Oct 27, 2026 earnings call — Earnings, pricing, and Suvinil integration
Company narrowed adjusted diluted EPS to $11.85 to $12.15 per share and kept the $12 midpoint unchanged.
Revenue $6.9B (est $6.8B) · EPS $3.63 (est $3.69)
Key quotes
"And I think the headline for you is you know, the pricing that we are going out with, it is behaving as intended."
"We continued to generate strong new account growth deepen relationships with existing customers and gain meaningful share across the business."
"A big part of that increase in COGS is related to Suvinil, about roughly 30% of that."
Analyst Q&A 21
store price increase timing
Q (Gregory Melich · Evercore): He wanted to know if more pricing will be needed next year to stay ahead of raw material cost inflation.
A: Management said they will keep pacing price increases as they have all year. They watch the cost basket and will take price or cost actions as needed to protect margins. They expect margin expansion when pricing rolls over in prior cycles.
"And I think the headline for you is you know, the pricing that we are going out with, it is behaving as intended." — Benjamin E. Meisenzahl (CFO)
Brazil pricing actions
Q (Jeff Zekauskas · JPMorgan): He asked about the Suvinil penalty size and whether those costs go away in 2027, and about Akzo's complaint on pricing in Brazil.
A: Management said there is nothing broad based in Brazil pricing and no broad discounting. They pointed to opportunistic micro promotions only. They did not give a dollar amount for the Suvenil impact in this answer.
"In terms of, pricing actions in Brazil, there is nothing broad based." — Heidi G. Petz (CEO·CHAIR)
consumer brands margin pressure
Q (Vincent Andrews · Morgan Stanley): He asked why Consumer Brands margins are softer and when pricing will match raw material inflation in that segment.
A: Management said Suvenil drove about 70% of the gross margin weakness and that timing of raw material and supply chain costs also pressures the segment. They noted some higher fuel and energy costs are embedded in global supply chain and that margin pressure reflects timing and Suvenil impact.
"I mean, 1 of them is, again, the Suvenil impact that is approximately 70% of that impact." — Benjamin E. Meisenzahl (CFO)
U.S. housing demand by segment
Q (KeyBanc): He asked for recent sales cadence in Q3 and October and near-term outlook as mortgage rates and housing could weaken.
A: Management gave a segment-by-segment view: residential repaint is gaining market share with strong new and active accounts; commercial is outperforming with sales up year over year; new residential is taking share despite softer completions. They said guidance is built on things they control, including structural cost actions, not on a macro recovery.
"If I start with our residential repaint segment, obviously, this is an area that we continue taking market share." — Heidi G. Petz (CEO·CHAIR)
choppy conditions into 2027
Q (Arun Viswanathan · RBC): He wanted more detail on the expected choppy conditions into 2027 and whether customers remain cautious and on expected volume levels.
A: Management said they would not frame everything around pricing and that they are improving the price-to-cost equation through multiple avenues including structural cost actions. They will remain disciplined and take price or cost actions where the economics require it, with realization curves varying by business and geography.
"It is improving the overall price-to-cost equation through multiple different avenues." — Benjamin E. Meisenzahl (CFO)
why price-cost balance disappointing
Q (Aleksey Yefremov · Barclays): He asked if costs rose faster than expected in Q3 or if they couldn't raise prices as planned.
A: Management said price is working as expected but other parts of the cost basket (conversion, fuel) can be temporary and they try to avoid passing temporary costs to customers. They emphasized a staggered pricing approach and ongoing cost actions to protect margins, viewing the pressure as short term.
"I would say, and as I mentioned earlier here, you know, the price is working as we expected." — Benjamin E. Meisenzahl (CFO)
price vs mix split
Q (Melius): He asked how much of 2026's price-mix gain was pure price versus mix, and how mix might affect 2027 sales growth.
A: Management said they do not break out price versus mix due to complexity. They noted premium mix benefits and reiterated midterm segment growth targets: stores mid-to-high single digits, industrial mid single digit (with acquisitions), CBG low single digits, and said current mix inversion is temporary.
"You know, we generally do not break out the price mix component." — Benjamin E. Meisenzahl (CFO)
FX and Suvinil risks in Brazil
Q (Christopher Parkinson · Wolfe): They asked how management plans to manage FX volatility and other Brazil risks related to Suvinil.
A: Management said they have good line of sight on which costs are dollar-denominated and that Latin America teams are experienced at getting price when currency moves. They expressed confidence in managing the situation but noted devaluation could impact income statement and balance sheet if it holds.
"We have very good line of sight to you know, which parts of the cost basket, you know, might be denominated in US dollars." — Benjamin E. Meisenzahl (CFO)
timing of next store price increase
Q (David Begleiter · Deutsche Bank): He asked whether to expect a typical January 1 price increase in Paint Stores Group or if they are still working through the September increase.
A: Management said they were not announcing any pricing decision on the call and will continue to review input costs each month. They said if they need to go, they will unapologetically go, but had no specific announcement today.
"The message is we are not announcing anything on our call today." — Heidi G. Petz (CEO·CHAIR)
store share gains in 2027
Q (Josh Spector · UBS): He asked if Paint Stores can maintain the 2–3% outperformance next year given prior investments and current cost savings.
A: Management said they are just getting started and see the largest share gains ahead in residential repaint where they are taking market share. They will continue strategic customer-facing investments with clear returns and see ample market share opportunity when demand recovers.
"So, Josh, in a lot of areas, I would tell you we are just getting started." — Heidi G. Petz (CEO·CHAIR)
service costs in SG&A
Q (John McNulty · BMO): He asked how much of the SG&A increase was inflationary service costs versus deliberate investments and how that will trend.
