The Sherwin-Williams Company (SHW) raised its full-year 2026 diluted earnings outlook after second-quarter sales growth accelerated and same-store sales at its paint stores picked up, even as the company said demand remained soft.

Consolidated net sales rose 7.5% to $6.79 billion in the three months ended June 30, 2026, faster than the 6.8% year-over-year increase in the first quarter. Diluted net income per share increased 14.3% to $3.43, and adjusted diluted net income per share increased 9.5% to $3.70. EBITDA rose 13.8% to $1.43 billion, or 21.1% of net sales.

Chair, President and Chief Executive Officer Heidi G. Petz said sales exceeded guidance on a consolidated basis and across all three reportable segments, driven by growth investments, new account wins and increased share of wallet, despite “no meaningful improvement in demand.” Adjusted EBITDA margin expanded 60 basis points to 21.5% year over year.

Paint Stores Group net sales increased 5.1% to $3.89 billion. Same-store sales from stores open more than twelve calendar months rose 4.2%, up from 2.4% in the first quarter. Selling-price increases contributed a mid-single-digit percentage, and volume grew a low-single-digit percentage. Segment profit rose 4.5% to $957.6 million, and reported segment margin was 24.6%. Net sales increased in all professional end markets, led by a double-digit rise in protective and marine, a high-single-digit rise in commercial and a mid-single-digit rise in residential repaint.

Consumer Brands Group net sales increased 21.5% to $983.5 million, primarily due to the October 2025 acquisition of Suvinil, higher North America sales and a 1.6% favorable foreign-currency impact. Segment profit rose 29.7% to $212.9 million, and reported segment margin expanded to 21.6% from 20.3%. Adjusted segment profit, which excludes Valspar acquisition-related amortization and severance and other restructuring expenses, rose 33.1% to $241.4 million.

Performance Coatings Group net sales increased 6.3% to $1.91 billion, with low-single-digit price increases from product mix, low-single-digit volume growth and a 2.0% favorable foreign-currency impact. Segment profit rose 11.5% to $273.3 million, and reported segment margin expanded to 14.3% from 13.6%. General Industrial and Automotive Refinish each increased by a high-single-digit percentage, and Packaging, Industrial Wood and Coil each increased by a mid-single-digit percentage.

Gross profit as a percent of net sales was 49.2%. Petz said the company implemented pricing actions to offset raw-material inflation that pressured gross margin. Income before income taxes rose 12.9% to $1.11 billion, or 16.4% of net sales. The increase reflected higher net sales, partially offset by a moderate rise in raw-material costs, higher employee-related costs, incremental SG&A associated with Suvinil, higher administrative costs related to a new global headquarters and technology center, and additional interest expense on higher short-term borrowings and long-term debt.

The company generated $1.49 billion in net operating cash in the first six months of 2026 and returned $2.23 billion to shareholders through dividends and repurchases of 5.6 million shares. In the second quarter, net operating cash improved 21% and free cash flow conversion was 86%. Remaining authorization to purchase common stock was 24.0 million shares at June 30.

The company raised full-year 2026 diluted net income per share guidance to $10.92 to $11.32, including Valspar acquisition-related amortization of $0.81 a share and severance and other restructuring expenses of $0.07 a share, from the $10.70 to $11.10 range reaffirmed after the first quarter. Adjusted diluted net income per share guidance was raised to $11.80 to $12.20 from $11.50 to $11.90. Third-quarter 2026 consolidated net sales are expected up a mid- to high-single-digit percentage versus the third quarter of 2025, and full-year 2026 net sales are expected up a mid- to high-single-digit percentage versus full-year 2025.

Petz said customer sentiment and leading indicators point to continued demand softness in the second half. During the second quarter, the company took restructuring actions expected to generate about $17 million of annual savings and announced an 8% Paint Stores Group price increase effective September 1.