Good morning. Thank you for joining The Sherwin-Williams Company's review of second quarter 2021 results and our outlook for the third quarter and full year of 2021. With us on today's call are John Morikis, Chairman, President, and CEO, Allen Mistysyn, CFO, Jane Cronin, Senior Vice President, Corporate Controller, and Jim R. Jaye, Senior Vice President, Investor Relations and Communications. This conference call is being webcast simultaneously in listen-only mode by Issuer Direct via the Internet at www.sherwin.com. An archived replay of this webcast will be available at www.sherwin.com beginning approximately two hours after this conference call concludes. This conference call will include certain forward-looking statements as defined under U.S. federal securities laws with respect to sales, earnings, and other matters. Any forward-looking statement speaks only as of the date on which such statement is made, and the company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. A full declaration regarding forward-looking statements is provided in the company's earnings release transmitted earlier this morning. After the company's prepared remarks, we will open this session to questions. I will now turn the call over to Jim Jaye. Thank you, good morning, everyone. Sherwin-Williams delivered very solid results in the second quarter. We continued to operate in a very dynamic environment where demand was robust across the majority of our business, raw material inflation remained persistently high, and the effects of Winter Storm Uri continued to have an impact on the entire industry supply chain and product inventories. Amid these challenges, we raised our sales expectations at our June 8th Analyst Day, and we delivered on those targets. Our gross margins were under considerable pressure in the quarter, given the sustained higher raw material costs. However, as we have demonstrated in past inflationary cycles, we are fully committed to offsetting these costs, and we announced additional pricing actions in the quarter, which will be realized as the year goes on. Despite the near-term gross margin compression, adjusted diluted net income per share in the quarter grew by a double-digit percentage, and EBITDA expanded by a high single-digit percentage. Let me briefly summarize the quarterly numbers. All comparisons in our prepared commentary this morning are to the second quarter of 2020, unless otherwise specified. Starting with the top line, second quarter 2021 consolidated sales increased 16.9% to $5.38 billion. This is the single largest revenue quarter in the company's history. Supply chain constraints negatively impacted sales by approximately three and a half percentage points, split evenly between The Americas Group and the Consumer Brands Group. Consolidated gross margin decreased 320 basis points to 44.8%, driven by raw material cost inflation outpacing our price increases near-term and a return to a more normal mix. Gross margin increased 10 basis points compared to the second quarter of 2019. SG&A expense as a percent of sales decreased 130 basis points to 26.7%. Consolidated profit before tax increased $71.8 million or 9.6% to $819.2 million. The second quarters of 2021 and 2020 included $78 million and $75.1 million of acquisition-related depreciation and amortization expense, respectively. Excluding these items, consolidated profit before tax increased 9.1% to $897.2 million. Diluted net income per share in the quarter increased to $2.42 per share from $2.16 per share a year ago. The second quarters of 2021 and 2020 included acquisition-related depreciation and amortization expense of $0.23 per share and $0.21 per share, respectively. Excluding these items, second quarter adjusted diluted earnings per share increased 11.8% to $2.65 per share from $2.37 per share. EBITDA grew to $1.05 billion in the quarter, or 19.5% of sales. Net operating cash grew to $1.2 billion in the first six months of 2021, an increase of 11.8% compared to the same period in 2020. Looking at our operating segments, sales came in much as we anticipated, with very strong growth in our pro architectural and industrial businesses and, as expected, a historically more normal DIY. Segment margin was under pressure in all three segments, primarily due to significantly higher year-over-year raw material costs. Our additional price increases, which are still being implemented, were not enough in the near term to offset the higher material costs. Sales in The Americas Group grew 22.6%. Segment margin decreased 30 basis points to 23.5%. As operating leverage from the higher volume and selling price increases were offset by the higher raw material costs. Sales in the Consumer Brands Group decreased 25.4%, including four percentage points related to the Wattyl divestiture. Adjusted segment margin decreased 680 basis points to 19.7% of sales, resulting primarily from lower sales volume and gross margin pressure related to higher raw material costs, partially offset by selling price increases and good cost control. Sales in the Performance Coatings Group exceeded our expectations and increased 41.3%. Adjusted segment margin decreased 60 basis points to 13% of sales, as operating leverage from the higher volume and selling price increases were offset by higher raw material costs. Let me now turn the call over to John Morikis for additional commentary on the second quarter and our first half, along with our guidance for the third quarter and full year 2021. John? Thank you, Jim, good morning, everyone. Let me begin by framing my comments with some key themes. First, demand is very strong across the majority of our business, and we are aggressively pursuing growth opportunities. two, while industry supply chain constraints are continuing to impact production and sales, nobody has more assets and capabilities than Sherwin-Williams to keep their customers in paint and on the job. Three, we are aggressively combating raw material inflation with significant price actions across each of our businesses. We will continue to do so as necessary. Last, we've seen this movie before. There's no better or more experienced team in the industry to manage through the current environment. We remain extremely confident we will emerge from these current challenges a stronger company with stronger customer relationships and with continued strong value creation for our shareholders. My deep thanks goes to all 61,000 members of our team who are doing an amazing job in some pretty challenging circumstances right now. Jim did a nice job of framing up the second quarter at a high level, and in a moment, I'll get into some additional color for each of our segments. First, I'd like to make a comment on our first half. Given the impact of the pandemic on our results in the second quarter a year ago, 2021 first-half consolidated sales increased 14.7%, or $1.29 billion. Adjusted PBT increased 23.5%, or $303.3 million. Adjusted PBT margin was up 120 basis points to 15.9% of sales. Adjusted diluted net income was $4.71 per share, an increase of 26.6%. This is a very strong performance, especially in light of the much higher than anticipated raw material inflation we've seen and the supply chain challenges we've described. Returning to segment performance in the quarter. In The Americas Group, second quarter sales increased 22.6%. The impact of unfavorable currency translation was not material. Same-store sales in the U.S. and Canada were up 19.3%. We generated strong double-digit growth across all of our pro end markets in TAG in the second quarter. Residential repaint, TAG's largest business, was the fastest-growing, and we expect this momentum to continue. Contractors are reporting solid backlogs, and interior and exterior work were both strong. Our commercial business was the next fastest-growing and is gaining momentum as we expected. Projects continue to resume at varying paces, and comparisons are favorable over the remainder of the year. Property maintenance is also gaining momentum. Apartment turns, a return to travel and office, and a favorable comparison all contributed to our growth. We expect to see continuing improvements as the year progresses. New residential remained another area of strength for us. New housing permits and starts have been trending very well since last summer, customers are reporting solid order rates. We're also encouraged by growth in our Protective and Marine business. We saw a return to growth with oil and gas customers and continued strength in flooring, bridge and highway, and pharmaceutical applications. Finally, as expected, our DIY business was down significantly after five consecutive quarters of double-digit growth. Notably, all TAG architectural businesses delivered growth over the second quarter of 2019. From a product perspective, sales in both interior and exterior paint were up by double-digit%, with interior being the larger part of the mix. Additionally, this is the 4th consecutive quarter spray equipment sales increased by double digits. This continues to be a very healthy sign of recovery as contractors typically invest in this type of equipment in anticipation of solid demand. We realized nearly 2.5% of price in the second quarter resulting from our February 1 price increase. Given the persistent raw material inflation we are experiencing, TAG announced an additional 7% price increase last month that will be effective August 1st. We would expect the combination of these February and August price increases to result in a mid-single-digit% of price in the third quarter, and better than that in the fourth quarter, putting our full-year price realization for TAG in the mid-single-digit range. We will continue to evaluate additional pricing actions as needed. We opened 23 net new stores in the quarter and have opened 34 net new stores year to date. Along with these new stores, we continue to make investments in sales reps, management trainees, innovative new products, e-commerce, and productivity-enhancing services to drive additional growth. To provide a fuller picture of how this business is performing, I'll close out my TAG discussion with a few comments on the first half. Sales were up 15.9% versus the H1 of 2020, and segment margin is up 110 basis points to 21.6% of sales. The metric we pay very close attention to is the number of new accounts, which are up nearly 30% in the first half. This is a clear indicator of terrific opportunities ahead. On a two-year stack basis, sales are up 14% compared to the H1 of 