VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
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Wednesday, December 31, 2025
The Sherwin-Williams Company
SHW · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
The Sherwin-Williams Company is a global paint and coatings producer with three reported segments: Paint Stores Group, Consumer Brands Group, and Performance Coatings Group. The core moat in Paint Stores is a dense company-operated store network that enables controlled distribution, high-touch contractor service, and premium brand positioning. Consumer Brands leverages a broad portfolio of well-known brands and scaled manufacturing/logistics, but faces meaningful retailer bargaining power and private-label pressure. Performance Coatings competes in global industrial and refinish coatings with service-enabled distribution, refinish-related switching costs dynamics in parts of the business, and selective compliance advantages (e.g., packaging coatings).
Primary segment
Paint Stores Group
Market structure
Quasi-Monopoly
Market share
69.4% (estimated)
HHI: —
Coverage
3 segments · 4 tags
Updated 2025-12-31
Segments
Paint Stores Group
Company-operated paint & coatings retail (architectural + related products)
Revenue
57.1%
Structure
Quasi-Monopoly
Pricing
strong
Share
69.4% (estimated)
Peers
Consumer Brands Group
Branded and private-label architectural paint & related DIY products sold via third-party retailers
Revenue
13.5%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Performance Coatings Group
Industrial coatings (protective, marine, coil, packaging, wood finishing, general industrial) and automotive refinish coatings
Revenue
29.4%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Moat Claims
Paint Stores Group
Company-operated paint & coatings retail (architectural + related products)
Revenue share and operating profit share are derived from FY2024 segment Net sales and segment Income before income taxes (excluding Administrative function) reported in the FY2024 Form 10-K.
Distribution Control
Supply
Distribution Control
Strength: 5/5 · Durability: durable · Confidence: 4/5 · 1 evidence
Dense, company-operated specialty store footprint enables direct control of shelf space, service standards, and local availability versus indirect channels.
Erosion risks
- Big-box and online channel encroachment
- Pro contractor consolidation increasing bargaining power
- Demand cyclicality tied to housing and remodel activity
Leading indicators
- Store count and net new stores
- Same-store sales growth in Paint Stores Group
- Gross margin resilience vs raw material volatility
Counterarguments
- Contractors can multi-source and switch based on promotions/credit terms
- Home centers can compete on convenience and price
Service Field Network
Supply
Service Field Network
Strength: 4/5 · Durability: durable · Confidence: 3/5 · 1 evidence
Localized sales reps, training, and digital tools reinforce contractor relationships and job-site support; complements store density.
Erosion risks
- Competitors matching service levels and digital ordering
- Labor availability/turnover impacting service quality
- Contractors optimizing procurement across multiple suppliers
Leading indicators
- Sales rep headcount and productivity
- Customer retention / repeat purchase metrics
- Digital order penetration
Counterarguments
- Service differentiation may narrow as tools become commoditized
- Large contractors may prioritize lowest total cost vs relationship
Brand Trust
Demand
Brand Trust
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 1 evidence
Brand portfolio and contractor trust support premium pricing and specification/repurchase behavior in architectural coatings.
Erosion risks
- Trade-down in weak macro environments
- Brand dilution from aggressive discounting
- Negative product quality events
Leading indicators
- Mix shift between premium vs value lines
- Average selling price trends
- Warranty/quality claim rates
Counterarguments
- End consumers can view paint as a commodity and choose cheaper alternatives
- Private labels can capture value-conscious demand
Consumer Brands Group
Branded and private-label architectural paint & related DIY products sold via third-party retailers
Revenue share and operating profit share are derived from FY2024 segment Net sales and segment Income before income taxes (excluding Administrative function) reported in the FY2024 Form 10-K.
Brand Trust
Demand
Brand Trust
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 1 evidence
Portfolio of recognized consumer brands supports shelf demand and reduces buyer uncertainty in DIY categories.
Erosion risks
- Retailer private-label expansion
- Shelf-space/planogram loss at key retailers
- Promotion intensity commoditizing the category
Leading indicators
- Share of shelf / distribution breadth at home centers
- Premium vs value mix within consumer brands
- Retailer contract renewals and exclusivity changes
Counterarguments
- Retailers can swap brands with limited end-user switching costs
- Retail concentration increases retailer leverage over pricing and terms
Scope Economies
Supply
Scope Economies
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 2 evidence
Broad portfolio + multi-region manufacturing/distribution platform enables shared R&D, production, and logistics across many SKUs and brands; vertical integration supports internal supply to Paint Stores.
