic partner that's helping them solve for simplification helping them solve for cycle time I think the work that we're doing now, while it's masked in the market, when things start to move, I think we'll be uniquely rewarded for that. i think the work that we're doing now while it's masked in the market when things start to move i think we'll be uniquely rewarded for that

Speaker 12: Thanks, Chuck. Thanks, Chuck. thanks chuck

Speaker 21: Your next question for today is from Patrick Cunningham with Citi. Your next question for today is from Patrick Cunningham with Citi. your next question for today is from patrick cunningham with citi

Speaker 22: Hi, good morning. I just wanted to unpack the lower Performance Coatings sales volume guide. Have you seen any evidence of weakness quarter to date in order books or any indication that there was perhaps some pull forward in March? Conversely, you know, we've seen some fits and starts on, you know, stable to expansionary industrial activity, particularly in the US You know, have you seen any areas of more positive underlying market growth? Hi, good morning. hi good morning I just wanted to unpack the lower Performance Coatings sales volume guide. i just wanted to unpack the lower performance coatings sales volume guide Have you seen any evidence of weakness quarter to date in order books or any indication that there was perhaps some pull forward in March? have you seen any evidence of weakness quarter to date in order books or any indication that there was perhaps some pull forward in march Conversely, you know, we've seen some fits and starts on, you know, stable to expansionary industrial activity, particularly in the US You know, have you seen any areas of more positive underlying market growth? conversely you know we've seen some fits and starts on you know stable to expansionary industrial activity particularly in the us you know have you seen any areas of more positive underlying market growth

Speaker 10: No, I wouldn't say, Patrick, that we're seeing any material shift there in terms of orders or timing from a standpoint. I'll hand this over to Ben to give a bit more commentary on guidance. No, I wouldn't say, Patrick, that we're seeing any material shift there in terms of orders or timing from a standpoint. no i wouldn't say patrick that we're seeing any material shift there in terms of orders or timing from a standpoint I'll hand this over to Ben to give a bit more commentary on guidance. i'll hand this over to ben to give a bit more commentary on guidance

Speaker 2: Yeah. Patrick, I think one way to think about it is, you know, we know that there is gonna be this gap in feedstocks. You know, you've had boats that are on the water 60 to 90 days from the start of a conflict. At some point, Asia and Europe are gonna feel the squeeze a little bit more than maybe what they're seeing right now. I think what you see in our guide, you know, is a pretty realistic view that there is gonna be, you know, kind of a inflection point where getting those feedstocks are gonna be, you know, tougher. That could have, obviously, a greater inflationary impact on the business there. Yeah. yeah Patrick, I think one way to think about it is, you know, we know that there is gonna be this gap in feedstocks. patrick i think one way to think about it is you know we know that there is gonna be this gap in feedstocks You know, you've had boats that are on the water 60 to 90 days from the start of a conflict. you know you've had boats that are on the water 60 to 90 days from the start of a conflict At some point, Asia and Europe are gonna feel the squeeze a little bit more than maybe what they're seeing right now. at some point asia and europe are gonna feel the squeeze a little bit more than maybe what they're seeing right now I think what you see in our guide, you know, is a pretty realistic view that there is gonna be, you know, kind of a inflection point where getting those feedstocks are gonna be, you know, tougher. i think what you see in our guide you know is a pretty realistic view that there is gonna be you know kind of a inflection point where getting those feedstocks are gonna be you know tougher That could have, obviously, a greater inflationary impact on the business there. that could have obviously a greater inflationary impact on the business there We feel, you know, as the big global companies, we're gonna be able to get our customers product. It may come at a higher cost. You may start seeing some people waiting, you know, for prices to come down, that could have an impact on demand. That's really what you see in our guide, you know, that has that there. I'll call out, I mean, we've, you know, we've started to look at inflation not as an uncontrollable headwind, but a variable we're actively managing. You start to see that with how we're looking at each of the different regions and that realistic view and our confidence for how we're gonna support our customers. We feel, you know, as the big global companies, we're gonna be able to get our customers product. we feel you know as the big global companies we're gonna be able to get our customers product It may come at a higher cost. it may come at a higher cost You may start seeing some people waiting, you know, for prices to come down, that could have an impact on demand. you may start seeing some people waiting you know for prices to come down that could have an impact on demand That's really what you see in our guide, you know, that has that there. that's really what you see in our guide you know that has that there I'll call out, I mean, we've, you know, we've started to look at inflation not as an uncontrollable headwind, but a variable we're actively managing. i'll call out i mean we've you know we've started to look at inflation not as an uncontrollable headwind but a variable we're actively managing You start to see that with how we're looking at each of the different regions and that realistic view and our confidence for how we're gonna support our customers. you start to see that with how we're looking at each of the different regions and that realistic view and our confidence for how we're gonna support our customers

