Sherwin Williams said this week that the strong demand for paint is not enough to prevent its sales and profit forecasts from having to be cut.
The company shared with investors that it is facing some of the same raw material shortages that haunt other industries, and this is driving up the cost of the supplies it needs to make paint.
“The persistent and industry-wide raw material availability restrictions and price inflation that we previously reported have worsened and we do not anticipate any improvement in supply or lower raw material prices as expected in our fourth quarter,” said CEO John Morikis.
The paint manufacturer is reacting to the increased raw material costs with a price increase. However, the company does not expect to resume normal production as quickly as it previously hoped.
“Our suppliers are now reporting that the effects of Hurricane Ida are more severe and will last longer than initially assumed,” said Morkis. “Production of several key resins, additives and solvents, which is expected to resume in late September, has been postponed.”
Sherwin Williams continues to plan to add 50 million gallons of additional capacity online over the next six months. The company also announced that it will purchase Specialty Polymers in a transaction that is expected to close before the end of the year.
“While the visibility of the recovery in the supply chain is limited … we will continue to invest in our strategic growth initiatives,” said Morikis.