Erosion risks
- Retailer margin pressure forcing manufacturer concessions
- Input cost spikes reducing manufacturing advantage
- SKU rationalization reducing scale benefits
Leading indicators
- Manufacturing utilization and cost per gallon
- Logistics service levels (fill rate, lead time)
- Intersegment transfer mix and gross margin
Counterarguments
- Large competitors can match scale and logistics
- Retailers can diversify suppliers to avoid dependence
Performance Coatings Group
Industrial coatings (protective, marine, coil, packaging, wood finishing, general industrial) and automotive refinish coatings
Revenue share and operating profit share are derived from FY2024 segment Net sales and segment Income before income taxes (excluding Administrative function) reported in the FY2024 Form 10-K.
Service Field Network
Supply
Service Field Network
Strength: 4/5 · Durability: medium · Confidence: 4/5 · 1 evidence
A hybrid distribution model (company-operated branches plus direct/outside sales) supports technical service, availability, and account coverage across industrial end markets.
Erosion risks
- Distributor disintermediation or consolidation
- Competitors expanding technical service coverage
- End-market cyclical demand reducing utilization
Leading indicators
- Branch count and productivity
- Customer retention in key subsegments (protective/marine, refinish)
- Win rate on new accounts in coil/packaging
Counterarguments
- Industrial customers can dual-source and rebid frequently
- Service and distribution can be replicated with investment
Switching Costs General
Demand
Switching Costs General
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 2 evidence
In automotive refinish, installed mixing/color systems, inventory, and technician familiarity can create meaningful switching costs and retention once a system is adopted (applies to the refinish sub-market within this segment).
Erosion risks
- Standardization of color systems reducing lock-in
- Distributors pushing price-based switching
- DIY repair trends reducing professional refinish volume
Leading indicators
- Refinish subsegment volume and retention at key distributors
- Installed base growth of mixing/color tools (where disclosed)
- Competitor promotions and distributor share shifts
Counterarguments
- Switching can still occur if a competitor subsidizes changeover
- Lock-in is submarket-specific and may not apply to all industrial coatings
Compliance Advantage
Legal
Compliance Advantage
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Regulatory-driven product conversions (e.g., packaging coatings) can advantage suppliers with compliant formulations and customer support capacity.
Erosion risks
- Competitors achieving similar compliant formulations
- Regulatory changes shifting requirements again
- Customer reformulation timelines delaying adoption
Leading indicators
- Packaging coatings growth and customer conversion wins
- Regulatory updates affecting can/packaging coatings
- Product approval / qualification milestones (where disclosed)
Counterarguments
- Compliance tends to become table-stakes once competitors catch up
- Customers can run qualification programs to add alternate suppliers
Evidence
Paint Stores Group consisted of 4,773 company-operated specialty paint stores in the United States, Canada and the Caribbean region at December 31, 2024.
Direct evidence of a large company-operated distribution footprint (controlled channel).
Our recent investments in sales reps, training and digital tools, coupled with home builder relationships are expected to drive above-market growth opportunities.
Supports the high-touch field sales/service model that can improve retention and share in pro channels.
Customer recognition of trademarks and trade names owned or licensed by the Company collectively contribute significantly to our sales.
Direct statement that brands/trade names materially support demand.
Their largest market share is in the Paint Stores industry, where they account for an estimated 69.4% of total industry revenue.
Used as the market share estimate for this segment's company-operated paint stores positioning.
The Consumer Brands Group manufactures and distributes a broad portfolio of branded and private-label ... to retailers, including home centers and hardware stores.
Supports breadth of portfolio and retailer distribution focus (scope benefits).
Showing 5 of 10 sources.
Risks & Indicators
Erosion risks
- Big-box and online channel encroachment
- Pro contractor consolidation increasing bargaining power
- Demand cyclicality tied to housing and remodel activity
- Competitors matching service levels and digital ordering
- Labor availability/turnover impacting service quality
- Contractors optimizing procurement across multiple suppliers
Leading indicators
- Store count and net new stores
- Same-store sales growth in Paint Stores Group
- Gross margin resilience vs raw material volatility
- Sales rep headcount and productivity
- Customer retention / repeat purchase metrics
- Digital order penetration
Curation & Accuracy
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