Speaker 12: Thanks, Patrick. Thanks, Patrick. thanks patrick

Speaker 21: Your next question for today is from Laurence Alexander with Jefferies. Your next question for today is from Laurence Alexander with Jefferies. your next question for today is from laurence alexander with jefferies

Speaker 16: Hey, good morning. This is Kevin Estok on for Laurence. Just in Performance Coatings, just given to the macro uncertainty, I guess, how would you characterize customer behavior? You know, are you seeing, I guess, confidence around production schedules or sort of more short cycle ordering and hesitation to commit to, like, longer term orders? Thanks. Hey, good morning. hey good morning This is Kevin Estok on for Laurence. this is kevin estok on for laurence Just in Performance Coatings, just given to the macro uncertainty, I guess, how would you characterize customer behavior? just in performance coatings just given to the macro uncertainty i guess how would you characterize customer behavior You know, are you seeing, I guess, confidence around production schedules or sort of more short cycle ordering and hesitation to commit to, like, longer term orders? you know are you seeing i guess confidence around production schedules or sort of more short cycle ordering and hesitation to commit to like longer term orders Thanks. thanks

Speaker 10: Well, there's probably a mix if we're honest on balance. I mean, I think there'll be some prudence and people waiting to see kind of where, you know, cost of capital is. There's also a lot of confidence in the backlogs and the pipelines and, so it's really a mix across the board, Kevin. I think that it's a portfolio, importantly in that, while we would love for all segments to be up at all times across PCG, the reality is that we're gonna be very focused on where the market is and make sure that we are best positioned for that run up. Well, there's probably a mix if we're honest on balance. well there's probably a mix if we're honest on balance I mean, I think there'll be some prudence and people waiting to see kind of where, you know, cost of capital is. i mean i think there'll be some prudence and people waiting to see kind of where you know cost of capital is There's also a lot of confidence in the backlogs and the pipelines and, so it's really a mix across the board, Kevin. there's also a lot of confidence in the backlogs and the pipelines and so it's really a mix across the board kevin I think that it's a portfolio, importantly in that, while we would love for all segments to be up at all times across PCG, the reality is that we're gonna be very focused on where the market is and make sure that we are best positioned for that run up. i think that it's a portfolio importantly in that while we would love for all segments to be up at all times across pcg the reality is that we're gonna be very focused on where the market is and make sure that we are best positioned for that run up We're gonna continue to do what we do. Karl J. Jorgenrud in that organization runs with a very strong sense of agility and urgency. You're seeing that play out right now. I think, you know, our strategy is clearly working. What we said we would do, we're doing it and we're doing it better than we even thought, and that's a result of that strategy. We're gonna continue to do what we do. we're gonna continue to do what we do Karl J. karl j Jorgenrud in that organization runs with a very strong sense of agility and urgency. jorgenrud in that organization runs with a very strong sense of agility and urgency You're seeing that play out right now. you're seeing that play out right now I think, you know, our strategy is clearly working. i think you know our strategy is clearly working What we said we would do, we're doing it and we're doing it better than we even thought, and that's a result of that strategy. what we said we would do we're doing it and we're doing it better than we even thought and that's a result of that strategy

Speaker 12: Thank you, Kevin. Thank you, Kevin. thank you kevin

Speaker 21: Your next question for today is from Garik Shmois with Loop Capital. Your next question for today is from Garik Shmois with Loop Capital. your next question for today is from garik shmois with loop capital

