Hearth & Home June 2017

2017 April Business Climate


April Sales

In early May, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare April 2017 sales to April 2016. The accompanying charts and selected comments are from the 232 useable returns.


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Weather Report

Consumer Confidence

Stock Watch


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

A quick look at the percent of retailers Up in sales shows that Hearth (42%) and Spas (40%) are leading the pack. However, combining retailers Up with those that remained the Same shows that Barbecue retailers were at 86% and Patio retailers at 83%.


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

In April, Patio furnishings sales in the specialty retail channel were Up 6%; Hearth sales were Up 4%; Barbecue Up only 2%, and Spas Up 1%.


Retailer Comments

Northeast

Connecticut: (Hearth) “Very little traffic. Any interest is mostly gas products. With the normal winter season, we’re hoping for a normal fall/winter sales season, although we can’t see pellet sales increasing with the increase in pricing (even with the price of fuel coming down). Oil is just too inexpensive right now for people to buy a pellet stove and pellets.”

Delaware: (Hearth, BBQ) “Sales were the same, but two slow years.”

Maine: (Hearth, Patio, BBQ) “We are down over last year for April; confidence seems low and early spring tax payments are causing tight budgets all around.”

Maine: (Hearth) “Sales are continuing to spiral downward.”

New Jersey: (Hearth, BBQ) “Bring on the heat. Sell barbecues. Big Green Eggs!”

New Jersey: (Hearth, Patio, BBQ) “Similar sales from April of last year. Let’s see if it continues.”

New York: (Hearth, BBQ) “Not a lot of activity, but a small increase this time of year is a large percent.”

New York: (Hearth, Patio, BBQ, Spas) “Crappy weather, but excellent quality traffic.”

New York: (Hearth) “We are doing just a bit better this year than last. Hopefully the increase will continue through spring and summer.”

Pennsylvania: (Hearth, Patio, BBQ) “Floor traffic is steady. Customers are looking at outdoor fireplaces and casual fireside chat pits. Interest in pre-fab grill islands is picking up. E-retailers should be tied to chairs then beat about the head with hammers.”

Pennsylvania: (Hearth, Patio, BBQ) “Had a few weeks where jobs did not go the way we planned. This happens from time to time. Remain optimistic.”


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 April, eight states on the East Coast experienced Record Warmest weather, while Washington was the lone state in the nation with Below Average temperatures.

In the three–month period from February to April, 10 states reached Record Warmest temperatures, while the rest of the country experienced Above Average or Much Above Average temperatures. Only the state of Washington had Below Average temperatures.

In April, the state of North Carolina stood alone with its Record Wettest month; 12 other states posted Much Above Average precipitation.

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South

Arkansas: (Hearth) “Very disappointing month with no floor traffic and no sales of hearth units, only accessories. Too many concerns about the economy, North Korea, pending Washington legislation and 15 in. of record rainfall/flooding led to a weak retail month.”

Florida: (Hearth, Patio, BBQ, Spas) “Down a bit, but weather was bad across the country. I think the season is being delayed for patio/spa/hot tubs/pool dealers and retailers.”

Florida: (Patio) “April 2017 was our lowest month in three years! I’m hoping it’s spring break, Easter, Passover and taxes all converging in the same time period.”

Florida: (Patio) “Repeat business kept us on par.”

North Carolina: (Hearth) “Now that HHT owns most of the hearth companies, they are giving away products to every mom and pop dealer, making it hard to be a specialty retailer. It may be time to call it quits. This is one very disappointed loyal Heat & Glo distributor that is changing its line.”  

Oklahoma: (Hearth) “Foot traffic is picking up with a lot of customers remodeling. Hope to see a great month.”

Texas: (Hearth, BBQ) “Been in this business for 30 years, never seen so much Internet. It is really hurting us in our barbecue business. My store is 50/50 barbecue/fireplace; I’m doing 80/20 fireplace/barbecue and may shut down in a couple years. Why pay rent? We will not service any products sold on the Internet.”

Texas: (Hearth, Patio, BBQ) “April, like March, was up and down with the weather. We are seeing a late start to the normal springtime rush. A lot of customers coming in and getting pricing for outdoor living areas. We hope May will be much stronger.”

Virginia: (Hearth, BBQ) “Barbecues are busy/booming!”

Midwest

Indiana: (Patio, BBQ, Spas) “Traffic in the store has been up for the grilling and spa side of our business. We had a local hardware store that went out of business and they were selling the same grills that we carried. This has helped for the repeat Big Green Egg charcoal and pellet sales, along with opening up a larger market for the grills themselves.”

Iowa: (Hearth, BBQ) “Could it have been the fact that 75% of the month had no sunshine? It sure depressed me!”

Michigan: (Spas) “Best April since 2005. Entire month great floor traffic. It was a real shocker, since first quarter traffic was down. That was great news. Bad news is that everyone says, “What’s my deal?” The Internet is still brick and mortar’s number-one enemy, and it’s getting worse by the day. I’m getting tired of manufacturers lying to me when they say – I don’t know how they can sell for those prices. Frustrating.”

