Shares of Sherwin-Williams tanked on Tuesday after the company warned that its earnings in 2018 came well short of guidance, citing weak sales in North American stores.
The paint maker on Tuesday reported its preliminary results for the fourth quarter and full year 2018. Net income for 2018 is now expected to be $11.15 a share, well below previous guidance of between $13.85 and $14 a share. Shares of the lost more than 6 percent in Tuesday’s trading.
The company CEO John Morikis said its performance in the fourth quarter “was disappointing across the board,” with sales growth for the quarter being only 2 percent, well below the Wall Street’s estimate of about 5 percent.
Analysts will often look at the company as a barometer for health of the consumer and housing market.
Retailers including Macy’s have reported weaker-than-expected holiday sales this week. Shares of Sherwin-Williams have fallen more than 12 percent in the past 12 months, underperforming the S&P 500 which dropped about 7 percent in the same period.
“Consolidated revenue growth for the fourth quarter fell well short of our previous expectation, due in large part to weak sales growth by our North American stores in October and November,” Morikis said in a statement. “Store sales rebounded somewhat in December, but not enough to bring in the quarter.”