2019, or an average of 7% annually, well above market growth. Segment margin expanded 240 basis points over the same two-year period. Moving on to our Consumer Brands Group. Sales decreased 25% in the quarter, including a positive impact of 1.5 percentage points related to currency translation and a negative impact of four percentage points related to the Wattyl divestiture. Pricing was positive. As expected, our DIY business returned to more normal levels driven by consumers returning to work and difficult comparisons to the prior year. We're encouraged by growth in our European and Asia Pacific businesses, which were both up double digits in the quarter, and in our Pros Who Paint category, though these areas of strength were not enough to offset lower North America DIY demand. While it was a challenging quarter for sure, it's constructive to look at this business over the first half, given the unusual DIY dynamics related to the pandemic over the past year. Adjusting for the divestiture of Wattyl, the business is only down low single digits compared to the H1 of 2020. Encouragingly, the H1 of 2021 is up mid-single digits compared to the H1 of 2019, and adjusted segment margin is up 180 basis points over the same period. We think the comparison to the H1 of 2019 better indicates the progress we're making in growing this business and improving its performance. As you know, our global supply chain organization is managed within this segment. This team continues to do incredible work in navigating the industry-wide raw material supply chain disruptions caused by Winter Storm Uri. We are working collaboratively across our business to support our customers and keep them painting. Last, let me comment on second quarter trends in Performance Coatings Group. The industrial recovery appears to be in full swing. The momentum we've seen since the third quarter of 2020 continued and accelerated in the year's second quarter. Group sales increased by more than 40%, including a currency translation tailwind of 6% in the quarter. Price was positive. All regions and all divisions generated growth. Regionally, sales in the quarter grew fastest in Europe, followed by Latin America, Asia Pacific, and North America. Every division in the group grew by a strong double-digit percentage, driven by robust underlying demand, new customer wins, share of wallet gains, and favorable comparisons to last year's second quarter. I'll start with the Industrial Wood Coatings, which again had the highest growth rate in the group. This is the third consecutive quarter of double-digit growth in this business. Sales were positive in every region. New residential construction continues to drive robust demand for our products in kitchen cabinetry, flooring, and furniture applications. General Industrial, the largest division of the group, posted its second consecutive quarter of double-digit growth. Sales were positive in every region. Our customers are reporting the growth they are seeing is being driven by true end market demand rather than temporary inventory restocking. Sales were strong across our customer segments, including heavy equipment, building products, containers, and general finishing. Automotive Refinish sales increased by a strong double-digit percentage. Miles driven and collision shop volume remained below pre-pandemic levels. New installations of our products and systems in North America remained very strong. This is a good indicator of further momentum in our business. Our Coil Coatings business remains a consistent performer. Sales grew by a strong double-digit% and were positive in all regions. This team continues to do an excellent job at winning new accounts in all regions. Construction and appliances led the growth. Our packaging team generated double-digit growth against a high single-digit comparison last year. Sales were positive in every region. Demand for food and beverage cans remains robust. Our non-BPA coatings continue to gain traction with existing and new customers. As I did in the other two segments, let me speak to Performance Coatings' first half performance, where sales were up 26.4% versus the H1 of 2020. Adjusted segment profit increased $81.3 million, or 25.7%. Adjusted segment margin was basically flat, which is encouraging given that this group has seen the highest level of raw material inflation in the company year to date. On a two-year stack basis, PCG H1 2021 sales were up 15% compared to the H1 of 2019. For an average of 7.5% annually. Again, well above market growth. Adjusted segment margin is down just 40 basis points over the same two-year period. Encouraging performance, given this business has faced the most significant raw material inflation year to date. Before moving on to our outlook, let me speak to capital allocation year to date. We have returned a little over $1.9 billion to our shareholders in the form of dividends and share buybacks. We've invested $1.6 billion to purchase 6.4 million shares at an average price of $257.12. We distributed $297.7 million in dividends, an increase of 21.2%. We also invested $151.4 million in our business through capital expenditures, including approximately $17 million for our Building Our Future project. We ended the quarter with a debt to adjusted EBITDA ratio of 2.4x. Turning to our outlook, we expect robust demand in all North American Pro architectural end markets to continue through the second half, though comparisons become more challenging, and continued tightness in the supply chain will remain a headwind. We expect DIY demand to continue to moderate as consumers return to work, and comparisons will remain challenging into 2022. We expect industrial demand will remain strong over the rest of the year. As we described last quarter, we've been highly proactive in managing the supply chain disruptions to provide product to our customers. We expect to be in a make and ship mode until the seasonally slower fourth quarter, when we expect to begin building inventory. We see the current challenges as an opportunity to drive even greater engagement with our customers. We're leveraging all of our assets, including our store platform, our fleet, our distribution centers, and more to let us come up with unique and creative customer solutions that others simply can't. On the cost side of the equation, raw material inflation has not moderated, driven by continued supply chain issues and surging demand. As a result, we are raising our raw material inflation expectations to be in the mid-teens for the year, an increase from our previous range. We anticipate year-over-year inflation in the third quarter to be higher than it was in the second quarter, with only slight improvement in the fourth quarter as demand remains high. We continue to have great confidence we will offset these higher costs with the incremental price increases we announced in all businesses during the second quarter. We are prepared to implement additional increases should they be necessary. We recognize the timing of price realization will continue to put pressure on margins in the near term. Over the longer term, we expect margin expansion. Against this backdrop, we anticipate third quarter 2021 consolidated net sales will be up by mid to high single-digit percentage compared to the third quarter of 2020. We expect The Americas Group sales to be up by a mid- to high single-digit percentage, with Pro sales at or above the high end of this range and DIY sales returning to a more historic level. We expect Consumer Brand sales to be down by a mid- to high teens percentage, including a negative impact of approximately five percentage points related to the Wattyl divestiture. We expect Performance Coatings sales to be up by a high teens to low 20%. We expect raw material availability to continue to improve throughout the quarter. Embedded in our guidance is a slightly smaller impact from raw material availability than we experienced in the second quarter. For the full year 2021, we expect consolidated net sales to be up by a high single- to low double-digit percentage. We expect The Americas Group to be up by a low double-digit to mid-teens percentage. Consumer Brands Group to be down by a mid-to-high single-digit percentage, including a negative impact of approximately four percentage points related to the Wattyl divestiture. Performance Coatings Group to be up by a low 20%. We expect diluted net income per share for 2021 to be in the range of $8.01-$8.31 per share, compared to $7.36 per share earned in 2020. Full year 2021 earnings per share guidance includes acquisition-related amortization expense of $0.80 per share and a loss on the Wattyl divestiture of $0.34 per share. On an adjusted basis, we expect full year 2021 earnings per share of $9.15-$9.45, an increase of 13.6% at the midpoint over the $8.19 we delivered in 2020. Let me close with some additional data points that may be helpful for modeling purposes. We expect to see slightly more gross margin contraction in our second half compared to our first half due to higher raw material costs, product and customer mix returning to more normal levels, and a more difficult comparison year-over-year, partially offset by additional selling price increases implemented across all of our businesses in the second half of the year. We expect to see some contraction in full year gross margin, given the lag between pricing realization and the rapid and greater-than-expected increase in raw material costs. As we capture price and inflation abates, we expect to see gross margin recover and then expand over time, just as it has in previous cycles. We expect to see some contraction in our second half operating margin due to the contraction in gross margin, partially offset by leverage on SG&A due to the strong sales growth. We expect our full-year adjusted operating margin to be approximately flat with 2020, with a nice improvement compared to 2019. The level of operating margin performance compared to last year will depend on where in the range our consolidated sales perform and where raw materials trend through the second half of the year. We will continue making investments across the enterprise that will enhance our ability to provide differentiated solutions to our customers. We expect to return to our normal cadence with around 80 new stores opening in the U.S. and Canada in 2021. We'll also be focused on sales reps, capacity and productivity improvements, systems, and product innovation. We also plan additional incremental investments