Hearth & Home November 2017

2017 September Business Climate


September Sales

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


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Weather Report

Consumer Confidence

Stock Watch


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

September was a strong month for all four industries that we cover. A combination of retailers whose sales were Up and retailers whose sales were the Same as in the prior year, were as follows: Hearth (81%), Patio (84%), Barbecue (82%), and Spas (85%).


13 MONTH YEAR-OVER-YEAR RETAILER SALES
September 2016 vs. September 2017

In September, sales of Spas were up 24%; Hearth products were up 12%; Patio products were up 3%, and Barbecue products were up 2%.


Retailer Comments

Northeast

Connecticut: (Hearth) “Better traffic than last three years. Cold weather predicted for the Northeast; price of oil is inching up. Looks like a decent season, finally. We’ll take it.”

Maine: (Hearth, Patio, BBQ) “Cooler weather and higher heating fuel costs has motivated sales for alternative home heat. Wood stove sales have been strong this month. Pellet remains in low demand.”

New Hampshire: (Hearth) “August was up from last year. Sales are solid and steady for September; feels good! And that’s with a couple of weeks at 85-90 degrees! We are farther out with our install schedule than last year. I anticipate this will keep up through the end of the year.”

New Hampshire: (Hearth) “The lower temps in the last two weeks of August coupled with a 47-cents-per-gallon jump at the gas station marquee kicked the stove and pellet business into overdrive. Sorry to gloat when many are suffering in the Gulf areas, but it was the only thing to get customers off the couch and back to face reality.”

New Jersey: (Hearth, BBQ) “Started strong with early cold nights.”

New York: (Hearth) “My installer is ill and we have lots of stoves to install when he is back on his feet.”

New York: (BBQ, Spas) “Great traffic and national promotion resulted in 40% increase in hot tub sales.”

New York: (Hearth, Patio, BBQ, Spas) “September was an epic month. Spa sales led the way with pool, hearth and barbecue all at highs over last year. Finished off a boring summer with a bang.”

New York: (Hearth) “Sales were up. Who knows why! We have been doing this for 35 years and every year is different and special. Maybe folks are worried about oil prices, a colder than normal season, or they are ready for a stove. We’re happy.”

New York: (Hearth, Patio, BBQ, Spas) “Busy with everything across the fields. Gas is number one. Pellet is a strong second, and wood is the best it’s been in five years.”

New York: (Hearth) “Up 1% for the calendar year.”

New York: (Hearth, BBQ) “Warm end to September has dampened sales. Installations are an issue as my sub-contractor is pre-occupied with other family and work issues. Backed up six weeks already.”

Pennsylvania: (Hearth, Patio, BBQ) “Floor traffic is steady and sales are steady but nothing to jump up and down about. Weather is still too warm to drive customers in to buy. Service is picking up but not where we should be and, again, that’s due to milder temperatures. Need a week or two of cooler temperatures to get the ball rolling, and maybe a cold winter as per the ‘Farmer’s Almanac.’”


Weather Report

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

The heat was in the East, as the New England states, plus New York, New Jersey, Michigan and Wisconsin experienced September temperatures that were Much Above Average.

For the three-month period July–September, seven states posted Much Above Average temperatures, while the state of Oregon experienced a Record Warmest period. Nationwide, it was the 11th warmest July-September since 1895.

It’s a bit surprising, but the usually humid and/or wet state of Louisiana had its Record Driest month in September, just a short time after hurricane Harvey passed by.

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South

Arkansas: (Hearth) “Finally picking up due to long-range winter forecast for Arkansas. Mostly vent-free products being bought, with some wood stoves. Sure hope sales continue like this.”

Louisiana: (Hearth) “August was a so-so month with parents taking last minute vacations and schools starting. Our builders had to work around these issues. However, we sold more high-end units which helped.”

Oklahoma: (Hearth) “Year-to-date up 53.7%.”

Oklahoma: (Hearth) “One week great, two weeks bad, seems to be the way 2017 is going – I hate roller coasters.”

Oklahoma: (Hearth) “Still hot but more people looking at pellet stoves!”

Texas: (Hearth, Patio, BBQ) “We generally see a slowdown right before school starts in August and for a week or two after, but September into the first of October was dead. Just now starting to see things moving again; have no idea as to what brought everything to a halt. New construction and walk-ins were very slow, only thing good was accessories.”

Virginia: (Hearth, Patio, BBQ) “Busy, then slow, busy then slow, then it got cold. Thank you Mother Nature!”

Midwest

Indiana: (Patio, BBQ, Spas) “We have had three of the coldest weeks at the end of September in my memory and store sales have dried up for the year, I’m afraid. Also had a few people come through looking at spas but no takers so far. Grills have been pretty steady; we sell Big Green Egg and Green Mountain Pellet grills, and they have some great advertising to bring clients into the store.”

