Hearth & Home October 2016

2016 August Business Climate


August Sales

In early September Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare August 2016 sales to August 2015. The accompanying charts and selected comments are from the 198 useable returns.


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Weather Report

Consumer Confidence

Stock Watch


RETAILER SALES – U.S. AND CANADA
August 2016 vs. August 2015

In August, 40 percent of Spa retailers said they were up over the prior year, while only 19 percent of Patio retailers said the same thing.


13 MONTH YEAR-OVER-YEAR RETAILER SALES
August 2015 Through August 2016

In August, both Barbecue and Spa sales were up five percent at retail, while Hearth products were down one percent from the prior year, and Patio products were down seven percent.


Retailer Comments

Northeast

Connecticut: (Hearth) “Our August sales are down like the rest of the year. Traffic has picked up some but we’re just not sure what to expect this year. Glad we are at least starting the season. Tough summer.”

Maine: (Hearth, Patio, BBQ) “Record high temperatures through August caused a pause in sales. We expect this is temporary as September is off to a good start.”

Maine: (Hearth) “We need old man winter!”

New Hampshire: (Patio) “Sales were up in June, July, and August due to a beautiful sunny summer. We feel it’s a combination of 17 years in business and an improving economy. We foresee continued strong sales through fall, especially if the Democrats sweep the elections!”

New Jersey: (Hearth, BBQ) “Bring on the snow!”

New Jersey: (Hearth, Patio, BBQ) “Incredible spike. Best August ever. Very busy with hearth and finishes.”

New York: (BBQ, Spas) “Traffic still consistent through August resulting in a nice increase in hot tub sales.”

New York: (Hearth) “Business is steady, seeing lots of interest. Still a dead day now and then.”

New York: (Hearth) “Hot August in the Northeast and our sales were down again. If our early orders are to be believed, we’re in for a busy fall and winter season.”

New York: (Hearth BBQ) “Waiting for colder temps.”

Pennsylvania: (Hearth) “Gas fireplaces up 145 percent. Coal, pellet and gas stoves are down.”

Pennsylvania: (Hearth, Patio, BBQ) “Pellet stoves will not sell until fuel (oil) prices go up.”


Weather Report

For the following weather charts, the numbers for each state reflect the temperature ranking for the period since records began in 1895.

Eight states – MA, RI, CN, NY, NJ, PA, MD & DE – set a record for the Warmest month of August since record-keeping began in 1895.

Three states – RI, CN & CA – set a record for the Warmest three-month period of June, July and August, and 20 posted Much Above Average temperatures for that period.

Wouldn’t ya know it? One state experienced the Record Wettest month of August, and it had to be poor, suffering Louisiana.

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South

Arkansas: (Hearth) “Pitiful month and year. It’s our worst performance in 20 years. Nothing has helped us all year.”

Mississippi: (Patio) “Very slow selling season.”

Oklahoma: (Hearth) “July sales not so good when it’s 103 degrees!”

Tennessee: (Hearth, BBQ) “The only good thing I can say about August is – it’s over! Very slow month, everything down. Come on cooler weather and bring some confidence back to the economy.”

Texas: (Hearth, Patio, BBQ) “Feels like an election year! Doesn’t matter who you pull for, people are hesitating. Nice tickets, just need more. Drought in July, record rains in what is normally the super-dry month of August. Nothing is normal! Traffic sucks, more phone and email Internet-type of sales.”

Texas: (Hearth, Patio, BBQ) “July as in June saw a great jump in sales, as summer is in full swing. Saw an increase in requests for Outdoor Living spaces from simple to extravagant.”

Midwest

Iowa: (Hearth, BBQ) “From January 1 through July 31 we were up roughly five percent over our best year. Then August showed up and hearth sales tanked by 67 percent without any clear reason why. Being in business can be a confusing experience at times.”

Michigan: (Hearth, Spas) “August was pretty flat, temps up 2.4 degrees, great for swimming pool business, horrible for hearth products.”

Michigan: (Patio, BBQ) “Patio furniture sales have been steady, and surprisingly, customers are still opting for special orders. Grill sales have plummeted since our main brand opened another dealer 12 miles away. We are strongly considering changing to a brand that is more loyal to their brick and mortar dealers in order to maintain some type of territory.”

Michigan: (Spas) “We did the same dollars as last year but all in small ticket sales. Incredibly hot weather; a great economy means a lot of focus on vacations; a screwy back to school with half of the population going back two weeks early. The dynamic duo running for president.

“We believe all this had an impact on business. So far 2016 has been a banner year. We hope politics doesn’t screw up our fall business. We’re thinking September and October may be a little rocky on the sales floor.”

Ohio: (Hearth, BBQ) “We got nothing. No foot traffic. No quotes. No phones ringing. No rhyme or reason to it. Thank God the Old Farmer’s Almanac is predicting a bad winter for our area. Whether it’s right or not, it drives in hearth customers.”