Speaker 25: Good morning. This is Zach Pacheco on for Garik Shmois. Thanks for taking my question. Just another quick one on customer behavior. Do you guys get the sense of any pre-buy taking place due to inflationary increases in which customers are trying to lock in supply, or is this not really something you're seeing at, in this moment? Thanks. Good morning. good morning This is Zach Pacheco on for Garik Shmois. this is zach pacheco on for garik shmois Thanks for taking my question. thanks for taking my question Just another quick one on customer behavior. just another quick one on customer behavior Do you guys get the sense of any pre-buy taking place due to inflationary increases in which customers are trying to lock in supply, or is this not really something you're seeing at, in this moment? do you guys get the sense of any pre-buy taking place due to inflationary increases in which customers are trying to lock in supply or is this not really something you're seeing at in this moment Thanks. thanks

Speaker 10: We're not seeing that in this moment. Nothing material. We're not at all concerned on that. We're not seeing that in this moment. we're not seeing that in this moment Nothing material. nothing material We're not at all concerned on that. we're not at all concerned on that

Speaker 12: Thanks, Jeff. Thanks, Jeff. thanks jeff

Speaker 21: Your next question is from Mike Sison with Wells Fargo. Your next question is from Mike Sison with Wells Fargo. your next question is from mike sison with wells fargo

Speaker 20: Hey, good morning. Nice quarter. Heidi, you know, it just feels like, you know, the US architectural paint demand in the US has been structurally impaired. If this continues to the end of the decade, what, you know, how do you sort of think about strategy in this environment for even longer than we're seeing it? Just curious on your 2026 full year, your sales guides for Paint Stores Group, are we kinda tracking toward the down low single digits given, you know, how the housing market is shaping up this year? Hey, good morning. hey good morning Nice quarter. nice quarter Heidi, you know, it just feels like, you know, the US architectural paint demand in the US has been structurally impaired. heidi you know it just feels like you know the us architectural paint demand in the us has been structurally impaired If this continues to the end of the decade, what, you know, how do you sort of think about strategy in this environment for even longer than we're seeing it? if this continues to the end of the decade what you know how do you sort of think about strategy in this environment for even longer than we're seeing it Just curious on your 2026 full year, your sales guides for Paint Stores Group, are we kinda tracking toward the down low single digits given, you know, how the housing market is shaping up this year? just curious on your 2026 full year your sales guides for paint stores group are we kinda tracking toward the down low single digits given you know how the housing market is shaping up this year

Speaker 10: Mike, two-part question. I'll take the first part on demand and then hand it to Ben for guidance. I wouldn't use the word impaired. I would say under pressure. But you can imagine when we're sitting in our, you know, conference rooms and boardrooms, we are looking at every scenario, including softer for much, much longer. I can assure you that we do have a whole host of multiple levers that we look at, we contemplate. Mike, two-part question. mike two-part question I'll take the first part on demand and then hand it to Ben for guidance. i'll take the first part on demand and then hand it to ben for guidance I wouldn't use the word impaired. i wouldn't use the word impaired I would say under pressure. i would say under pressure But you can imagine when we're sitting in our, you know, conference rooms and boardrooms, we are looking at every scenario, including softer for much, much longer. but you can imagine when we're sitting in our you know conference rooms and boardrooms we are looking at every scenario including softer for much much longer I can assure you that we do have a whole host of multiple levers that we look at, we contemplate. i can assure you that we do have a whole host of multiple levers that we look at we contemplate We don't wanna have to pull some of those, we're gonna do what we said we would do, it's control the controllable. We're gonna look at this as a jump ball environment. There are a lot of gallons available and up for grabs right now. If I even point to res repaint, Mike, you know this well, this is an area where not only do we continue to take share, but it's the area where we have the most share to gain. Even in this environment, we're gonna continue to outperform the market, and we're gonna compensate for some of that core softness. We don't wanna have to pull some of those, we're gonna do what we said we would do, it's control the controllable. we don't wanna have to pull some of those we're gonna do what we said we would do it's control the controllable We're gonna look at this as a jump ball environment. we're gonna look at this as a jump ball environment There are a lot of gallons available and up for grabs right now. there are a lot of gallons available and up for grabs right now If I even point to res repaint, Mike, you know this well, this is an area where not only do we continue to take share, but it's the area where we have the most share to gain. if i even point to res repaint mike you know this well this is an area where not only do we continue to take share but it's the area where we have the most share to gain Even in this environment, we're gonna continue to outperform the market, and we're gonna compensate for some of that core softness. even in this environment we're gonna continue to outperform the market and we're gonna compensate for some of that core softness