in our digital platform and the home center channel. These investments are embedded in our full-year guidance. We expect foreign currency exchange to be a tailwind of approximately 2% for the full year. We expect our 2021 effective tax rate to be in the low 20% range. We expect full-year depreciation to be approximately $280 million and amortization to be approximately $310 million. The CapEx and interest expense guidance we provided last quarter remains unchanged. We have $24 million of long-term debt due in 2021. We expect to increase the annual dividend per share by 23.5% per share for the full year. We expect to continue making opportunistic share repurchases. We'll also continue to evaluate acquisitions that fit our strategy. We delivered an excellent first half, and despite considerable supply chain and inflationary headwinds, we are maintaining our previous full-year guidance and expect to deliver another very strong year. We remain highly focused on providing solutions to our customers. That concludes our prepared remarks. With that, I'd like to thank you for joining us this morning, and we'll be happy to take your questions. Thank you. At this time, we'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Thank you, and our first question comes from the line of Ghansham Panjabi with Baird. Please proceed with your questions. Thank you. Good morning, everybody. Morning, Ghansham. Morning. Revision higher for 2021 sales, specific to TAG versus your most recent guidance. Can you just take us through which end markets are driving that incremental upside? I know you also said that raw material prices are not moderating, but have they started to stabilize, or is that not the case at this point? Hey, Ghansham, let me take a swipe at the first part of your question, and I'll ask Allen to talk about the second. It's going to be an easy swipe across the first piece, because across the TAG business, if I understand your question, which segments are going to be driving that business, it's every one of our professional segments. We've got great confidence in the demand that we see in that business. We spoke last couple of quarters about our expectations as it relates to DIY, that they would likely revert back to the mean or the norm, and that from a market perspective, that we would be in a terrific position to be able to capitalize on the business as it started to shift into these pro segments. We didn't expect it'd be perfectly smooth, just waving in from one to another. In fact, these pro businesses are showing terrific demand, and we're excited to be in the position to be able to capitalize on those. We think the controlled distribution model that we have, we think the reps that we have, and even in these challenging times with some of the supply chain issues, that we're working closer with our customers and developing a level of loyalty that we've not seen before. Before throwing it to Al, I'll add just a couple of comments as to why I made those statements regarding the relationship with our customers. We stay very close to our customers, and right now we've just gotten some terrific feedback on the research as it relates to our loyalty with our customers. As it speaks to the pro business, we've set records during these challenging times with our contractors highlighting our ability to respond and work with them during these challenging issues. The fact that our reps and managers are there with them, close to the customer, has allowed us to be responsive to them, keep them in paint predominantly better than anyone else. That, combined with the demand, we feel, is going to position us to really come through this and exit this stronger than we are today. Ghansham, this is Allen. On the raw material basket side, we are now saying that our third quarter is going to be the highest year-over-year, coming into the second quarter. We thought the second quarter would be higher year-over-year. A slight moderation there. We also think the fourth quarter, we should see some moderation in raw materials. The costs are higher in industrial, but significant across all of our businesses, that is why we were out with price increases across all businesses. We announced an August 1st 7% price increase in TAG, but we're out across all our businesses and all our regions to recoup this significant raw material inflation. As you recall, we're going to see some short-term contraction in gross margin, but as pricing catches up with those raw material increases, we'll start to see a recovery, and then as raw materials moderate, we'll start getting a gross margin expansion going forward. Okay, perfect. Thanks so much. Thanks, Ghansham. Our next question comes from the line of Jeffrey Zekauskas with JPMorgan. Please proceed with your question. Thanks very much. Morning, Jeff. Hi, good morning. I presume that there were raw material shortages that you endured in the quarter. Do you have an estimate of perhaps your lost sales because you didn't have sufficient raw materials? When you think about your lost sales, how would you allocate it among the groups? Yeah, Jeff. On a consolidated basis, we think the raw material shortages were a headwind of about 3.4% on the consolidated. That was split pretty evenly between our TAG and our Consumer Brands segments. There was an immaterial impact on our Performance Coatings segment. Thank you for that. In consumer brands, is that the area where your price raw material capture is likely to be slowest? Jeffrey, I think across consumer, we have a lot of different categories and businesses. I would say that the team has implemented pricing across all those categories. Their price effectiveness is similar to where we're at in TAG. There are more pricing to come to offset the additional raw material basket increases that we're seeing. I'd say, Jeff, that from our perspective, our actions are right in line. In fact, our customers' response is pretty much in line with what we've expected. We've always said that we don't try to run for the perfect quarter. We're working with our customers on both the TAG Consumer, well, and even the PCG side on how these price increases roll in. We will get the price increase, and our goal is to do that in a way that allows us to retain the customers. To do that, we work with them, but we have absolute confidence in our ability to do both of those, to put the price in and keep the customers. Yeah. The only other comment I would make on that, Jeff, is on the lag. I think if you look at the operating margin comparison versus last year, it's very difficult because of just the very high volume strength we saw in the second quarter. If you look at the first half, our first half in consumer, our operating margin was still up almost 180 basis points versus the H1 of 2019. I think because of the way the year rolled out, I think a better comparison would be to the H1 of 2019, and we've maintained that margin on a 3.5% sales increase in the H1 versus H1 2019. Okay, thank you so much. Thank you, Jeff. Our next question is coming from the line of John McNulty with BMO Capital Markets. Please proceed with your question. Thanks for taking my question. When we think about the various buckets for raw materials, whether it's resin or TiO2 or packaging or what have you, I guess as you look forward, are there ones where you expect to see relief, and can you speak to ones that you think they're going to be sticky here for a while? Can you help us to think about that? Yeah, sure, John. When we look at the basket, what we saw in the second quarter was really the inflation was being driven by higher costs for monomer, resin, solvents, and packaging materials. As John mentioned, the inflation was highest in the Performance Coatings Group, given their greater exposure to that side. We did guide here that we think the third quarter is going to be the highest year-over-year raw material inflation and only modest relief maybe in the fourth quarter. I think a lot of those that I just mentioned are going to remain sticky. I'd say on the TiO2 side, that's been largely stable for the most part, a little bit of inflation, but that's not where we're seeing the pressure. It's going to continue to be a challenging environment on the raws, but as John mentioned and Allen mentioned in their remarks, we're very committed on this pricing initiatives that we have. We've been very aggressive. We're out across the businesses. We feel very good about our ability to offset those dollars during the year. Yeah, I think if you look at historically where we've seen going back in time where the industry took a little bit of a delay in 2016 and the experience that we gained there, we've got a lot of leadership in this company that's been through that experience as well as others. The determination that we have to stay ahead of that, I think is visible right now with the performance in our operating margins in Performance Coatings reflecting the already aggressive actions that have taken place to offset that. We're very committed to this. We're going to stay very focused, and we believe we'll stay ahead of the pricing here. Got it. Fair enough. Maybe just as a follow-up, on the supply chain issues where either you lost some business or couldn't meet the needs, or some of your competitors have, I guess how should we think about the potential for share change? Is this something where you see it as temporary lost business or gained business, or is this something where it could be a little bit stickier? I guess how should we be thinking about that as we look forward? I think you should look at it as we're going to win share gain during this time. There might've been some transactions, some projects, or some element of a project that we might have lost. As I mentioned just briefly, or a moment ago, our research is indicating the way in which we're handling this. Maybe I'll talk just briefly about that. The transparency in which we're working with our customers, the responsiveness that we're working with our customers. There have been, as Al mentioned, a little bit of a challenge in dealing with some of these customers, but we have great confidence in how we're responding and how we're dealing with our customers, that lead us to believe in the customer sat scores that we're getting from our customers, really indicate the fact that the way we're handling this is allowing us to come out of this with greater stickiness. The new account growth that we're experiencing right now, it's a record year-to-date performance in new