The Sherwin-Williams Company (NYSE:SHW) Q1 2015 Earnings Conference Call - Final Transcript

Apr 16, 2015 • 11:00 am ET

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The Sherwin-Williams Company (NYSE:SHW) Q1 2015 Earnings Conference Call - Final Transcript

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Q & A
Executive
Chris Connor

that is not the case.

Operator
operator

Rosemarie Morbelli, Gabelli & Company.

Analyst
Rosemarie Morbelli

I was wondering, we talked a lot about from selling price increases offsetting FX devaluation and so on but as your raw material costs are coming down, do you anticipate some selling price pressure having to cut some of your pricing obviously outside of contracts?

Executive
John Morikis

Not significantly or haven't impacted all I don't think really. The large jobs are always competitive we close those accordingly. The raw materials are one element of the products that we are -- one component of what goes into the selling price are services that we provide and the quality of the product, the people that we have with our customers all are a component of that. So, I think we're going to continue to see the pressure where we always have seen it, but nothing anymore than we have in the past.

Analyst
Rosemarie Morbelli

And then you also talked about the high level of expectations or satisfaction rather from contractors. Do you see any change in the do-it-yourself? Do you see that particular part of the equation growing still this year? Or do you think that people have more or less repainted what they were going to repaint for the last couple of years?

Executive
Chris Connor

We never think that Rosemarie, as soon as we're finished. But we continue to see, across the entire country, a shift towards the painting contractor away from the DIY just as a demographic that our country support, and aging population and less free time, et cetera. Having said that, the remaining portion of the market, which is around 40% of all the gallons of purchase price DIY, we would expect this to be a good year.

Bob has mentioned about residential repaint being one of the strongest segments, residential repaint is both DIY and pro and we've seen nice growth there as well too. We have given color on our DIY sales gains inside the stores organization and the Consumer Group is mostly DIY. So, we would expect to see nice results for this year.

Analyst
Rosemarie Morbelli

And the HGTV is also DIY, correct?

Executive
Chris Connor

That is correct and that will be an impact as well.

Analyst
Rosemarie Morbelli

And if I may, how long do you expect this housing recovery to continue based on your experience, based on historical data? Do you think it is another two years to go, another three years? Any thoughts?

Executive
Bob Wells

Rosemarie, this is Bob. We've said kind of -- we didn't think for the last couple of years, that we really like the pace of this recovery that we're not seeing huge year-over-year increases in activity on either the residential or non-residential side of the market. And at this measured pace, depending on where the market peaks exactly, it could certainly go another three to five years.

We think that 1.3 million to 1.4 million residential starts is normal. But we've been running below that normal rate for quite a while now for a number of years now. And so there should