A: Management said a big chunk of SG&A growth is nonannualized Suvenil, which should drop after this quarter. Excluding Suvenil, higher employee service and benefits to support stronger sales drove costs; some merit increases also contribute. They said much of the remaining increase is cost to service higher sales.
"a big chunk of that is still the nonannualized Suvenil, and I am happy that this is the last quarter we have got to be calling that out every single time." — Benjamin E. Meisenzahl (CFO)
CBG volume trends and guidance
Q (Guggenheim Partners): He asked about CBG volume performance versus expectations and whether they see a path back to neutral or positive volume in 4Q.
A: Management said DIY volumes remain soft while Pro-Whoop (remodeler/flipper) is growing from a small base and they have invested behind pros. They said CBG full-year volume/price guidance remains consistent with July and they expect continued work to gain share among pros into 2027, but volume has been a challenge.
"If you look at the full year guidance, so you know, for what we have given for CBG and everything on the volume price front, you know, pretty consistent on a full year basis to what we provided back in, you know, in July." — Benjamin E. Meisenzahl (CFO)
Performance Coatings volume outlook
Q (Ghansham Panjabi · Baird): He asked if PCG's volume resilience will continue into 4Q and 2027 given the macro weakness.
A: Management said they expect the volume strength to continue and pointed to record high new business wins as a positive pipeline indicator. They view the pipeline health as very positive and expect continued volume growth in PCG.
"We do expect that to continue, and I think, ultimately, the barometer of strength is our is our, you know, successful, I would tell you, record high new business wins that we are seeing on the PCG side." — Heidi G. Petz (CEO·CHAIR)
M&A interest
Q (John Roberts · Mizuho): He asked about M&A opportunities such as Liquid Nails and Akzo's refinish business.
A: Management said they will actively look at assets that fit their strategy and can accelerate it, but they will not overpay. They will ‘kick tires’ on assets mentioned and take a hard look if the asset fits and offers value.
"As we always do, we will take an active look at assets that fit within our strategy and accelerate our strategy." — Heidi G. Petz (CEO·CHAIR)
components of the 11% COGS rise
Q (Duffy Fischer · Goldman Sachs): He asked which cost items rose more than 10% to drive unit COGS up about 10% and how much was unexpected.
A: Management said about 30% of the COGS increase was related to Suvenil; excluding it, COGS rose at the low end of high single digits. They pointed to strong sales volume, higher raw material and supply chain costs, and mix as drivers, and said timing of price realization matters.
"A big part of that increase in COGS is related to Suvinil, about roughly 30% of that." — Benjamin E. Meisenzahl (CFO)
protective & marine breakdown
Q (Kevin McCarthy · Vertical): He asked to unpack marine versus protective strength and how much runway remains after a difficult comp into 2027.
A: Management did not provide an answer in the transcript for this question.
Emerald Symmetry traction
Q (Mike Harrison · Seaport Research Partners): He asked how Emerald Symmetry adoption is tracking versus expectations and versus past ultra-premium launches.
A: Management said they are very pleased with Symmetry's launch and adoption and called it their best product with superior performance and sustainability (zero VOC, plant-based). They said premium products help contractors save labor time, improving customer productivity and fitting strategy.
"We are very pleased, Mike, with how the how Symmetry has not only launched, but the adoption" — Heidi G. Petz (CEO·CHAIR)
refinish share shift
Q (Wells Fargo): She asked where the refinish share shift is occurring and what caused it.
A: Management said it is a single, isolated share shift not a broader share loss and called it temporary. They said they are confident they can demonstrate their value proposition and earn the business back.
"I would tell you it is share shift, not share loss." — Heidi G. Petz (CEO·CHAIR)
Pro-Whoop vs stores overlap
Q (Eric Bosshard · Cleveland): He asked how the selling proposition for Pro-Whoop pros blurs with what stores do.
A: Management explained Pro-Whoop serves pros who buy largely only paint but prefer a home-center environment for multi-trade needs; stores serve pros who prefer specialty paint store service. They said Pro-Whoop is complementary and partnerships with big home centers are strategic for reaching that contractor segment.
"They are preferring a specialty paint store model with the level of service that the Pro-Whoop paints, is a very complimentary segment that we just are not set up in our specialty distribution model because this contractor is looking for you know, everything else, in terms of house flipping from you know, lumber and electrical to plumbing and everything." — Heidi G. Petz (CEO·CHAIR)
can margins improve without volume
Q (Matt Dale · BofA): He asked if normalized contribution margins on volume are possible next year given price already announced and cost actions, even if volumes stay muted.
A: Management said they assume volume inflection is needed and that volume is the number one driver of operating margin. They emphasized continued pricing discipline and cost actions, and reiterated confidence in midterm targets while noting operating in an inflationary environment.
"We have said that volume is number 1 driver of our operating margin." — Benjamin E. Meisenzahl (CFO)
working capital and cash flow drivers
Q (Patrick Cunningham · Citi): He asked what drove the working capital and operating cash flow pressure in Q3 and the impact on 4Q cash outlook.
A: Management said net operating cash was lower in part due to timing and prior year deferred tax accrual phasing but year-to-date net operating cash is up almost 10%. They said higher working capital reflects Suvenil annualization and, excluding Suvenil, working capital is only slightly higher; they expressed no concern about cash management.
"Net operating cash maybe was a little bit lower than what you saw last year." — Benjamin E. Meisenzahl (CFO)