Hearth & Home September 2017

2017 July Business Climate


July Sales

In early August, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare July 2017 sales to July 2016. The accompanying charts and selected comments are from the 216 useable returns.


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Weather Report

Consumer Confidence

Stock Watch


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

In July, 50% of Spa dealers and 49% of Hearth dealers said their July sales were up over the prior year, while only 32% and 33% of Patio and Barbecue dealers, respectively, could say the same thing.


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

Sales of Spas continue to post strong numbers; they’re up 15% over July 2016. Hearth and Barbecue products were up by 6% each, while Patio sales trailed with only 2% growth.


Retailer Comments

Northeast

Connecticut: (Hearth) “We are having a moving sale so that might be the reason for the increase. Floor models are hugely discounted. But that being said, we’re seeing traffic picking up earlier. Hope it’s a sign of good things to come.”

Maine: (Hearth) “Gas sales are good. Wood and pellet are just poking along.”

Maine: (Hearth, Patio, BBQ) “July sales were strong, driven by seasonal demand and cooler than average summer temperatures.”

New Hampshire: (Patio) “We expected some recovery from a rainy June, but the political climate seems to be causing too much insecurity. This is our worst sales decline in 18 years, including 2008.”

New York: (Hearth, BBQ) “Not much traffic until the end of the month – slow.”

Pennsylvania: (Hearth, Patio, BBQ) “Very pleased with incoming phone calls and traffic into the store. Scheduling chimney and gas service into September, and scheduling installations into October.”

Pennsylvania: (Hearth, Patio, BBQ) “July was surprisingly slow for all of our product lines (hearth, patio & barbecue) including service. Big Box stores are beginning to dump their seasonal products (patio & barbecue).”


Weather Report

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

July was a very good month to be in New Hampshire, as well as the 16 other states that posted Near Average temperatures. The rest of the country sweltered with Above Average and Much Above Average temperatures.

For the three-month period May-July, there was a heat wave in the western states. The surprise was in the Pacific Northwest, where Montana, Utah, Oregon and Washington experienced surprisingly hot temperatures.

The states of Colorado, Illinois, Ohio, Pennsylvania, Maryland and Delaware received Much Above Average precipitation during the month of July.

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South

Alabama: (Hearth, Patio, BBQ) “July was a terrible month. Don’t have a clue why. We started the year off great and then went flat. We have manipulated our advertising budget, and we still have spring in our step and a Prozac smile.”

Arkansas: (Hearth) “Not a good month for retail – too hot all month. No floor traffic whatsoever.”

Florida: (Hearth, BBQ) “Sales are OK, it’s a good year so far. It’s time for specialty retailers to stop putting up with manufacturers’ whoring their products on the Internet. Who is going to buy products that cost thousands of dollars without seeing and touching it in a specialty store?"

North Carolina: (Hearth) “Very interesting month. Phone calls are up big time, walk in very slow. Several calls this month, July, asking if we install wood stoves that they purchased from Walmart? Couldn’t believe it myself. China and the Big Box stores can kiss my @%*& Big Time! Yes, we can install it for about $2,700 plus pipe. Go figure.”

Texas: (Hearth, Patio, BBQ) “July has been very strong for barbecues – gas, wood/charcoal and now pellet grills as well as accessories. We are getting a lot of customers coming in wanting to build new outdoor living areas, add an outdoor living area, or remodel their current space. This should carry over into August and September.”

Virginia: (Hearth, Patio, BBQ) “This was the slowest July I have seen in 25 years. Come on fall, show me the money.”

Midwest

Illinois: (Hearth, Patio, BBQ) “Due to bad weather in June, our barbecue and furniture sales were up in July. Overall furniture year-to-date is in decline due to mass sales and Internet. Fireplace is consistent.”

Indiana: (Patio, BBQ, Spas) “We had a great June and then July came and things slowed down on grills, furniture and spas. Not sure why. Our economy in this area is booming, but things have slacked off in the store.”

Michigan: (Spas) “A good hot tub month. There’s a tremendous amount of hot tub and spa advertising in the market by us and by our competition. Internet has taken away all the small ticket sales. Very concerned about that loss of business when it slows down (the economy). That small stuff kept the lights on. As you drive around there are lots of For Lease signs on retail buildings. Those signs are outnumbered by Help Wanted signs. Tough fall ahead, I believe.”