Ohio: (Hearth, BBQ) “The stove and grill market in the Toledo area are bad. Several shops are on the verge of closure.”

Wisconsin: (Hearth) “Hot weather made a huge impact on our retail traffic. We do a lot of remodel vs. new construction.”

Wisconsin: (Hearth, BBQ) “Still struggling to get through the storm-ravaged areas in order to get to our previously booked jobs. Because of the massive storm damages, we have lots of work booked for the future. Sales should be back to normal in August.”


Consumer Confidence

The Consumer Confidence Index, which had decreased slightly in July, increased in August. The Index now stands at 101.1 (1985=100), compared to 96.7 in July.

“Consumer confidence improved in August to its highest level in nearly a year, after a marginal decline in July,” said Lynn Franco, director of Economic Indicators at The Conference Board. “Consumers’ assessment of both current business and labor market conditions was considerably more favorable than last month.”

A reading above 90 indicates the economy is on solid footing; above 100 signals strong growth. The Index is based on a probability-design random sample conducted for The Conference Board by The Nielsen Company.

The Index is based on a probability-design random sample conducted for The Conference Board by The Nielsen Company.

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West

California: (Hearth, Patio, BBQ, Spas) “August was great. Lots of enthusiasm on the sales floor, and customers were seeking bargains. It all worked well.”

California: (Hearth, Patio, BBQ) “August started out very slowly. It’s been very warm here in the Southern California desert and that usually leads to folks staying home. The latter part of August was a welcome surprise with sales surging to record levels. It made our summer!”

California: (Hearth, Patio, BBQ, Spas) “Busy, busy, busy; we are already booking a month out. Looks like a good year.”

Colorado: (Hearth, BBQ) “Cool nights and rain helps bring customers in, and we have been very busy. Sales are up about 25-30 percent. Customers are making quicker decisions and spending more. We’re feeling good!”

Colorado: (Hearth, Patio, BBQ) “Builder sales and new construction have increased in relation to the Denver housing market.”

Washington: (Hearth, Patio, BBQ, Spas) “Even with last year.”

Canada

British Columbia: (Hearth, Patio, BBQ, Spas) “Cooler than normal weather kept patio and barbecue sales down. Decent month overall, down slightly from a record August in 2015.”

British Columbia: (Hearth) “People are not going ahead unless there are incentives.”

Ontario: (Patio) “Exchange rate – U.S/Canadian currency still tough to deal with.”

Ontario: (Hearth, Patio, BBQ) “July sales were like our rainfall, 30 days with no rain/30 days of 30 degree Celsius. First time we have ever closed shop for a 12-day holiday. We put the new plan into action August 1 and have an increase in sales of 30 percent over last August; we’re booked well into late September, without discounting one item and increasing our service rates by 15 percent over last year!

“Don’t even ask how, because this time I’m not sharing. But I will tell you that we will never discount, at best only on special occasions. Kudos to the economic genius I talked to at the HHT meeting in Montreal. It’s about time someone let the bean counters speak in public. Regardless of all the talk about oil prices and speculated temperatures, the recession is over, everybody had a break last year. Should that mean they have more expendable income? Let’s go get ’em boys! Take no prisoners and show no quarter – 16/17 is going to be a banner season!”

Ontario: (Hearth, Patio, BBQ) “The U.S dollar is still hurting our bottom line with our patio furniture! Our very hot summer didn’t help.”

Ontario: (Hearth, Patio) “August not as strong but still had growth.”

Ontario: (Hearth, Patio, BBQ) “Worst August in six years.”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 29-Jul-16 26-Aug-16 4 WEEK 26 WEEK 52 WEEK ($000,000)
HNI Corporation (a) HNI 56.96 28.94 52.13 54.90 5.3% 63.2% 19.3% $2,470.0
Pool Corporation (b) POOL 102.86 68.78 102.28 101.33 -0.9% 23.8% 48.0% $4,200.0
Rentech (b)(e) RTK 7.73 1.55 2.56 3.56 39.1% 80.7% -49.4%     $86.7
Restoration Hardware Holdings (a) RH 106.49 24.75 30.81 32.59 5.8% -19.4% -64.5% $1,380.0
Wayfair, Inc. (a) W 50.00 28.85 43.50 38.99 -10.4% -5.6% -7.7% $3,300.0

(a) = New York Stock Exchange
(b) = NASDAQ
(e) = Rentech is the parent company of New England Wood Pellet.

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More Industry Data

2016 July Business Climate

In early August Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare July 2016 sales to July 2015. The accompanying charts and selected comments are from the 212 useable returns.

» Continue

2016 June Business Climate

In early July, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare June 2016 sales to June 2015. The accompanying charts and selected comments are from the 198 useable returns.

» Continue

2016 May Business Climate

In early June, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare May 2016 sales to May 2015. The accompanying charts and selected comments are from the 234 useable returns.

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