Sherwin-Williams Co. (NYSE:SHW)

Gross Profit Margin

The gross profit margin exhibited a downward trend from March 2021 through June 2022, declining from 47.19% to a low near 41.01%. Beginning in the third quarter of 2022, the margin demonstrated a consistent recovery, rising steadily through the end of the forecast period in September 2025 to reach approximately 48.88%. This indicates an initial compression of profitability at the gross level, followed by a sustained improvement.

Operating Profit Margin

Operating profit margin followed a pattern similar to the gross margin, with a gradual decrease from 15.63% at the start of 2021 to about 11.94% by the middle of 2022. After this trough, operating margin progressively improved, peaking near 16.66% in the third quarter of 2024 before slightly declining yet remaining elevated relative to earlier periods, ending close to 16.04%. This suggests enhanced operational efficiency or cost control over the later periods.

Net Profit Margin

The net profit margin decreased from 11.23% in the first quarter of 2021 to roughly 8.45% in the middle of 2022, parallel to other profitability measures. Subsequently, it experienced a recovery, rising to a peak around 11.63% in the third quarter of 2024, followed by a modest pullback, stabilizing near 11.05% by September 2025. This reflects improvement in overall profitability including after-tax effects during the latter periods.

Return on Equity (ROE)

ROE demonstrated notable volatility throughout the observed timeline. Starting at 68.81% in March 2021, it peaked above 81% in the first quarter of 2022 before declining steadily to around 57.83% by mid-2025. This downward trend in the latter periods could suggest increased equity base, reduced net income relative to equity, or changes in leverage, indicating fluctuating effectiveness in generating shareholder returns.

Return on Assets (ROA)

The ROA showed a decline from 10.37% at the start of 2021 to approximately 7.96% in mid-2022, indicating a reduction in asset utilization efficiency. A rebound followed, with ROA peaking near 11.35% in late 2024, before a gradual decrease to just under 10% by mid-2025. This trend reflects an initial reduction in asset profitability, with subsequent improvement and some stabilization at a higher level than the mid-cycle trough.

The quarterly financial data reveals several notable trends in profit generation and sales performance. Gross profit amounts exhibit fluctuations with intermittent rises and declines over the observed periods. Starting at approximately $2.11 billion, gross profit trends upward and downward in phases, peaking above $3 billion by the later periods in 2024 and 2025. This suggests periods of strong profitability interspersed with modest contractions.

Net sales show a broadly similar pattern of variability over the quarters. Initial sales around $4.66 billion gradually increase, with notable surges reaching over $6.3 billion towards the later periods. Despite some quarters with reduced sales, the overall trajectory signals growth, reflecting either increased market demand or successful sales strategies.

The gross profit margin percentage presents a steadily improving trend across the timeline. Beginning at roughly 47%, it dipped to a low near 41% in early 2022 but then embarked on a consistent upward climb. By the most recent quarters, margins approach 49%, indicating enhanced efficiency in converting sales into profit or improved cost management in production and operations.

Gross Profit

Experienced cyclical variance with quarters of growth outpacing declines, culminating in peak profitability around $3.12 billion in late 2024 and early 2025, reflecting resilience in earnings power.

Net Sales

Demonstrated an overall increasing pattern from $4.66 billion to over $6.35 billion, despite intermittent dips, suggesting an expanding revenue base and potential market share gains.

Gross Profit Margin

Showed an initial contraction from 47% to near 41% but subsequently improved steadily to nearly 49%, evidencing stronger operational margin control and cost efficiency.

In summary, the financial data portrays a company exhibiting growth in top-line sales and enhanced profitability margins over time, despite experiencing short-term fluctuations. The rising gross profit margin in particular reflects successful management of costs relative to sales, improving overall financial health.

Operating Income Trends

The operating income exhibits notable fluctuations across the reported periods. From early 2021, it initially rises sharply from $589,400 thousand in Q1 2021 to a peak of $901,000 thousand in Q2 2021, followed by a decline in the next two quarters. Subsequently, the income presents a pattern of recovery and growth, reaching a significant high of $1,251,300 thousand in Q2 2024. Especially from 2023 onward, the trend shows consistent quarterly growth with some periodic dips, indicating cyclical influences but overall positive momentum in operating earnings.

Net Sales Development

Net sales demonstrate a general upward trajectory over the analyzed timeframe. Starting from $4,656,000 thousand in Q1 2021, sales volume increases with some volatility, peaking at $6,314,500 thousand by Q3 2025. Throughout this period, there are intermittent decreases, notably around Q4 of several years, which may correspond to seasonal business cycles. The sales volume growth supports the increase in operating income observed, highlighting expanding market activity and/or pricing adjustments.

Operating Profit Margin Analysis

The operating profit margin has shown a steady improvement over time. Initially at 15.63% in Q1 2021, the margin experiences a slight dip mid-2021 and 2022, falling to a low around 11.94% in Q2 2022. However, from late 2022 forward, the margin gradually increases, surpassing the initial 2021 levels and reaching approximately 16.66% in Q3 2025. This represents enhanced cost efficiency or better pricing strategies despite some fluctuations in sales and operating income levels.

Summary of Observations

The data reflects overall growth in sales and profitability, accompanied by an improving operating margin that signals enhanced operational efficiency. Despite some volatility in individual quarters, the company demonstrates resilience and an ability to improve financial performance progressively. Seasonal effects seem evident, especially in the fourth quarters where dips occur more frequently, but these are outweighed by positive trends in subsequent quarters. The interplay between rising net sales and strengthening margin underpins solid operating income advances across the analyzed quarters.