Michigan: (Patio, BBQ) “Consumers are still geared toward creating a staycation/backyard paradise. Surprisingly, special orders are still coming in despite our short season in Northern Michigan. Grill sales have been on the decline as they become more readily available at hardware stores, grocery stores and gas stations in our area.”

Minnesota: (Hearth, BBQ) “No progress even with the economy changing. We’re hearing the same from other retailers and installers.”

Missouri: (Hearth, BBQ) “Heating sales slacked off during the 100+ degree weather. Barbecue sales started very strong but died off during the extreme heat. Overall it was a soft month after having a strong month in June.”

Ohio: (Hearth, BBQ) “High-end grill sales did really well this summer, but we’re sitting on a lot of inventory for the mid-range grill sales. After Memorial Day, those sales really dried up.”

Wisconsin: (Hearth, Patio, BBQ, Spas) “Traffic has been considerably slower than last year, but sales are up either due to run-over from June sales or just more builder and spa sales. End of month traffic has increased greatly and we are really starting to book up. Can’t wait for it to snow in August to give the fall a big boost (LOL).”

Wisconsin: (Hearth, BBQ) “Good month. Looking for another employee.”

Wisconsin: (Hearth) “Very strong builder and retail market.”


Consumer Confidence

The Consumer Confidence Index, which had decreased in May, increased moderately in June. The Index now stands at 118.9 (1985=100), up from 117.6 in May.

“Consumer confidence increased moderately in June following a small decline in May,” said Lynn Franco, director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved to a nearly 16-year high. Expectations for the short-term have eased somewhat, but are still upbeat. Overall, consumers anticipate the economy will continue expanding in the months ahead, but they do not foresee the pace of growth accelerating.”

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

Alaska: (Hearth) “After such poor winter and spring sales we expected no sales through the summer, but sales and installation demand are way above our usual dead summer season.”

California: (Hearth, Patio, BBQ, Spas) “It was difficult to take inventory, we were too busy selling, ordering, scheduling! Our regular summer maintenance isn’t getting done.”

California: (Hearth, Patio, BBQ, Spas) “We are in the middle of summer with fires all around us and people are still coming in looking for heat for next winter. It should be a good year.”

Oregon: (Hearth, BBQ) “July was our toughest month year-to-date, slow foot traffic and hot weather are not helping. We have a huge backlog of sold jobs from the previous month that we are working to install. All things considered, we are still 25% ahead of last July and are looking forward to a record year.”

Canada

British Columbia: (Hearth, Patio, BBQ, Spas) “July was a great month, we were up 40% overall. We lost ground in barbecues and fireplaces but more than made up with hot tubs and patio furniture. We would rather sell the higher-margin goods anyway, so life is fantastic. August is off to a great start; we’re looking for another big one. All smiles in British Columbia.”

Manitoba: (Hearth, Patio, BBQ) “Sales in hearth and barbecues continue to be in line with, or better than last year. Just counting our lucky stars.”

Ontario: (Hearth, Patio, BBQ) “Terrible weather, rain, rain, rain. I’m glad I do awnings and fireplaces! They pay the bills!”

Ontario: (Hearth, BBQ) “We rocked it in March, April, May and June! July was slower than normal. It was the first down month this year. Hopefully NOT a sign of things to come.”

Ontario: (Hearth, Patio, BBQ) “Record rainfall for July resulted in dead outdoor sales. Hearth on the other hand is up 35% over last July.”

Ontario: (Patio) “The exchange rate is still a factor – tough to deal with.”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 30-Jun-17 28-Jul-17 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 2,472.10 2,085.18 2,037.41 2,472.10 2.0% 7.7% 13.7%  
HNI Corporation (b) HNI 56.96 35.55 39.87 37.31 -6.4% -27.6% -28.4% $1,600.00
Pool Corporation (c) POOL 124.26 88.65 117.57 104.28 -11.3% -0.7% 2.0% $4,440.00
Rentech (c)(d) RTK 3.97 0.36 0.45 0.51 13.7% -81.1% -79.9%     $10.68
Restoration Hardware (b) RH 79.91 24.41 64.52 69.87 8.3% 167.8% 126.8% $1,240.00
Wayfair, Inc. (b) W 82.19 27.60 76.88 78.20 1.7% 84.8% 79.8% $6,980.00

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

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