Speaker 2: Yeah, Mike, I'll add to that. I mean, as far as, you know, our full year guidance for Paint Stores Group, it remains in line in that, you know, that low single digit. You know, you don't see, you know, as many of the variables changing as maybe you saw with, you know, some of the other segments. I think that's a barometer of confidence for us and how we're assessing the business there. As we've talked about already, we're gonna continue to make the right selling investments there. There could be different mix by the different, you know, segments that Heidi has walked through, we feel pretty confident about our continued opportunities, especially with all the share gains that we've been after in Stores Group. That's why you see the guide kind of remaining where it's at. Yeah, Mike, I'll add to that. yeah mike i'll add to that I mean, as far as, you know, our full year guidance for Paint Stores Group, it remains in line in that, you know, that low single digit. i mean as far as you know our full year guidance for paint stores group it remains in line in that you know that low single digit You know, you don't see, you know, as many of the variables changing as maybe you saw with, you know, some of the other segments. you know you don't see you know as many of the variables changing as maybe you saw with you know some of the other segments I think that's a barometer of confidence for us and how we're assessing the business there. i think that's a barometer of confidence for us and how we're assessing the business there As we've talked about already, we're gonna continue to make the right selling investments there. as we've talked about already we're gonna continue to make the right selling investments there There could be different mix by the different, you know, segments that Heidi has walked through, we feel pretty confident about our continued opportunities, especially with all the share gains that we've been after in Stores Group. there could be different mix by the different you know segments that heidi has walked through we feel pretty confident about our continued opportunities especially with all the share gains that we've been after in stores group That's why you see the guide kind of remaining where it's at. that's why you see the guide kind of remaining where it's at

Speaker 12: Thanks, Mike. Thanks, Mike. thanks mike

Speaker 21: Your next question is from Sebastian Bray with Berenberg. Your next question is from Sebastian Bray with Berenberg. your next question is from sebastian bray with berenberg

Speaker 23: Hello, good morning, and thank you for taking my question. I'm interested in two areas where Sherwin has taken market share, Refinish and the EMEA Decorative market. What is it that Sherwin has to offer in Refinish that its competitors don't? Is the aggressiveness on pricing something that has happened here? Any comments that you can give on EMEA Deco are welcome. I think Sherwin has a relatively niche position in UK and one or two other markets. Thank you. Hello, good morning, and thank you for taking my question. hello good morning and thank you for taking my question I'm interested in two areas where Sherwin has taken market share, Refinish and the EMEA Decorative market. i'm interested in two areas where sherwin has taken market share refinish and the emea decorative market What is it that Sherwin has to offer in Refinish that its competitors don't? what is it that sherwin has to offer in refinish that its competitors don't Is the aggressiveness on pricing something that has happened here? is the aggressiveness on pricing something that has happened here Any comments that you can give on EMEA Deco are welcome. any comments that you can give on emea deco are welcome I think Sherwin has a relatively niche position in UK and one or two other markets. i think sherwin has a relatively niche position in uk and one or two other markets Thank you. thank you

Speaker 10: Thanks, Sebastian. On the Refinish side, I'll take you, not to make this a history lesson, but I think context is really important here. If you look at the acquisition of Valspar a few years ago, you leverage the best of both. We've combined not only our controlled distribution platform with our automotive business and everything that we have to offer with the subject matter expertise of our reps that are embedded in these customers' body shops. You layer in with Valspar, the waterborne technologies that we've been able to bring together, we really have created kind of a best of both in terms of the value proposition. Thanks, Sebastian. thanks sebastian On the Refinish side, I'll take you, not to make this a history lesson, but I think context is really important here. on the refinish side i'll take you not to make this a history lesson but i think context is really important here If you look at the acquisition of Valspar a few years ago, you leverage the best of both. if you look at the acquisition of valspar a few years ago you leverage the best of both We've combined not only our controlled distribution platform with our automotive business and everything that we have to offer with the subject matter expertise of our reps that are embedded in these customers' body shops. we've combined not only our controlled distribution platform with our automotive business and everything that we have to offer with the subject matter expertise of our reps that are embedded in these customers' body shops You layer in with Valspar, the waterborne technologies that we've been able to bring together, we really have created kind of a best of both in terms of the value proposition. you layer in with valspar the waterborne technologies that we've been able to bring together we really have created kind of a best of both in terms of the value proposition