Net Income Trends

Net income exhibits notable fluctuations across the periods analyzed. Initially, there is a significant increase from 409.6 million USD in March 2021 to a peak of 685.1 million USD in September 2022. This peak is followed by a sharp decline to 356.2 million USD by December 2023. Subsequently, the net income rebounds strongly, reaching 833.1 million USD by September 2025. The pattern indicates periods of volatility but overall growth in the long term.

Net Sales Patterns

Net sales show a consistent upward trajectory with moderate variability. Starting at approximately 4.66 billion USD in March 2021, sales increased steadily to around 6.35 billion USD by September 2025. Although there is a minor dip observed in some quarters, particularly towards the end of 2022 and early 2024, the overall trend reflects consistent growth in sales revenue over the reviewed timeframe.

Net Profit Margin Evolution

The net profit margin indicates a general improvement throughout the periods. Initially at 11.23% in March 2021, the margin dips to lows near 8.45% in June 2022 but recovers steadily thereafter. By June 2025, the margin stabilizes around 11%, slightly exceeding the earlier figures, suggesting enhanced profit efficiency and cost management over time despite some fluctuations.

Summary of Financial Performance

The financial data depicts a company experiencing growth in both top-line revenue and profitability over the analyzed quarters. While net income and profit margins display some quarter-to-quarter volatility, the overall trend is positive with an upward direction in sales and improved margin percentages, indicating effective operational management and resilience in maintaining profitability. The cycles of decline and recovery may reflect broader market influences or internal adjustments, but the prevailing direction supports a strengthening financial position.

The financial data reveals several notable trends in net income, shareholders’ equity, and return on equity (ROE) over the examined periods.

Net Income

Net income exhibits considerable fluctuation throughout the periods. The values generally peak in the mid-year quarters, such as June and September, with some decline towards the year-end quarters. For example, in 2021, net income rose from 409.6 million in March to 648.6 million in June, then dropped to 304.0 million by December. A similar pattern is observed in subsequent years, with peaks often occurring in June or September, followed by declines in December. Despite these fluctuations, the overall trend shows growth, with net income increasing from 409.6 million in March 2021 to 833.1 million in September 2025, indicating strengthening profitability over the long term.

Shareholders’ Equity

Shareholders’ equity shows a declining trend during the initial periods, decreasing from approximately 3.08 billion in March 2021 to around 2.23 billion in March 2022. This decline is followed by a recovery phase starting mid-2022, where equity rises steadily to reach approximately 4.43 billion by September 2025. This pattern suggests both challenges in the early periods with possible equity reduction or payouts, followed by sustained capital growth or retained earnings accumulation in later years.

Return on Equity (ROE)

ROE remains relatively high throughout all periods, consistently above 57%, reflecting the company’s strong ability to generate profit from shareholders’ investments. However, the metric shows some volatility, peaking around 81.71% in March 2022 and gradually moderating in the later years to values around 58-69%. This moderation may indicate expanding equity balances tempering net income growth or cyclical profitability variations, but the overall ROE levels suggest continued efficient use of equity capital.

Overall Insights

The company demonstrates a cyclical pattern in net income with mid-year peaks and year-end troughs, possibly linked to seasonal business factors. The early decline and subsequent rebound of shareholders’ equity could reflect strategic financial decisions or market conditions impacting equity structure. Despite these variations, the consistently strong ROE indicates effective capital management. The rising net income and equity levels over time point to stable growth and robust financial health going forward.

Net Income

Net income demonstrates notable fluctuations over the observed periods. Initial values peaked at 648,600 thousand US dollars in June 2021, followed by a decline reaching a low of 304,000 thousand US dollars by December 2021. Thereafter, net income showed a pattern of recovery, with intermittent highs and lows. Noteworthy peaks occurred in September 2022, June 2023, June 2024, and September 2025, each surpassing 750,000 thousand US dollars. Conversely, dips occurred notably at the end of 2021, end of 2022, end of 2023, and end of 2024. The data suggest a recurring seasonal pattern with strong mid-year performances and weaker end-of-year results.

Total Assets

Total assets exhibit a generally upward trajectory throughout the timeline. The asset base increased from approximately 20,435,000 thousand US dollars in March 2021 to over 26,206,400 thousand US dollars by September 2025, indicating consistent asset growth. Although minor fluctuations are present, these are infrequent and relatively small compared to the overall trend. The growth in assets points to ongoing asset accumulation or revaluation efforts aligning with business expansion or investment.

Return on Assets (ROA)

Return on assets (ROA) percentages display moderate volatility but maintain a relatively stable range between approximately 7.96% and 11.35%. Initial ROA levels decline from 10.37% at the start of 2021 to below 8% mid-2022, coinciding with the periods of lower net income. Following this trough, ROA gradually improves, reaching a peak of 11.35% in December 2024, suggesting enhanced efficiency in asset utilization during that period. Towards the end of the data set, ROA slightly declines but remains above 9%, indicating sustained profitability relative to asset base. This pattern suggests successful ongoing operational management despite the income’s seasonal fluctuations.

Overall Analysis

The financial data reveal a company experiencing cyclical net income variations, potentially linked to seasonality or market cycles, while consistently expanding its asset base. The ROA trend supports the interpretation of improving operational efficiency despite the income volatility. The convergence of rising assets with stable ROA implies that asset growth is effectively contributing to returns. However, continued monitoring of end-of-year income dips and their causes would be prudent to maintain profitability stability.