Hearth & Home May 2017

2017 March Business Climate


March Sales

In early April, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare March 2017 sales to March 2016. The accompanying charts and selected comments are from the 227 useable returns.


Quick Links

Weather Report

Consumer Confidence

Stock Watch


RETAILER SALES – U.S. AND CANADA
March 2017 vs. March 2016

In March, 46% of Hearth dealers were Up over the same period in 2016, followed closely by Spas with 38% of dealers telling us they were Up in that month.


13 MONTH YEAR-OVER-YEAR RETAILER SALES
March 2016 Through March 2017

In March, sales of Spas led the way with a 10% gain over the same month in 2016. Hearth products followed with a 7% gain.


Retailer Comments

Northeast

Connecticut: (Hearth) “Didn’t think it could get worse. Hoping the decent winter will bring sales in next fall. Very discouraging.”

Delaware: (Hearth, BBQ) “Remember, we are only a small barbecue dealer so this number is skewed. We went from one grill to zero this year, but we are a Platinum Plus Harman Stoves dealer. Worst sales in the 13 years I’ve been selling stoves.”

Maine: (Hearth, Patio, BBQ, Spas) “March is historically the leanest month of the year and that is the case this year. A busy real estate market is promising future stove and fireplace sales.”

Maryland: (Hearth, Patio, BBQ, Spas) “April is looking good. Year-to-date we’re up 30%.”

New Hampshire: (Hearth) “Lot of folks coming in with plans to build additions and homes; they’re actually thinking ahead! We also steer folks to our annual May sale. Traffic is good but sales are a bit flat. Based on the traffic, I anticipate a good spring for hearth sales.”

New Hampshire: (Hearth, Patio) “We had a noticeable surge of interest following the election results. Historically, early spring, being tax refund time, we would be very busy. This year it seems that refunds are much smaller than expected so we enter a very disappointing season. Not many cards left up our sleeve; not sure which way to stagger.”

New Jersey: (Hearth, Patio, BBQ) “March sales were very good. Finished up the first quarter with solid growth. Gas is king. Wood and pellet are way off.”

New York: (BBQ, Spas) “Consumer confidence plus preseason promotions with great financing options closed out the fantastic first quarter.”

New York: (Hearth, Patio, BBQ) “Stoves: gas – up, pellet – up, and wood – down.”

New York: (Hearth, Patio, BBQ, Spas) “Pellet and gas are both very strong. Pellet is strong due to the NYSERDA rebate program.”

New York: (Hearth, Patio, BBQ, Spas) “Everything is mainly the same. February was a better month.”

New York: (Hearth) “A cold March helped keep people coming through the door.”

Pennsylvania: (Hearth) “First quarter of 2017 was down 16% in gross sales, but still profitable. Better margin products are selling. Coal and pellet are dead!”

Pennsylvania: (Hearth, Patio) “We had some much needed cold weather here in Western Pennsylvania, which has our customers thinking of supplemental heat. Chimney repairs have us filled for the month of May.”

Pennsylvania: (Hearth, Patio, BBQ) “Floor traffic was very strong this month due to an increase in home remodeling. Weather is still strange – from the low 20s to the high 70s. At least the customers are beginning to talk about outdoor kitchens, outdoor fireplaces and casual fireside chat pits.”


Weather Report

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

In March, a blizzard and a few snowstorms pushed the New England and New York regions into Below Average temperatures, while New Mexico & Colorado posted Record Warmest temperatures.

With the exception of Washington and Oregon, the rest of the country was at Above Average and Much Above Average temperature levels, with six states – New Mexico, Texas, Oklahoma, Louisiana, South Carolina and Mississippi – setting a record for the warmest January – March period in 123 years.

In March, precipitation levels were Much Above Average in Oregon, Washington, and Idaho, while Florida and Georgia were at a Much Below Average level.

Back to top


South

North Carolina: (Patio) “Significant January and February gains were sapped by weak sales and traffic partially attributed to poor March weather.”

Tennessee: (Hearth) “It’s like October all over again.”

Texas: (Hearth, Patio, BBQ) “March weather was up and down. When dry and warm, sales were good, but when cold or wet, they slowed down. April has started strong. Our outdoor living contractors are telling us the same thing, but are getting more inquires now.”

Texas: (Hearth, BBQ) “There is a cocktail of the following: A mediocre group of products that do not completely hit the target market, bad product, poor manufacturer service to dealers, non-existent MAP (minimum advertised pricing) or pricing that allows for anemic margins, oversaturation of product availability, increased competition from too many manufacturers, retailers (both brick and mortar and online), lack of manufacturer loyalty to the point that I cannot fully market their product due to knife-in-the-back syndrome.”

Virginia: (Hearth, BBQ) “And just like that (business was) dead.”

Midwest

Iowa: (Hearth, BBQ) “We sold ONE!! Did not sell one last March!”

Indiana: (Patio, BBQ, Spas) “Horrible March weather started out well and ended wet and cold. Not much traffic in the store. Hoping it warms up and the sun comes out someday.”

Michigan: (Spas) “Another wacko month, crazy weather. Had a great sales month on big-ticket items. Every big-ticket sale is a powerhouse negotiation. Closing rate is still high but we are working deals. Small ticket sales are absolutely getting murdered by Internet (companies). We are volume buyers. How do you beat low price and no tax on your porch convenience? The absence of these buyers is starting to hurt gross dollar sales. Service remains incredibly strong at very, very profitable prices. So all-in-all pretty happy. Fighting every day.”