Speaker 2: Yeah, I'll take a little bit on the Europe sales. I mean, Europe benefited from a reporting mix impact this quarter. A certain immaterial resin sales we had previously, you know, reported as part of Performance Coatings Group are now fully integrated and reflected in our global supply chain, which is reported here in our Consumer Brands Group. Don't read too much into the, you know, the much stronger reported sales. If you look at the core sales of Consumer Brands Group in Europe, it grew by more of a mid-single digit percentage if I exclude that resin classification. And similar to, you know, what we've seen in Europe with the challenging environment, DIY being a more challenged part of the segment. I think you see that playing out here. Yeah, I'll take a little bit on the Europe sales. yeah i'll take a little bit on the europe sales I mean, Europe benefited from a reporting mix impact this quarter. i mean europe benefited from a reporting mix impact this quarter A certain immaterial resin sales we had previously, you know, reported as part of Performance Coatings Group are now fully integrated and reflected in our global supply chain, which is reported here in our Consumer Brands Group. a certain immaterial resin sales we had previously you know reported as part of performance coatings group are now fully integrated and reflected in our global supply chain which is reported here in our consumer brands group Don't read too much into the, you know, the much stronger reported sales. don't read too much into the you know the much stronger reported sales If you look at the core sales of Consumer Brands Group in Europe, it grew by more of a mid-single digit percentage if I exclude that resin classification. if you look at the core sales of consumer brands group in europe it grew by more of a mid-single digit percentage if i exclude that resin classification And similar to, you know, what we've seen in Europe with the challenging environment, DIY being a more challenged part of the segment. and similar to you know what we've seen in europe with the challenging environment diy being a more challenged part of the segment I think you see that playing out here. i think you see that playing out here

Speaker 12: Thank you, Sebastian. Thank you, Sebastian. thank you sebastian

Speaker 21: Your next question for today is from Eric Bosshard with Cleveland Research Company. Your next question for today is from Eric Bosshard with Cleveland Research Company. your next question for today is from eric bosshard with cleveland research company

Speaker 7: Hi, I'm intrigued you commented the DIY store volume in stores is up 5%, it feels like the rest of retailer was down maybe 5%. Can you just talk about why, then also talk a bit more about the down 5 at the rest of retail and where that's going from here? Hi, I'm intrigued you commented the DIY store volume in stores is up 5%, it feels like the rest of retailer was down maybe 5%. hi i'm intrigued you commented the diy store volume in stores is up 5% it feels like the rest of retailer was down maybe 5% Can you just talk about why, then also talk a bit more about the down 5 at the rest of retail and where that's going from here? can you just talk about why then also talk a bit more about the down 5 at the rest of retail and where that's going from here

Speaker 10: Eric, if you look at the DIY segment and split it into, you know, the premium, the homeowner that's willing to pay a premium rather and is looking for that high-touch service generally prefers the specialty store environment. Our sales were up, it was not volume. That's obviously a mix of both volume and price. If you then look at more of that value-conscious homeowner that might prefer a specialty or a home center environment rather, that's where our strategic partnerships, you know, with Lowe's and Menards and others are so important, so that together we can cover that landscape. Really it is kind of unique if you split those out. They're different behaviors right now given some of the inflationary pressures. Eric, if you look at the DIY segment and split it into, you know, the premium, the homeowner that's willing to pay a premium rather and is looking for that high-touch service generally prefers the specialty store environment. eric if you look at the diy segment and split it into you know the premium the homeowner that's willing to pay a premium rather and is looking for that high-touch service generally prefers the specialty store environment Our sales were up, it was not volume. our sales were up it was not volume That's obviously a mix of both volume and price. that's obviously a mix of both volume and price If you then look at more of that value-conscious homeowner that might prefer a specialty or a home center environment rather, that's where our strategic partnerships, you know, with Lowe's and Menards and others are so important, so that together we can cover that landscape. if you then look at more of that value-conscious homeowner that might prefer a specialty or a home center environment rather that's where our strategic partnerships you know with lowe's and menards and others are so important so that together we can cover that landscape Really it is kind of unique if you split those out. really it is kind of unique if you split those out They're different behaviors right now given some of the inflationary pressures. they're different behaviors right now given some of the inflationary pressures

