The Sherwin-Williams Company stock research
FY2024 Q3
The Sherwin-Williams (SHW) Gross Margin — Quarter Ended Sep 30, 2024
Revenue decreased slightly from the prior quarter but increased compared to the same quarter last year. Gross profit followed a similar pattern, while cost of revenue declined both sequentially and year-over-year, resulting in a gross margin that improved relative to both periods.
Gross margin takeaway
Quarter ended Sep 30, 2024 · FY2024 Q3
Revenue decreased slightly from the prior quarter but increased compared to the same quarter last year. Gross profit followed a similar pattern, while cost of revenue declined both sequentially and year-over-year, resulting in a gross margin that improved relative to both periods.
- The gross margin improved sequentially and year-over-year, driven by a lower cost of revenue relative to revenue. The strongest observable driver is the reduction in cost of goods sold as a proportion of net sales.
- Compared to the immediately preceding quarter, revenue was slightly lower while gross profit was also slightly lower, but cost of revenue decreased, leading to a higher gross margin. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was lower, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
49.1%
Gross profit
$3.0B
Revenue
$6.2B
Cost of revenue
$3.1B
Quarter-over-quarter change
+0.3 pts
Year-over-year change
+1.5 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 |
|---|---|---|---|---|
| Dec 31, 2023 | $5.3B | $2.5B | $2.7B | 48.5% |
| Mar 31, 2024 | $5.4B | $2.5B | $2.8B | 47.2% |
| Jun 30, 2024 | $6.3B | $3.1B | $3.2B | 48.8% |
| Sep 30, 2024 | $6.2B | $3.0B | $3.1B | 49.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2024
+0.3 pts
Year-over-year change
Sep 30, 2023
+1.5 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 lower cost of revenue relative to revenue. The strongest observable driver is the reduction in cost of goods sold as a proportion of net sales.
Compared to the immediately preceding quarter, revenue was slightly lower while gross profit was also slightly lower, but cost of revenue decreased, leading to a higher gross margin. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was lower, and gross margin improved.
Monitor the trajectory of cost of goods sold relative to net sales, as its decline was the primary factor behind the gross margin improvement.