account activity. We're stepping into this with customers. While we're opening new accounts with them, we're getting them at this point to try new products. That trial in itself down the road will lead to more projects with those customers. I've got great confidence that as we come out of this, you're going to see that same coiled spring that we've exited other challenging times uncoil, and we're going to accelerate that. You can see that not only in what I've talked about in the research, but as our competitors continue to close stores and close territories, and we continue to invest in a number of areas, we're going to take advantage of this market. We actually, as difficult as these times are, these are the best times for our company. We expect to come out of this stronger. Great. Thanks very much for the color. Our next question comes from the line of Bob Koort with Goldman Sachs. Please proceed with your questions. Thank you. Good morning. Good morning. John, I was hoping you could help us figure out the math to get that mid-teens inflation cover. Can you tell us what your raw materials are as a% of your total COGS? Yeah, Bob, raw materials are about 80%-85% of our paint COGS. It would tell you we need to get about a 50% price increase, 50% of the raw material increase, to cover the dollars. My expectation is that we will cover the raw material increases dollar for dollar in the full year. A little bit behind in the first half, catch it up in the second half, but full year, we'll offset raw material increase dollar for dollar. Maybe dovetailing on John's question, I would guess, as the largest paint company certainly in North America, were you able to leverage preferential supply relationships so you had better availability, do you think, than your competitors? Well, we work closely with our suppliers. I think the approach that we're taking here is that many of them are in unique situations as well. We clearly have worked with our suppliers to put ourselves in a position to leverage our supply chain, working with them in a way that can accelerate our ability to serve our customers. On the one front, from incoming raw materials, we're working closely with them. We're unique in the fact that we have our own fleet of vehicles. We have 860 tractors and 2,100 trailers that we use to expedite once received these raw materials into our plants. In many cases right now, right from our plants to customer projects. It's the entire supply chain, Bob, that we're working on to expedite, cut out as many days as possible, and to serve our customers. That transparency as we communicate to our customers is exactly why I mentioned earlier, we know that we're going to come out of this with share gains. Hey, Bob, the only other thing I would add to that is really utilizing our global scale, our footprint, our global relationships to look for additional supply opportunities because we're investing capital to have an additional 50 million gallons of capacity coming online over the next few quarters. Where the demand environment is, it's well above where our initial forecast for raw material supply would be coming into the season. As we can get additional raw materials, we'll convert those raw materials faster, and as we come out of the third quarter into the fourth quarter, you can expect we'll be building inventory and going into the first quarter, also building additional inventory to get ready for the next selling season in 2022. Great. Thanks for the help. Thanks, Bob. The next question will be coming from the line of Truman Patterson with Wolfe Research. Please proceed with your questions. Hey, good morning, everyone. Thanks for taking my questions. Good morning. First on Performance Coatings, you all suggested that raw material inflation will be heaviest in this segment. Could you just help us gauge the magnitude of inflation in PCG versus your mid-teens company inflation guidance? Specifically in Performance Coatings, I know you're taking pricing actions, but when do you expect to get kind of price cost neutral on a dollar basis in that segment? Yeah, Truman. We talked about mid-teens. Our industrial businesses, depending on the business, would be in the high teens, maybe low 20s, and then seeing some moderation in the fourth quarter. To talk about the price cost dynamic, I think it's important to look at. The first half operating margin because it's a little bit of a goofy year last year. I think the team has done a tremendous job maintaining their first half operating margin in a significantly higher raw material cost environment in the first half, and it's the highest in the company, as we talked about. They're working well with their customers to keep up with the strong demand while having to implement the selling price increases to offset that raw material inflation. When you look at our first half adjusted operating margin, it's down just 10 basis points to the first half last year and down just 40 basis points to the H1 of 2019. You put this in perspective, if you go back to 2016-2018 in a raw material inflationary environment that wasn't as significant as we're experiencing today, and our industrial operating margins declined significantly from 2016-2018 on a pro forma basis, including a full year of Valspar and Sherwin-Williams. As we saw selling prices increase, and they caught up raw material inflation and raw materials moderated, we finally started seeing operating margin expansion in 2019. I think what's important, and you asked this question at our Financial Community Presentation, and Justin answered it the right way. We have been more aggressive in getting price into the market faster and at a higher pace than as we've seen this raw material inflation. We are getting leverage on a stronger volume. Along with our continuous improvement mindset and other actions that we're going to be taking, it gives us great confidence in getting to the high teens to low 20s as we come out of this raw material inflation environment. How long this inflation lasts will dictate somewhat how long it's going to take us to get back our operating margins. We are in a much better position today than we were a few years ago. Okay. Thanks for that. On the Consumer Brands Group, especially in North America, I'm just hoping you can help us work through some of the moving parts there. The supply chain constraints, which are impacting sales. You all had the divestiture. It seems like the pro side of the business is healthy in North America consumer. Trying to understand how core DIY demand trended through the quarter and how it plays into your full-year guide. It seems like at least the deceleration in DIY should start to improve as we move through the quarter. Just trying to understand some of the moving parts there. Yeah. Truman, let me just comment that we expected DIY would return to more normal levels as the year progressed. We were very confident in that other segments, particularly in TAG within commercial and property maintenance, would more than offset that slowdown. Yeah, we took our Consumer Brands Group full-year sales guidance down just to the mid- to high-teens while taking The Americas Group up from low double-digits to mid-teens. You're absolutely right. When you look at the comparison year-over-year, our second and third quarters are going to be the toughest. Our fourth quarter is going to get slightly better. I think it's important to look at it from an architectural market perspective. I think if you look at the combined architectural business, we expected the first half to be up low double digits, and we were right there with our consumer and TAG businesses. We said we expected our second half to be up mid to high single digits versus last year. With our TAG and CBG sales guidance for the full year, second half is in that range. From an architectural perspective, we believe we've positioned the company strategically to take advantage of the different shifts in the market to position us to capitalize on those shifts. Plus, you look at the return to growth industrial, we're just really excited about our full-year sales guidance to be up high single digits to low double digit in a really turbulent market. Okay. Thank you guys for the time, and good luck in the upcoming quarter. Thank you, Truman. Our next question is coming from the line of Arun Viswanathan with RBC Capital Markets. Please proceed with your questions. Great. Thanks for taking my question. Yeah, impressive results, I guess, in the face of the raw material inflation. I wanted to ask about overall market growth. You continue to do really well in resi repaint, and it's setting you up for, as you just noted, kind of high singles to low double digits in TAG. I guess next year you will be facing a tougher comp there. You'll be facing potentially a slightly more achievable comp in DIY and consumer and performance as well. How are you thinking about kind of ongoing sales growth in your business? Are we still kind of thinking that Sherwin is in a position to grow 1.5 to 2x the market in TAG, and then maybe performance is more in line with kind of industrial production, and then consumer kind of settles back into kind of 3% to 4% DIY kind of range? How are you thinking about the different segments as far as growth, kind of on a more midterm basis? Yeah, Arun, let me take a quick swipe here, and then I'll throw it to Jim to give you some macro numbers. I would say that we absolutely agree with the projected growth rates to continue to exceed the market. I'll remind you used res repaint as the tip of the spear in your conversation. We've had now five consecutive years of double-digit growth in residential repaint. We don't see that slowing down. In fact, our expectations of Heidi and our TAG organization is to continue to accelerate that growth. We're making, we believe, some terrific investments in that business, stores, reps, products, our digital platform, a number of areas there that we continue to invest. Yes, in the face of adversity in some cases, but as I mentioned earlier, that's what we believe helps us to accelerate during these challenging times, particularly given some of the moves of our competitors. We're excited about the growth opportunities there to accelerate, and maybe I'll throw it to Jim to just talk about some of the macro numbers across the business. When I look at the professional segments inside our TAG business, we're excited about each one of those. Before Jim kicks off, you also mentioned the PCG side. We have very high