PPG's automotive refinish coatings organic sales rose by a mid-single-digit percentage in the third quarter of 2026 on gains in both pricing and volume, according to the company's Oct. 27 earnings release. Organic sales strip out currency swings, acquisitions, and divestitures.
The increase follows a double-digit percentage decline in refinish organic sales in the second quarter. In the company's July 28 second-quarter release, Chairman and CEO Tim Knavish said refinish organic sales were projected to grow by a low- to mid-single-digit percentage in the second half of 2026, citing the timing of customer orders in 2025.
Knavish said on the company's Oct. 28 earnings call that U.S. collision claims improved from a 6% year-over-year decline in the second quarter to a 4% decline in the third. He said the distributor destocking that weighed on refinish for four quarters is now behind the company.
Knavish said body shop activity remains below pre-pandemic levels
Asked by an analyst what drove refinish growth while claims were still falling, Knavish pointed to more normal distributor purchasing, a slight sequential improvement in body shop activity, and net body shop wins, which he said run at a couple hundred a month.
He said U.S. collision claims fell an average of about 10% each quarter in 2025 and that industry activity remains below 2019 levels. He also said high auto insurance rates, which he cited as another factor in 2025, have started to come down. Knavish said refinish came in somewhat better than PPG expected, though not by much.
Another analyst asked whether year-end rebate purchasing by distributors could be propping up refinish's stabilization. Knavish said distributors are independent businesses that control their own cash flow. Those close to a rebate threshold may buy heavily in the fourth quarter, he said, while others may hold off until the first quarter of 2027. He said that could add variability to the fourth quarter and that PPG built its best estimate into its guidance.
Refinish helped drive 8% organic growth in Performance Coatings
Net sales in the Performance Coatings segment, which includes automotive refinish, rose 10% to $1.55 billion, with organic sales up 8%. Segment EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 21% to $372 million, and segment EBITDA margin widened 220 basis points to 23.9%.
"We benefited from strong demand for our aerospace and protective and marine coatings products, as well as higher automotive refinish organic sales," Knavish said in the release.
For the fourth quarter, PPG expects Performance Coatings organic sales to grow by a low- to mid-single-digit percentage, with EBITDA margin expansion that the company attributed to pricing actions and stabilization in automotive refinish.
PPG raised the midpoint of its full-year guidance
Companywide net sales rose 7% to $4.35 billion. Adjusted earnings per share (EPS) increased 6% to $2.25, a third-quarter record. PPG narrowed its full-year adjusted EPS guidance to $7.90 to $8.10, which raised the midpoint. In its second-quarter release, the company had reaffirmed a range of $7.70 to $8.10.
Knavish said PPG's commercial actions fully offset cost-of-goods-sold inflation during the quarter. Chief Financial Officer Jamie Beggs said the company expects cost-of-goods-sold inflation in the high single digits in the fourth quarter.
Knavish characterized the refinish outlook as modest sequential normalization. The destocking is over and PPG is adding shops, he said, but end-user activity has yet to return to where it stood before the pandemic.
