Sherwin-Williams (SHW) said Mexico’s Federal Competition Commission rejected the paint maker’s planned $2.34 billion deal to buy Consorcio Comex of Mexico, and the company is now reviewing the 3-2 decision.

“We are disappointed by this decision, but remain hopeful that we can adequately address the commission's objections and proceed with the transaction,” Chief Executive Christopher M. Connor said in a statement.

Also on Thursday, Sherwin-Williams reported a 13% increase in second-quarter earnings amid better sales at its paint stores, while its outlook for the current period came in well below Wall Street expectations.

Shares tumbled 6.65% to $171.00 early Thursday afternoon. As of Wednesday’s close, the stock was up 19% on the year.

Sherwin-Williams, which makes Dutch Boy, Minwax and other products, has reported sales growth for more than two years, thanks to a retail business that was bolstered by a stronger housing market. In November, the company agreed to acquire Consorcio Comex of Mexico, which makes paints and other coatings that are sold in the U.S., Canada and Latin America.

For the latest period, Sherwin-Williams saw a profit of $257.3 million, compared to $227.8 million in the year-ago period. On a per-share basis, earnings checked in at $2.46 versus $2.17. The second quarter included a charge of eight cents a share related to a government import duty assessment.

Sales grew 5.5% to $2.71 billion.

The company forecasted in April that its per-share earnings would fall between $2.50 and $2.60, while sales would increase 5% to 9%.

Gross margin widened to 45.5% from 44.7%.

Sales in the company’s paint-stores group increased 8% to $1.61 billion, and same-store sales improved 7%.

The global-finishes group recorded sales growth of 3% to $513.5 million. Consumer-group sales fell 1% to $393.7 million.

The company said it expects third-quarter earnings of $2.55 to $2.65 a share on a sales growth of 6% to 9%. Meanwhile, analysts were looking for a much brighter outlook for earnings of $2.80 a share and sales growth of 22%.

Sherwin-Williams did back its full-year guidance of $7.45 to $7.55 a share.

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