Speaker 12: Thank you, Eric. Thank you, Eric. thank you eric

Speaker 21: Your next question is from Jeff Zekauskas with JPMorgan. Your next question is from Jeff Zekauskas with JP Morgan. your next question is from jeff zekauskas with jp morgan

Speaker 11: Thanks very much. Is it fair to say that your architectural paint price increase happened at the very beginning of the year, but there haven't been architectural increases since then. In your industrial businesses, you have increased prices later in 2026, and I was wondering how much that might be. What those price issuances were. Secondly, in your description of raw materials, you said that 75% of your raw materials are related to propylene, and you said that propylene was up 50%. Wouldn't that mean that your raw materials are up 38%, 37%, if you ignore timing? Thanks very much. thanks very much Is it fair to say that your architectural paint price increase happened at the very beginning of the year, but there haven't been architectural increases since then. is it fair to say that your architectural paint price increase happened at the very beginning of the year but there haven't been architectural increases since then In your industrial businesses, you have increased prices later in 2026, and I was wondering how much that might be. in your industrial businesses you have increased prices later in 2026 and i was wondering how much that might be What those price issuances were. what those price issuances were Secondly, in your description of raw materials, you said that 75% of your raw materials are related to propylene, and you said that propylene was up 50%. secondly in your description of raw materials you said that 75% of your raw materials are related to propylene and you said that propylene was up 50% Wouldn't that mean that your raw materials are up 38%, 37%, if you ignore timing? wouldn't that mean that your raw materials are up 38% 37% if you ignore timing

