The Sherwin-Williams Company stock research
FY2023 Q2
The Sherwin-Williams (SHW) Gross Margin — Quarter Ended Jun 30, 2023
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue was lower year over year but higher sequentially. Gross margin improved versus both periods, reflecting a stronger relationship between revenue and cost of revenue.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q2
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue was lower year over year but higher sequentially. Gross margin improved versus both periods, reflecting a stronger relationship between revenue and cost of revenue.
- The gross margin improved sequentially and year over year, driven by a larger increase in gross profit relative to revenue growth. The strongest observable driver is the reduction in cost of revenue as a proportion of revenue compared to the prior year.
- Compared to the immediately preceding quarter, revenue and gross profit were higher, and gross margin improved. Compared to the same quarter one year earlier, revenue and gross profit were higher, while cost of revenue was lower, leading to a higher gross margin.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
46.0%
Gross profit
$2.9B
Revenue
$6.2B
Cost of revenue
$3.4B
Quarter-over-quarter change
+1.5 pts
Year-over-year change
+4.3 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $5.4B | $2.4B | $3.0B | 44.5% |
| Jun 30, 2023 | $6.2B | $2.9B | $3.4B | 46.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
+1.5 pts
Year-over-year change
Jun 30, 2022
+4.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improved sequentially and year over year, driven by a larger increase in gross profit relative to revenue growth. The strongest observable driver is the reduction in cost of revenue as a proportion of revenue compared to the prior year.
Compared to the immediately preceding quarter, revenue and gross profit were higher, and gross margin improved. Compared to the same quarter one year earlier, revenue and gross profit were higher, while cost of revenue was lower, leading to a higher gross margin.
Monitor the trend in cost of revenue relative to revenue, as its year-over-year decline was a key factor in margin improvement.