expectations for Justin T. Binns and his team. We've got some really good momentum there. Our focus here, we believe, is unique. We try to bring differentiated products and solutions to our customers, and we believe that the combination of the Valspar, Sherwin technology portfolio is really starting to allow us to harvest some of the great work both companies had done individually in a way that's very unique, and that's clearly visible throughout the different segments. Particularly if you look at automotive as an example, where we know that we're beating the market with the combined technology that the two companies have brought together. The idea of consumer reverting back into the low single digits is probably a good model number to use. We absolutely believe that our TAG and PCG businesses will be outpacing the market. Yeah. To John's point about residential repaint, you think about that, we'll remind you again that while it's our largest segment in TAG, it's also the space where we have the most opportunity to gain share. We feel really good about residential repaint. I think if you look at some of the market data that's out there, it's very supportive. For example, existing home sales continue to be very strong. We look at the leading indicator remodeling activity. That's accelerating into 2022. The Remodeling Market Index is all-time highs right now. Resi repaint, no reason for us to think that that's not going to continue to be strong. On the new residential side, you're hearing news about labor and materials being a little bit of a governor, but I think that could have the effect of extending that cycle. If you just look at the raw numbers on starts, they're still up very significantly year-over-year, both on single-family and multi-family. You've got historically flattish mortgage rates and consumer confidence still strong and household formations that we always talk about. On the new resi side, very good. Commercial, just touching on that for a second, that was our second fastest growing market in the quarter. As we've come out of COVID, vaccines are in place, people returning to work. Commercial has a lot of momentum right now, and you're seeing other indicators like the Architectural Billing Index, for example, that are very supportive. We feel very good there. Even property management, as people returning to travel, returning to offices, was up very nicely in the quarter. Then maybe to close out with the industrial business, we look at a lot of different indicators. As you know, there's a lot of different divisions in that segment, but the manufacturing, the PMI is up in every region. We feel very good about that, and we've often said, in regions outside of the U.S., our opportunities are huge for market share gains. We feel very good about continuing to outgrow the market in TAG and in our PCG business. As we've said, consumer's probably going to start to return to a more normal segment. I would add, even on the consumer side, we are committed. We believe that we can help our customers outperform the market. While it might revert back more into a normalized run rate, we want, and will be working and investing with our customers to help them outpace that market. We believe that we've aligned ourselves very well with our customers. They share that desire to continue to grow market share, and we're investing in that business and believe that we can help them outpace the market as well. Okay, thanks for that. Just as a quick follow-up, maybe I could ask on the capital deployment side. It sounds like you've completed some buyback activity, but that's still going to be your main use of cash. Is that accurate outside of your internal investments? I.e., is the M&A environment still showing very high valuations that are not attractive? Maybe you can just comment on your uses of cash from here. Yeah, Arun, I think we've been very consistent in our capital allocation policy. John talked about the strong cash generation the first half and the return of $1.9 billion to our shareholders in dividends and buybacks. I think I want to make the point that we don't need to make acquisitions. I talked about this on our Financial Community Presentation. You look at our growth from 2000. 2019 and 2020, we've averaged, that's a 2.3% compounded average growth rate or $800 million, and we grew adjusted PBT $640 million, 77% flow through our operating margins up strong. I would say, we don't have a gun to our head. We'll continue to look for opportunities for M&A, and that fits our strategy. I think it's important to note that we'll continue to invest in our long-term organic growth opportunities and I think that's a great way to deploy cash. We talked about the architectural capacity improvements. We have packaging capacity increases coming and others. I think we get more leverage on the organic growth than just purely M&A. Absent M&A, we will buy our stock back in the second half. Yeah, I think that's a great response, and I also do want to put a little color on the M&A strategy that Al referred to. While we don't feel as though we have a gun to our head, we do think that there are opportunities out there, and we think that there are several deals that we're working on that could be completed this year. They're going to be disciplined deals that we can bring value to our shareholders. We're not trying to be everything to everyone everywhere. We're looking proactively for targets that, as Al mentioned, fit our strategy, and those would be areas that would fill necessary geographic gaps. We're not just throwing a dart at a map here, trying to figure out where we're not. It could bring technology that can be leveraged across the platform, or could fill a void of other types to help us serve our customers. We absolutely believe that there are M&A targets out there that are a good fit, that we can get at the proper value and fairness to the sellers and to our shareholders. Meanwhile, we don't feel as though we're out there just trying to buy a book of business so that we could demonstrate growth. We have growth opportunities, and we're actively pursuing those organically. Thanks a lot. Thank you. Thanks, Arun. Our next question comes from the line of Duffy Fischer with Barclays. Please proceed with your questions. Yeah, good morning, fellas. Hey, Duffy. First question is just around raw materials, and this spike's a little bit different than just a straight supply demand tightening with the freeze and COVID. Is this doing anything to change your strategy on how you want to source raw materials, either integrating upstream more yourself to do more of the resins, diversifying producers, diversifying geographies? Should we expect to see any meaningful change structurally on that side? Duffy, we have a terrific and experienced team in both procurement and in technical, as well as our supply chain. As you would expect with veterans that have 25+ years of experience, we're looking at a lot of things differently. I don't know that that's anything that we want to talk about right now. I don't think structurally you have to be concerned from a capital standpoint that we're changing the model of the business, but that you should expect, and our customers should expect us to be thinking about how to protect them going forward. We'll be taking those necessary steps. I don't think that on a public call like this, we want to define what those steps are. Fair enough. Can you talk about both your ability and your customers' ability to attract new talent to hire people as we're growing into this, and then what you're seeing on labor inflation? Yeah, I'd say we have seen a slight uptick in some wage areas, some pressure. Where we feel that pressure, we're taking the steps to secure what we believe to be our most important resource, our people. I'll remind you that we have a terrific turnover rate, between 7% and 8% on average. We recruit and hire the right talent. We train them, we give them the resources to win, then they become the reason for our success. We're very proud of our team. As a result of that and the fact that they have success and a career path, our people tend to stay. In fact, over a third of our employees have 10 or more years with the company. We think that's very important. While we're making some adjustments where necessary, we believe that they are the right investments to make. We do believe that as a result of this retention, we're able to respond with experienced employees that can serve their customers. As far as the materiality of the moves that we're making to respond to this pressure, I don't think it's material in the sense from a modeling perspective. We are taking the steps necessary and in some cases, making the financial moves to recruit and retain the talent that we need. Great. Thanks, guys. Thank you, Duffy. The next question comes from the line of Michael Sison with Wells Fargo. Please proceed with your questions. Hey, guys. It sounds like the price of the paint can is going to be a lot higher this year and maybe the highest it's ever been. Just curious, given how high the inflationary environment has been, if raw materials do fall, it sounds like you feel pretty good that you'll keep that pricing level and margins could expand really exponentially versus what we've seen historically. Any worries that the price of the paint can could cause some demand destruction given I know it's not the biggest part of a paint project, but just any thoughts there? You know, Mike, I think what's important to remember is that the COGS or the cost of the paint in a total project is a relatively small percentage. 