Michigan: (Hearth, BBQ) “Slow sales – cold weather – wet! Store traffic picking up. A lot of estimates.”

Michigan: (Patio, BBQ) “Many customers are getting their special orders in early this year.”

Ohio: (Hearth, Patio, BBQ, Spas) “It was a great April!”

Ohio: (Hearth, BBQ) “Consumer confidence in this area seems high right now. Not only are we moving barbecues of all fuel types, but fireplace remodeling projects are still going strong. We continue to have high hopes that 2017 will be the beginning of a significant trend of growth for the next five to 10 years.”

Washington: (Hearth, Spas) “Good month overall!”

Wisconsin: (Hearth, BBQ) “Weather was warm - road limits on early - customers coming in - lots of new construction going to start in May. This is going to be a big spring in new housing starts - Yea!”

Wisconsin: (Hearth, BBQ) “We are ahead of our previous year’s sales. April sales were up. We could use an additional good employee.”

Wisconsin: (Hearth, Patio, BBQ, Spas) “Overall sales are down by only 2.3%, but seems to have been a lot slower than last year. Winter has lingered on with some cool days, frost and snow. Too early to tell how our anniversary sale changed from last year to now.”


Consumer Confidence

The Consumer Confidence Index, which had increased in March, declined in April. The Index now stands at 120.3 (1985=100), down from 124.9 in March.

“Consumer confidence declined in April after increasing sharply over the past two months, but still remains at strong levels,” said Lynn Franco, director of Economic Indicators at The Conference Board. “Consumers assessed current business conditions and, to a lesser extent, the labor market less favorably than in March.

“Looking ahead, consumers were somewhat less optimistic about the short-term outlook for business conditions, employment and income prospects. Despite April’s decline, consumers remain confident that the economy will continue to expand in the months ahead.”

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.

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West

Arizona: (Hearth, BBQ) “Starting to see higher-priced products moving – Twin Eagles, Lynx, Hestan Grills. Fire pit glass sales are down due to cheaper Home Depot and Lowe’s glass price.”

California: (Hearth, Patio, BBQ, Spas) “Best April in three years.”

California: (Hearth, BBQ) “Hearth sales are still strong due to cooler weather.”

Colorado: (Hearth) “April was very dead, but some months are demons and April was a ‘stove.’ Overall we have been way up this year so we are taking it in stride.”

Hawaii: (Hearth) “We are a small family business operating in Maui, Hawaii, for 23 years now that specializes in service, e.g., chimney sweeping, installs, repairs, troubleshooting, refurbishing old stoves, and commercial and residential dryer-vent cleaning. In our peak years of wood stove sales (2007-2014), we sold 15-20 wood-burning stoves a year. Now we sell four to six a year.”

Oregon: (Hearth, BBQ) “April was a great month, we’re selling them faster than we can install them and have already filled up May’s backlog. We are hoping for more of the same!”

Canada

British Columbia: (Hearth, Patio, BBQ, Spas) “Worst winter in years, followed by the worst spring in recent memory seems to have been the catalyst for our best month ever. I really don’t get it, but I will take an overall increase of 32% year-over-year and 17% over our best month on record. All smiles in BC.”

Ontario: (Patio, BBQ) “We had a weekend with great weather and sales went through the roof. Then the ice storm came, then the rains came, then the snow came. Now the snow/ice is going and we want to repeat that – except for the storm thing.”

Ontario: (Hearth) “Orders for installations in May and June noticeably higher.”

Ontario: (Hearth, Patio, BBQ) “Selling higher-end barbecues and patio fireplaces - people are anxious to be outside after winter and older barbecues have reached their life expectancy. Customers are fed up with cheaper barbecues – they want something that will last.”

Ontario: (Hearth, Patio, BBQ) “It was quiet until the end of the month - then people realized it was spring.”

Ontario: (Hearth, BBQ) “Slowest month of the year for us.”

Quebec: (Hearth) “Starting strong.”

Quebec: (Hearth, Patio, BBQ, Spas) “Really bad weather with snow. We are waiting for sun!  And sales.”


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 2,395.76 2,000.54 2,362.72 2,384.20 0.9% 12.1% 15.4%
HNI Corporation (a) HNI 56.96 37.24 46.09 46.76 1.5% 15.8% 7.0% $2,020.0
Pool Corporation (b) POOL 123.13 85.59 119.33 119.62 0.2% 29.7% 36.8% $5,040.0
Rentech (b)(e) RTK 3.97 0.36 0.50 0.52 4.0% -79.8% -85.0%     $10.21
Restoration Hardware Holdings (a) RH 58.08 24.41 46.26 47.97 3.7% 65.3% 10.9% $2,050.0
Wayfair, Inc. (a) W 49.75 27.60 40.49 45.71 12.9% 37.0% 21.1% $4,190.0

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.

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More Industry Data

2017 March Business Climate

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.

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