Speaker 2: Hey, Jeff, it's Ben. I'm gonna take this first part here. I'll let Jim answer the question about raw materials. Yep, the pricing phasing, and you're right. Yes, our architectural price that we went out with in January, you know, the intention before the conflict was that, you know, that's the price that we needed for the year. If you go back to our initial raw material guidance of up low single digits for the year, we built that, you know, that initial pricing based on that assumption that we made at that time. Hey, Jeff, it's Ben. hey jeff it's ben I'm gonna take this first part here. i'm gonna take this first part here I'll let Jim answer the question about raw materials. i'll let jim answer the question about raw materials Yep, the pricing phasing, and you're right. yep the pricing phasing and you're right Yes, our architectural price that we went out with in January, you know, the intention before the conflict was that, you know, that's the price that we needed for the year. yes our architectural price that we went out with in january you know the intention before the conflict was that you know that's the price that we needed for the year If you go back to our initial raw material guidance of up low single digits for the year, we built that, you know, that initial pricing based on that assumption that we made at that time. if you go back to our initial raw material guidance of up low single digits for the year we built that you know that initial pricing based on that assumption that we made at that time As you can imagine, we have a lot of architectural customers who are on contracts, or we have other, you know, points throughout the year, and we've talked about our effectiveness can get better throughout the year as you hit, you know, those certain milestones where we're able to get more pricing. Yeah, you're right. A bulk of that comes at the start of the year. Industrial historically has been all throughout the year at different times based on business needs, based on what the raw material basket is doing. I think what you've seen post Middle East conflict, we've had to go out and reassess in all parts of the business. As you can imagine, we have a lot of architectural customers who are on contracts, or we have other, you know, points throughout the year, and we've talked about our effectiveness can get better throughout the year as you hit, you know, those certain milestones where we're able to get more pricing. as you can imagine we have a lot of architectural customers who are on contracts or we have other you know points throughout the year and we've talked about our effectiveness can get better throughout the year as you hit you know those certain milestones where we're able to get more pricing Yeah, you're right. yeah you're right A bulk of that comes at the start of the year. a bulk of that comes at the start of the year Industrial historically has been all throughout the year at different times based on business needs, based on what the raw material basket is doing. industrial historically has been all throughout the year at different times based on business needs based on what the raw material basket is doing I think what you've seen post Middle East conflict, we've had to go out and reassess in all parts of the business. i think what you've seen post middle east conflict we've had to go out and reassess in all parts of the business Even though there's not an announced general increase for Paint Stores Group, as we try to manage, you know, through cost out and other simplification efforts, you know, there might be some spotty other areas where we are able to get price without doing a full launch. Similarly, with the industrial business, as you can imagine, Asia and Europe, where you've got pricing that, you know, is, has got to be 20% or higher, to cover, you know, where you have the bigger part of the inflation happening. Our teams are out by the business unit and geography, getting, you know, coverage, you know, where they need. Again, that would be bigger again on industrial in APAC, in EMEA. Even though there's not an announced general increase for Paint Stores Group, as we try to manage, you know, through cost out and other simplification efforts, you know, there might be some spotty other areas where we are able to get price without doing a full launch. even though there's not an announced general increase for paint stores group as we try to manage you know through cost out and other simplification efforts you know there might be some spotty other areas where we are able to get price without doing a full launch Similarly, with the industrial business, as you can imagine, Asia and Europe, where you've got pricing that, you know, is, has got to be 20% or higher, to cover, you know, where you have the bigger part of the inflation happening. similarly with the industrial business as you can imagine asia and europe where you've got pricing that you know is has got to be 20% or higher to cover you know where you have the bigger part of the inflation happening Our teams are out by the business unit and geography, getting, you know, coverage, you know, where they need. our teams are out by the business unit and geography getting you know coverage you know where they need Again, that would be bigger again on industrial in APAC, in EMEA. again that would be bigger again on industrial in apac in emea There are still industrial impacts that are happening in the Americas. There's pricing that is going out there on the industrial side. I think as we've talked about on a couple of the different questions and even in Heidi's opening remarks, you know, being very surgical and trying to find where we can take that price without having to be generic, because we realize right now in this inflationary environment, we don't wanna put volume at risk. You have to do that maybe to a stronger degree than you normally would see us do. There are still industrial impacts that are happening in the Americas. there are still industrial impacts that are happening in the americas There's pricing that is going out there on the industrial side. there's pricing that is going out there on the industrial side I think as we've talked about on a couple of the different questions and even in Heidi's opening remarks, you know, being very surgical and trying to find where we can take that price without having to be generic, because we realize right now in this inflationary environment, we don't wanna put volume at risk. i think as we've talked about on a couple of the different questions and even in heidi's opening remarks you know being very surgical and trying to find where we can take that price without having to be generic because we realize right now in this inflationary environment we don't wanna put volume at risk You have to do that maybe to a stronger degree than you normally would see us do. you have to do that maybe to a stronger degree than you normally would see us do

Speaker 10: Our confidence that being very thoughtful about chasing volume in this environment, that with the right program stuff, we're trading these contractors up because the ability to get them on and off of job sites faster, the ability, you know, less touch-up required. They're willing to pay a premium for that, even in an inflationary environment, because 85% of their cost is labor. We're being very thoughtful to get the volume, and it has to be the right volume to Ben's earlier point. I'm very confident in the team's ability to get these contractors into premium gallons. Our confidence that being very thoughtful about chasing volume in this environment, that with the right program stuff, we're trading these contractors up because the ability to get them on and off of job sites faster, the ability, you know, less touch-up required. our confidence that being very thoughtful about chasing volume in this environment that with the right program stuff we're trading these contractors up because the ability to get them on and off of job sites faster the ability you know less touch-up required They're willing to pay a premium for that, even in an inflationary environment, because 85% of their cost is labor. they're willing to pay a premium for that even in an inflationary environment because 85% of their cost is labor We're being very thoughtful to get the volume, and it has to be the right volume to Ben's earlier point. we're being very thoughtful to get the volume and it has to be the right volume to ben's earlier point I'm very confident in the team's ability to get these contractors into premium gallons. i'm very confident in the team's ability to get these contractors into premium gallons