80%-85% of the painter's cost is in their labor. We're moving and developing innovative products to help them offset that labor cost. While many of them are able to hire and secure the talent that they need, many are bringing on new unskilled people and training them. So the cost of a good gallon of paint that can help them produce a nice finished product that their customers will enjoy, overall, is a relatively small percentage of their cost of goods. They are responding, I think, favorably to higher quality products. Just a moment ago, I talked about our labor and our willingness to hire, recruit, and retain that talent, and in some cases, paying a little bit more. We have to consider that as well as our labor, as well as our customers. That we look at that cost of the retention that I just described, and that gets factored into all the pricing decisions that we make. Our painting contractors are doing the same, we're trying to offset some of their costs, the painters, with higher efficient projects through quality of products. While we're trying to do the same to our customers, as we're experiencing some labor cost increases, we're trying to offset that with efficiencies in our plant and our stores to minimize the impact of labor on the price increases that we're out there seeking. Mike, we do believe we're in a similar environment that we were facing in 2010 through 2012, where we had to implement six price increases in a 22-month period to offset the significant raw material increases. We continued to invest in our long-term growth opportunities, adding 160+ new stores, adding over 260 reps in our North America Paint stores over that three-year period, as well as other customer solutions. We did see the benefit in top line and bottom line as raw materials moderated from 2010 through 2016. North America Paint stores grew volume high single digits, which was a multiple of the market. TAG segment operating margin grew over almost 700 basis points. On a consolidated basis, we grew by a high single-digit percentage and EBITDA margin increased almost 500 basis points. We expect to see similar types of results as we come out of this, but I think the key there is we continue to invest. We're willing to accept a little less leverage on SG&A, including in our second half this year. I think it's important that we show our customers that in good and difficult times, we're investing in their business to make them successful. Great. Thank you. Mike, I'm absolutely shocked that your first question wasn't about the Guardian name. You let me down there. Thanks for your call. Thanks, Mike. Our next question's coming from the line of David Begleiter with Deutsche Bank. Please proceed with your question. Thank you. John, on that last question, if you go back to that 2010, 2012 time period, did you retain the entirety of those price increases when raws started coming off? I'd say we retained the majority of them, David. As our customer base, especially you look at our largest segment, I'll use as an example, residential repaint, cost of a gallon of paint is 10% of their costs. Once they get those costs into their bids, they can pass that on. Especially, as John talked about, moving customers up to higher quality products. We do see a trend when we're in an inflationary environment that customers move to a higher quality product to get the benefits of the efficiencies, which far outweighs the cost of that gallon of paint, even when you compare it to what they were using previously to the current product. We do expect to retain a majority of the price, not just in architectural, but also in the industrial side of our business. I think an important metric that we track closely is our ability to help our customers make more money. In that process, our entire focus, when you look at the investments that we're making, the services that we're providing, every gauge that we have, every research that we do, it always ends up with, are we helping you make more money? It's an important metric in our decision making. Understood. Just on the price impact in the back half of the year, I think you gave us the expectation for TAG, but what are you expecting or how should we look at Consumer Brands and Performance Coatings price mix expectations in the back half of the year? As we've talked about, David, it's a little harder to kind of look at the different businesses because even within the different categories within consumer. Let me rephrase it this way. You'd expect to see a similar range within consumer and a higher range in PCG just because of the raw material basket being higher on our industrial businesses. It's just timing on industrial. As you know, TAG is more uniformed in timing-wise when they go out with price, whereas our industrial businesses by business, by region, are staggered across. Different timelines, but you could expect to see a higher cadence for our industrial businesses in the second half. Got it. Thank you very much. Thank you, David. The next question is coming from the line of Steve Byrne from Bank of America. Please proceed with your question. Yes, thank you. Unlike some of your peers, when this inflationary environment really started to escalate, you made the decision to basically send a message to your pro contractors that you weren't going to raise price for a few months. Was that decision to drive loyalty, being that many of them had already won contracts and had a price assumption in those contracts and so forth? Was that part of that decision? If so, do you think that it was successful? Do you think that you gained market share among that pro contractor customer base because of that decision? Yes, with great certainty, I would do that 100% of the time. I'd do it again tomorrow. If we have to in the future, we'd likely take the same approach. Our loyalty and our ability to even execute the effective price increase with our customers increases dramatically as a result of that. Without question. John, you also made a comment earlier about backlog from your contractors was robust. Do you quantify that? Do you have data that would compare that backlog today versus, say, where it was a couple of years ago? Is it meaningfully different? We do. We have a CRM system that we use, proprietarily built, and we do keep an eye on that. It is a very strong period in backlog, and we're not going to share any more detail on the specifics, but I speak with great confidence in the backlog. Thank you. You bet. Our next question is coming from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your questions. Thank you. John, in your prepared remarks, you made a comment that new account activity is up nearly 30% in the first half of the year. Can you elaborate on that? How does that compare to long-term historical averages, for example? Is there any way to translate that record level of new account activity into what it might mean for future volumes or future share gains, for example? I'll give you a little color. We're not going to get into any specifics on the metrics conversion, but I would tell you that it is a very high number in comparison. I would say that our teams, our TAG leadership, all the way through to those that are closest to our customers, are doing a fantastic job. One of the questions has to be, how are you doing this given some of the shortages in raw materials? The fact is that we've been very open with our approach compared to our competitors. We were out early with transparency. I think many of our competitors were in denial. At first, some of our competitors were asking, "Well, no one else is telling me that." In fact, some of them said it might be a week or two. We were out very truthful with our customers as to what we expected. I give our procurement team and our supply chain team great credit for the courage that it took to come into this boardroom that we're in today and explain how this was going to fall out, and how quickly our commercial teams took that to the market, face-to-face with our customers, with full transparency to help them run their business. The reason that I say that and why I think that's important is that while many of our competitors were in this denial, and may have felt that they were going to be at a competitive advantage for whatever reason, ultimately, from a customer's perspective, they lost credibility. Our teams now are out talking to customers who may in the past have had loyalty that kept them from using other suppliers. Suddenly, the phone's getting answered, and we're helping our people to be in front of those customers that offer that terrific opportunity. Now, as I mentioned, right now, we might be just simply in the trial mode because the supply chain issues are real, and we're taking care of our existing customers with great focus, and we're able to talk to these new customers about the alternate supply and the importance of that and getting them to try product. In some cases, it's simply in the back of our own stores. In some cases, it's one room on a project. We know with great certainty that this is the most important step in the process, and this trial is an exciting step, and we look forward to greater conversion going forward. Earlier I was asked, do we feel as though we're going to come out of this with market share gains? I hope everyone heard the confidence in which I answered that, because I've got terrific respect for our leadership team and all the way down to the part-timers that are in our store, that are in front of these customers introducing new products and new solutions that are going to help these customers make more money, and we're determined to do just that. Thank you for that. My second question relates to Performance Coatings. If we look across the major categories there, packaging, wood, coil, refinish, General Industrial, et cetera. Can you give us a sense for which of those businesses have grown the most versus pre-pandemic levels, and which might remain the most depressed, such that you have more potential for rebound going forward? That's a really interesting question. The way I might answer that is that we see terrific growth in all of them. If I may, I could just spin through those quickly. In the packaging business, we do believe that the unique technology that we've brought to market will help us to continue to grow. Al mentioned the CapEx that we're putting into this business. We are investing along with our customers in additional capacity, and we think that our V70 is a very unique product. It's a product with plug-and-play performance that's easily adopted onto existing can-making equipment and helps our customers with speed. The efficiency of the application is terrific. It gives great flavor protection to products, both food and beverage, and it's really the next generation of the non-BPA technology. I'm taking packaging first and getting into a little bit more depth because, while it's easy to talk to that model, it's the same model that we're using in every segment to help differentiate our teams from our competitors. When you look at GI as an example, or industrial wood, we're looking at not only the technology, but the supply chain. How do we take the time that it takes to get product and whittle that down to what might have been weeks into days, and instead of thousands of gallons of required orders to 50 gallons or 100 gallons to put them in business faster with less working capital. Our coil businesses