Michigan: (Hearth, Patio, BBQ) “Looks like a better year than last.”

Michigan: (Hearth, Patio) “With the Michigan wood stove change-out program we had a great month.”

Michigan: (Hearth, Spas) “Thank goodness for spas. Except for gas products, that is all that is going this early spring.”

Nebraska: (Hearth, Patio, BBQ) “Weird weather really changes the traffic week-to-week.”

Ohio: (Hearth, BBQ) “Sales were flat as the transition from hearth to grills took place. Still had a record first quarter for sales in one of our locations. Lots of work in the pipeline for hearth products. Consumers are confident and spending money. High-end, custom-home builders are setting up accounts with us. 2017 could be incredible if this keeps up!”

Wisconsin: (Hearth, BBQ) “Remodeling, additions, and soon new construction start-ups – we have been busy! Appreciate the business!”

Wisconsin: (Hearth, Patio, BBQ, Spas) “Played catch-up this month from all the cancellations due to the weather. A little more foot traffic this month.”


Consumer Confidence

The Consumer Confidence Index, which had increased in February, improved sharply in March. The Index now stands at 125.6 (1985=100), up from 116.1 in February.

“Consumer confidence increased sharply in March to its highest level since December 2000 (Index, 128.6),” said Lynn Franco, director of Economic Indicators at The Conference Board. “Consumers’ assessment of current business and labor market conditions improved considerably.

“Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects. Thus, consumers feel current economic conditions have improved over the recent period, and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months.”

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.

Back to top


West

California: (Hearth, Patio, BBQ, Spas) “Warm weather, tax refunds, approved building plans, optimism galore.”

California: (Hearth, BBQ) “Cooler weather in California has lengthened our season.”

California: (Hearth) “Fantastic March! We blasted last March out of the water.”

Colorado: (Hearth, BBQ) “We were only about 5% up in March, but up is up and we’ve been blessed this year with steady sales. April and May are usually very slow for us but we are almost looking forward to it to have a little breather.”

Idaho: (Hearth) “Good traffic, new construction starting strong.”

Oregon: (Hearth, BBQ) “March was incredible! Foot traffic has been terrific and we are taking advantage of it. I see things slowing down in May, but we have already met the April budget with scheduled installs.”

Washington: (Hearth, Spas) “Cold weather increased heating sales.”

Wisconsin: (Hearth, Patio, BBQ, Spas) “It has been real slow. Road bans have been lifted and anniversary sale has started, so will see if we can’t pick things back up.”

Canada

British Columbia: (Hearth, BBQ) “March has been busier than we expected and this helps the 2017 booking orders that we are just placing.”

British Columbia: (Hearth, Patio, BBQ, Spas) “Pretty much a status-quo month compared to last March. Started really slow but finished with a bang, putting us on par with last year’s March record sales. Wish we could get some real spring weather.Winter is just dragging on.”

New Brunswick: (Hearth, Patio, BBQ) “We had a nice increase this month due to really bad weather and power outages.”

Ontario: (Patio) “High U.S. dollar still a factor – not good.”

Ontario: (BBQ) “Great start for the season. Good weather with lots of lookers and lots of early buyers. Most of the Big Box stores are still trying to sell off snowblowers. They only have last fall’s ‘dust collectors’ on display.”

Ontario: (Hearth, Patio, BBQ) “March is the number-one most consistent month. With 40 years of hearth sales under my belt, I know March is the month to catch up on your paperwork, plan the spring attack, go to a show, or even a beach if so inclined. March is relaxation month. Get used to it.”

Ontario: (Hearth, BBQ) “Pent-up cabin fever = good sales!”

Ontario: (Hearth) “We are all electric.”

Saskatchewan: (Hearth, BBQ) “Economy is tight due to low oil prices/low potash and uranium prices. There are lots of layoffs in those fields. Also just got slammed with a tough budget with all kinds of taxes going up. The future is not looking good at all.”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 3-Mar-17 31-Mar-17 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 2,395.96 2,000.54 2,381.12 2,362.72 -0.8% 9.0% 14.0%
HNI Corporation (a) HNI 56.96 37.24 45.63 46.09 0.1% 18.5% 16.0% $2,030.0
Pool Corporation (b) POOL 117.80 79.70 116.10 116.10 10.5% 14.6% 41.9% $4,800.0
Rentech (b)(e) RTK 4.15 0.42 1.05 0.05 -40.8% -82.9% -83.6%     $11.6
Restoration Hardware Holdings (a) RH 46.87 24.41 31.34 46.26 48.3% 33.8% 5.7% $1,660.0
Wayfair, Inc. (a) W 49.34 27.60 39.30 40.49 11.3% 2.8% -7.9% $3,480.0

NOTES:

(a) = Standard & Poor’s 500 is based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. It is considered one of the best representations of the U.S. stock market, and a bellwether for the U.S. economy.
(b) = New York Stock Exchange
(c) = NASDAQ
(d) = Rentech is the parent company of New England Wood Pellet, which is the parent company of Allegheny Pellet.

Back to top


More Industry Data

2017 February Business Climate

In early March, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare February 2017 sales to February 2016. The accompanying charts and selected comments are from the 189 useable returns.

» Continue

The Right Direction

By Richard Wright

A 3% gain over the prior year doesn’t seem like much, but it’s the sixth year in a row with positive numbers; that adds up.

» Continue