Speaker 12: Jeff, on your question about propylene, I'd give you a couple of things to think about. The 50% that I mentioned is a forecast of where it could go perhaps over the rest of the year. We'll see how that plays out. As Ben mentioned here, we'll be out with price if we need to there. The other thing I would say is, as you know, we're not buying propylene, we're buying the things that are derivatives of propylene. Those do take some time to flow into our basket, and we'll be ready again. If we need to go out with additional surgical price increases, that is, we'll be prepared to do that. Thanks for the question. Jeff, on your question about propylene, I'd give you a couple of things to think about. jeff on your question about propylene i'd give you a couple of things to think about The 50% that I mentioned is a forecast of where it could go perhaps over the rest of the year. the 50% that i mentioned is a forecast of where it could go perhaps over the rest of the year We'll see how that plays out. we'll see how that plays out As Ben mentioned here, we'll be out with price if we need to there. as ben mentioned here we'll be out with price if we need to there The other thing I would say is, as you know, we're not buying propylene, we're buying the things that are derivatives of propylene. the other thing i would say is as you know we're not buying propylene we're buying the things that are derivatives of propylene Those do take some time to flow into our basket, and we'll be ready again. those do take some time to flow into our basket and we'll be ready again If we need to go out with additional surgical price increases, that is, we'll be prepared to do that. if we need to go out with additional surgical price increases that is we'll be prepared to do that Thanks for the question. thanks for the question

Speaker 21: We have reached the end of the question and answer session, and I will now turn the call over to Jim Jaye for closing remarks. We have reached the end of the question and answer session, and I will now turn the call over to Jim Jaye for closing remarks. we have reached the end of the question and answer session and i will now turn the call over to jim jaye for closing remarks

Speaker 12: Thank you, Holly, thank you again everyone for joining our call. Special thanks to our employees for their hard work in delivering a really solid start to our year. I think Heidi said it well. Our strategy is clear, it's working, it's not changing. We're continuing to focus on providing our customers with solutions that make them more productive and profitable. Thank you, Holly, thank you again everyone for joining our call. thank you holly thank you again everyone for joining our call Special thanks to our employees for their hard work in delivering a really solid start to our year. special thanks to our employees for their hard work in delivering a really solid start to our year I think Heidi said it well. i think heidi said it well Our strategy is clear, it's working, it's not changing. our strategy is clear it's working it's not changing We're continuing to focus on providing our customers with solutions that make them more productive and profitable. we're continuing to focus on providing our customers with solutions that make them more productive and profitable You can count on us. We're gonna continue executing at a high level, focusing on winning new business and controlling what we can. I'll close with a reminder, our 2026 financial community presentation is coming up in Cleveland this year, September 24th. You'll have an opportunity to see our investments in our new global headquarters and our global technology center. Excited for all of you to experience that and see how that's moving the needle forward for us. Thanks again for your interest in Sherwin-Williams. As always, we'll be available for follow-up calls and hope you have a great day. Thank you. You can count on us. you can count on us We're gonna continue executing at a high level, focusing on winning new business and controlling what we can. we're gonna continue executing at a high level focusing on winning new business and controlling what we can I'll close with a reminder, our 2026 financial community presentation is coming up in Cleveland this year, September 24th. i'll close with a reminder our 2026 financial community presentation is coming up in cleveland this year september 24th You'll have an opportunity to see our investments in our new global headquarters and our global technology center. you'll have an opportunity to see our investments in our new global headquarters and our global technology center Excited for all of you to experience that and see how that's moving the needle forward for us. excited for all of you to experience that and see how that's moving the needle forward for us Thanks again for your interest in Sherwin-Williams. thanks again for your interest in sherwin-williams As always, we'll be available for follow-up calls and hope you have a great day. as always we'll be available for follow-up calls and hope you have a great day Thank you. thank you

Speaker 21: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. This concludes today's conference, and you may disconnect your lines at this time. this concludes today's conference and you may disconnect your lines at this time Thank you for your participation. thank you for your participation