are doing a fantastic job of introducing technology and speed. Our automotive, I talked earlier about the combined technologies between the Sherwin and the Valspar technology that's helping throughput with each of their customers to be able to be more productive. In our protective and marine business, to get assets back in play faster. When you ask that question, quite honestly, it's hard to answer which offers the greatest opportunities. If Justin T. Binns was in the room with me right now, I'd look him in the eye, and I'd tell him I have expectations for every 1 of those businesses to grow and grow excessively, and at the expense of our competitors. That's what I would tell him. Thank you very much. Thanks, Kevin. Our next question is from the line of P.J. Juvekar with Citigroup. Please proceed with your question. Yes. Hi. Good morning. Or good afternoon, I should say. Hey, P.J. I'm looking at the industrial businesses so far of two of your competitors, and their margins were much lower. Your margins kind of held up. I'm sure you're presumably impacted by the same shortages of raw materials like epoxies and isocyanates. Is your impact likely to be delayed into 3Q, or are there other factors that offset your raw material impact? I'll start and maybe turn it to Allen if I miss anything. I think part of it is mix of business. We've been very selective in our strategy on what we pursue. We pursue businesses that are interested in coatings and solutions that will help them make more money, not necessarily just commodities. You're not going to see us in areas where it's just that, commodities. We've actually walked away from some of those businesses, and we've focused on areas that are more high value. We often talk about bridge and highway. You're going to see us on the high-value bridge area, as an example, as opposed to other areas that are just low-margin commodities. I think that plays an important part in the alignment, and our approach is just that. We want to be partners with our customers, help them to be more successful. In return, they understand that our ability to serve them and make them successful comes at a cost to us and our shareholders, and we share in that reward. Allen, anything else you'd like to add to that? The only thing I would say, P.J., is we would expect to see sequential improvement in our Performance Coatings segment operating margin through the second half. Even though we're going to go up against a tougher comp second half versus the first half, still we're seeing strong volume as our sales return to what I would say are more consistent or normal levels quarter to quarter. Our full year sales guidance of up low 20% implies a back half in the high teens. We talk about the third quarter being up high teens to low 20s. It's about a strong volume getting leverage on SG&A, but it's also the commitment that this team has made to getting price into the market timely and aggressively to offset that raw material inflation. Like I said earlier, we learned a lot in 2016, 2017, 2018 that this team is now delivering on and executing from that learning. I think they're doing a great job. We're not going to revisit that. Allen, we're not going to revisit that. Great. My second question is, can you talk about your digital efforts that may have accelerated through the pandemic? How much of your contractor customers are ordering online and getting the paint delivered to the job site? Thank you. Yeah, I'd say that we're seeing strong utilization, and I would say an increase in all the metrics in the categories that we track. The platform, I'd say, is providing a service option that makes our pros more efficient in utilizing all our resources. Unlike others who might be trying a digital platform as the model, ours is unique in that it brings everything to bear. We want our customers utilizing our stores, our reps, and the platform, and we believe the model that we have is very unique in how it encapsulates all of that into one offering. We're not going to talk specifically about sales on the digital platform versus in the store or by phone or through the rep. Quite frankly, we don't discriminate against any of those orders. We'll take them all. We want them utilizing any resource, every platform that they feel is comfortable. What we're trying to do is make it easier for them. This digital platform will allow them access to their pricing, their projects, their orders, and they can conduct business with us 24/7 through the platform. If they prefer to come into the store and have a cup of coffee with their best friend behind the counter, we encourage that as well. Thank you. Thanks, P.J. Our next question is from the line of John Roberts with UBS. Please proceed with your questions. Thank you. John, on the Guardians, I don't think Cloverdale Paint uses the Guardian brand at all in Ohio. Maybe there's an opportunity there. Yeah, there might be. I don't know. We'll leave that to the Cleveland Guardians to go, John. That came from John Roberts, not John Morikis. Is it unusual in the June quarter for interior to be larger than exterior? Was that a mixed headwind in the quarter since exterior is typically more expensive than interior? No, John, I would say that mix returned to a more normal level. I think typically we start off interior to exterior maybe four to one in the out quarters, where the exterior and the Midwest and East are less prevalent. As you get to the two middle quarters, it trends to closer to three to one to two and a half to one. I think we ended the quarter closer to two and a half to one on volume. Okay. Trucking constraints were cited as a big headwind by some of your competitors. Were you able to use the trucking fleet in any different ways here to help mitigate the shortage of that? I know you pick up some of your raw materials that you distribute, but I don't know if you're able to pick up other raw materials and somehow mitigate freight as an issue. Yes, we were, and we plan to continue to use them as creatively as possible, just as we do every asset. John, this has given us an opportunity, and we have a terrific leader in Joe Sladek that runs our global supply chain, whose team has been really creative. It's not just the tractors and trailers, which is a great question that you're asking. We're using our distribution centers, our fat manufacturing, our stores, everything in a very unique fashion. Some of this has been on the fly, and we've continued to improve in our ability to do that. Again, we'll come out of this better as a result of it. We're learning a lot about our supply chain and our abilities to be able to leverage it, and we'll be better coming out of this as a result. Good, thank you. Nice quarter. Thanks, John. Our next question is coming from the line of Mike Harrison with Seaport Research Partners. Please proceed with your questions. Hi, good afternoon. Was wondering if we could talk about the consumer strength that you were seeing in Europe and Asia. Is that a product of DIY remaining stronger for longer in those regions, or were the comps easier? I also know that you've made some changes in your strategic approach to those international markets. Maybe comment on what you're seeing in terms of demand trends internationally in the consumer business. Mike, I did say that it's a little bit of everything. Certainly the region, particularly in China, if you look at the double-digit decline in 2000, largely related to COVID, it had an impact on us. I will point out that we did improve profits even in that kind of environment. In China, we continue to focus on the volume growth with the recovery, further defining our operating model in that region. We had a strong half in 2021. We're not going to give guidance by business, this is, as I've said before, an area that we're looking long term. I wouldn't suspect that next quarter this business is going to move the needle one way or the other. If you look next decade, it might. That's the way we're running this business. We have expectations for Brian Patten and his team to continue to really drive through the strategic decisions that we're making there. We're looking long term there. In Europe, I'd say we continue to build around our Kingfisher relationship. The team in Europe has delivered a double-digit increase in 2020, so comparisons are a little bit more challenging here in 2021. We did have a very strong start in 2021. We have terrific leaders here in Europe, one of whom we just brought to the U.S. to take a very important role for us. He did such a wonderful job there, and very strong leader. Again, speaks to the depth. We have a leader that's going to backfill him that's very strong as well. I think both of these businesses are relatively small in nature, but good opportunities for us and we're managing accordingly. All right. Thanks. I also wanted to ask about inventory levels at big box retailers. If we were able to look at the point of sale data, is that pretty similar to what you're seeing, in terms of the consumer business revenue decline? Are you seeing retailers still working to restock, or is there actually some de-stocking happening as the DIY demand is normalizing? Mike, I'd prefer that our customers talk to their plans as it relates to inventory. I will say that we're working hard and will be working hard through the balance of the year to continue to improve our ability to serve them. It's a very important focus of ours. Al mentioned the incremental investments that we've made to bring on about 50 million gallons of capacity. That certainly will help this business as well. As it relates to their inventory decisions and what they do, I don't know that that's appropriate for us to comment on. I would tell you that we're working hard to be able to continue to improve our position with them should they decide to pull in more inventory going forward. All right. Thanks very much. You bet. The next question is coming from the line of Vincent Andrews with Morgan Stanley. Please proceed with your questions. Hi, thanks. Just one point. In the past, you've talked about equipment sales in the stores business as a potential indicator of backlog. Is that trending in line with your expectations, or is any reflecting in that? Yes, it is. Double-digit growth. We think it speaks to the confidence that our painters have, so we're excited about it. Yep. Okay. Actually, just on any issues with any customers coming to you about labor availability this season, just kind of hearing that across the board, anything