Indiana: (Hearth, BBQ) “Just starting to see foot traffic in our showroom. Several Boomers wanting to add a fireplace in their home.”

Michigan: (Spas) “Month started out slow. Back to school and abnormal cool weather at start of month. Sun came out – thermometer went up. Better weather than in late July and August. The sweet sounds of the register ringing. Small ticket and big ticket sales for 20 solid days made September a terrific month. Also tremendous advertising by all hot tub dealers drove the business. Thanks guys.”

Michigan: (Patio, BBQ) “Special Orders were slightly up, which is surprising for our market as our season is mostly over.”

Michigan: (Hearth, BBQ, Spas) “August was real strong. Home building is very good in West Michigan! Linear fireplaces are doing extremely well in the high-end house market. Gas, gas, and more gas! Wood is definitely slower.”

Missouri: (Hearth, BBQ) “Warm weather softened heating sales but boosted barbecue.”

Ohio: (Hearth, BBQ) “Still feeling the upside of a lot of hearth remodeling projects from the summer. Hoping cooler weather settles in soon so we can start moving bread and butter products like gas logs, glass doors, etc.”

Wisconsin: (Hearth) “Strong retail and very strong contractor market. Wood fireplaces are in unusually high demand. Wood stoves are the soft spot in the market.”

Wisconsin: (Hearth, BBQ) “Great month!”


Consumer Confidence

The Consumer Confidence Index, which had improved marginally in August, declined slightly in September. The Index now stands at 119.8 (1985=100), down from 120.4 in August.

“Consumer confidence decreased slightly in September after a marginal improvement in August,” Lynn Franco, director of Economic Indicators at The Conference Board. “Confidence in Texas and Florida, however, decreased considerably, as these two states were the most severely impacted by Hurricanes Harvey and Irma. Despite the slight downtick in confidence, consumers’ assessment of current conditions remains quite favorable, and their expectations for the short-term suggest the economy will continue expanding at its current pace.”

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

California: (Hearth, Patio, BBQ, Spas) “Many of the sales are from people who were “just looking” the last time they were here. One considered an Internet purchase, but it “seemed complicated.”

California: (Hearth, Patio, BBQ, Spas) “We are booked until the middle of November. It’s getting colder and the phone is ringing off the hook. If we could only hire people who want to work we could be caught up.”

California: (Hearth, BBQ) “Slow but steady.”

Oregon: (Hearth, BBQ) “Business is brisk. We are up about 10%. Biggest issue is that new construction was running behind about two months, which takes us into late fall when we’re busy.”

Canada

British Columbia: (Hearth, Patio, BBQ, Spas) “September started slow, but after the first week we were off. Finally had an up month in barbecues, combined with decent hot tub sales and an increase in patio furniture made for a pretty good month. Flat in fireplace sales, so really hoping for a much cooler fall to spur things on.”

Ontario: (Patio) “Patio is holding up pretty good. Nice fall weather and a stronger Canadian dollar are both helping. Maybe we will catch the U.S.”

Ontario: (Hearth, Patio, BBQ) “Weather was too warm for Hearth sales and too late for Patio.”

Ontario: (Hearth, Patio, BBQ) “Pretty quiet.”

Quebec: (Hearth) “Montreal in 2016 revised their 2009 decision on the ban of wood products and it has generated lots of action in this category (regarding September sales).”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 4-Aug-17 1-Sep-17 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 2,519.36 2,085.18 2,476.55 2,519.36 1.7% 6.6% 16.2%  
HNI Corporation (b) HNI 56.94 34.60 37.14 41.47 11.7% -10.0% 6.6% $1,830.00
Pool Corporation (c) POOL 124.26 88.65 100.79 108.17 7.3% -9.4% 14.4% $4,600.00
Rentech (c)(d) RTK 3.04 0.23 0.27 0.46 70.4% -8.0% -84.2% $9.17
Restoration Hardware (b) RH 79.91 24.41 48.51 70.32 45.0% 52.0% 103.4% $1,620.00
Wayfair, Inc. (b) W 84.19 27.60 72.46 67.40 -7.0% 66.5% 71.2% $6,010.00

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

2017 August Business Climate

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

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2017 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 2017 sales to July 2016. The accompanying charts and selected comments are from the 216 useable returns.

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In early July, Hearth & Home faxed a survey to 2,500 Specialty retailers of hearth, barbecue and patio products, asking them to compare June 2017 sales to June 2016. The accompanying charts and selected comments are from the 192 useable returns.

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2017 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 2017 sales to May 2016. The accompanying charts and selected comments are from the 196 useable returns.

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