with painters? Yeah, I'd say labor continues to be a discussion in nearly every market that I've been in. As Jim mentioned in one of his responses, we feel as though that is serving as a bit of a governor. I'll point out that while labor is an issue, I believe every professional segment in TAG had a double-digit gain. They're finding a way to continue to grow, but it is an issue. Again, all of these challenges, all of this adversity, we don't ask for this adversity, but it does play to our advantage. It does allow us to serve our customers in a way that helps them through these challenges. If they run short on people or have to move from one project to another, any of that turmoil on the part of our customer plays right to the rep that's there working with that customer or the store manager locally that has the capability to serve that customer. Labor is an issue. It's one of many, and we try to work with our customers in a way that can help them make more money working through it. Appreciate it. Thanks very much. You bet, Vincent. Next question is from the line of Greg Melich with Evercore ISI. Please proceed with your questions. Hi, thanks. My question was on the comp sales trend. If you look at the acceleration, I think it was from 16% two-year to around 12% in the second quarter. Is that really all just the supply availability of raws? Was that the main reason for the deceleration? You're talking on TAG, Greg, correct? Yes, talking on TAG specifically. Yeah, the two-year stack. Yeah. I think part of it is we've had a tougher comp. If you look at the way our 2019 unfolded, we kind of had a better second quarter. When you look at the way we had 2020, we had headwinds in the second quarter. Yes, we talked about a 3.4% headwind in raw material availability in our second quarter that impacted us. It's kind of, I hate to use the term wonky, but the way that the two-year stack came out, it was kind of a little bit wonky. You look at the two-year, H1 2021 versus H1 2019, up 14%. Some prices to that, but be primarily volume. Got it. Maybe the follow-on to that is if we look at your guidance, it looks like you're expecting that two-year trend to re-accelerate, maybe not all the way back to 16, but get back a couple 100 basis points as in-stocks get better and as pricing goes through. Was that fair? Yeah. There's that, and I think if you looked at it on the pro segment, we'd even be a little bit better. Yeah, we expect to gain share. Got it. That's great. Thanks. Good luck, guys. You bet. Thanks, Greg. Next question is from the line of Adam Baumgarten with Zelman & Associates. Please proceed with your questions. Hey, thanks for taking my question. Just one quick one for me. Just if you look at your commercial business in TAG, can you maybe walk through some of the kind of end market verticals and what was strongest, what was maybe still struggling? That'd be helpful. Yeah, I'd say we're seeing strength in quite a few areas. The hospitality area, schools, tilt-up warehousing is really going well. I'm trying to think of areas that are really soft. Nothing comes to my mind, truly, in areas that are really soft. I'd say they're all growing in a lot of tilt-up, a lot of warehousing, a lot of expansion, medical, healthcare is expanding. Some just more than others. Adam, you good? Got it. Thanks, appreciate it. Yep. Our next question comes from the line of Garik Shmois with Loop Capital. Please proceed with your questions. Great. Thanks. Just one from me. Are you seeing any early signs of the impact of the Delta variant? Any change in how homeowners are inviting in contractors or pro painters? No. Our res repaint business is really hot, and we've not seen that at all. Thank you. You bet. Our next question is from the line of Eric Bosshard with Cleveland Research Company. Please proceed with your questions. Thank you. Two things. First of all, the two-year consumer growth improves in the second half, somewhat notably relative to the second quarter. What's different in the second half in that business? What was more of a drag in 2Q that doesn't persist to the second half? Yeah. Eric, I think, the raw material availability impacted us, when I said evenly, my 3.4% on consolidated pretty evenly on a dollar. It does impact consumer a little bit more. We'd expect to see a little bit better progress, or a little less headwind there. As they're chasing raw material cost pricing and higher pricing in their second half or so, our second quarter will be realized. I think what we expect as we bring more capacity on and we get more raw materials, we'll be able to supply our customers in a better fashion. Okay. Thank you. Then secondly, John, you talked about price leadership in stores, and great, not surprising to see that. The question is in regards to realization, seeing it's a unique period of inflation with raws, can there be a path to upside realization on these price increases relative to the historic amount of realization? Does the realization schedule look like it has in years past, even though it's a different period of time? Eric, it might. I'd say our approach to the pricing has been very well received by our customers, and the response that I said earlier about 100% of the times I would do this exactly as we rolled it out. It could, but there's also a lot of pressure in the market right now. What we're trying to do is put our teams in a position to be able to serve their customers to help facilitate that price effectiveness. We'll see. We're going to work hard at it, but I can't with 100% certainty tell you that I could project that number. I could tell you that we're working very hard to work with our customers to help them to be successful, and in turn, our shareholders are rewarded. That's our model. Great. Thank you. You bet. Our next question comes from the line of Kevin Hocevar with Northcoast Research. Please proceed with your questions. Hey, good afternoon, everybody. Al, I wanted to revisit, I think you had mentioned that you have an expectation of price cost to be neutral for the full year with tailwinds in the back half offsetting the headwinds in the first half. Given the inflation you're expecting in 3Q and kind of the timing of pricing phasing in, is the third quarter still a drag on that? Or do you expect that to get to neutral and with basically all the benefits coming in the fourth quarter, or how do you expect that to kind of phase in? I guess I just wanted to reconcile those comments with that. I believe you guys also mentioned that gross margins in the back half of the year. Do you expect those to be weaker than the front half? Why would that be given if price cost should be a nice tailwind in the front half versus a headwind? Sorry, nice tailwind in the back half versus a headwind in the front half. I think, Kevin, you will start getting on top of it in the third quarter. Not only the TAG price increase that was announced, but across all the businesses and segments, we'll start getting on top of it and then pick up more ground in the fourth quarter. The comparison gets much more difficult in our second half. You look at adjusted gross margin in our first half 2020 was 46.9%, and it grows to 47.8% in the second half. You have that headwind, and also you have our customer mix. As I talked about before, when we look at the combined architectural businesses, DIY starts returning to more normal levels. A question last year I answered, that was about 100 basis points impact on our last year numbers that we saw more so starting in the second quarter, but more so in the second half that as that returns to more normal, that'll be a headwind. That's why you don't see as much traction as you would think in our second half on gross margin. Okay. Got it. Makes sense. The sales that you mentioned that were lost to 3.5% in the quarter. Do you view those as deferred that could be made up in future periods, or do you view those more as being lost? Yeah, I believe they're deferred. I think the projects are there. John talked a lot about the demand and the strength we're seeing there across all the segments. I think the teams in the field are working very closely with their customers in moving products around, but I think that's deferred, not lost necessarily. Okay, thank you. Thanks, Kevin. Thank you. We've reached the end of our question and answer session. I'll turn the call over to John Morikis for closing remarks. Yeah. Thank you. First, let me just start by reminding everyone that Jim and Eric will be available for the rest of the day and tomorrow if you have some questions. I did ask for the opportunity to close out today's call just to pull out a couple of really important points, at least in my mind. First, that we're really proud of the terrific first half that we've had, but we're not complacent. This isn't an organization that pops corks over what's happened. We're more focused on what has to happen. We're determined to continue to get better, but we're really pleased with the first half. I want to thank our teams for the wonderful work that they're doing. We are in a strong market with terrific demand, and our goal is to outpace that demand in the market with growth that exceeds the market's position. We do believe we're positioned to capitalize on this demand wherever it presents itself. I mentioned earlier about the utilization of our assets, if it's our factories, our stores, our reps, our digital platform, the fleet that we talked about. We do believe we're uniquely positioned and very determined. We are experiencing these raw material cost increases from an industry-wide availability issue, and we think that this team of leaders that we have who've been experienced with similar cycles, it may have been natural disasters or financial crisis, COVID, whatever it might be now here with raw materials, that this seasoned and experienced team knows what to do and has the conviction to do it, and we're proud of them. All of this has us confident in our ability to come through this with greater market share, as I mentioned earlier, stronger relationships and a better position for future growth. We're excited. This is a challenging year, but we're excited about our position and our ability to leverage this challenging year into shareholder value and growth for our company, and a lot of determination to do it. Thank you all for your interest in our company. Know that we're out here determined to do better and convinced that we can. Thank you very much. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.