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Hearth & Home October 2018

2018 August Business Climate


August Sales

In early September, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare August 2018 sales to August 2017. The accompanying charts and selected comments are from the 196 useable returns.


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Weather Report

Consumer Confidence

Stock Watch


MONTH-TO-MONTH

RETAILER SALES – U.S. AND CANADA – August 2018 vs. August 2017

Eighty-three percent of Hearth retailers, and 75% of Spa retailers were either UP or the Same, while Patio and Barbecue were at 86% and 87% respectively.


13 MONTH YEAR-OVER-YEAR RETAILER SALES
August 2017 vs. August 2018

In August, the Hearth season kicked off with a 10% gain over the same period a year ago. Patio products were up a strong 7%, Spas had a 5% gain, and Barbecue sales were flat.



Retailer Comments

Northeast

Connecticut: (Hearth) “Better year thus far than last few – across the board, wood, pellet, and gas. Some people who bought this year came in two years ago just looking. They're tired of the long, cold, expensive winters. Looks like a good year on the horizon.”

Connecticut: (Hearth) “After a slow June and July and a good August we are still up for the YTD.”

New Hampshire: (Hearth, Patio) “Economy is great! Not only are sales up, but customers are spending their own money and not credit.”

New Jersey: (Hearth, BBQ) “Hearth products are up for a hot month! Customers who came in just looking last year are coming in to purchase this year! Our weather is so up and down almost daily that we are happy to see this.”

New Jersey: (Hearth, Patio, BBQ) “August was down from the previous month, but still strong. The season has changed so time is up.”

New York: (Hearth, BBQ) “We had some bursts of sales but the momentum just did not continue.”

New York: (Hearth, Patio, Spas) “Here in Upstate New York, I would have been better off being in the Ark-building business! We've had 300% more rain than normal for August! Sheesh!”

Pennsylvania: (Hearth, BBQ) “Too much rain for outdoor product sales. We expect strong hearth sales and some outdoor projects this fall if it stops raining.”

Pennsylvania: (Hearth) “September is starting out good.”


Weather Report

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

New Hampshire had a Record Warmest August, as did Massachusetts, Rhode Island, Connecticut and Delaware.

In the three-month period June to August, the vast majority of states experienced Above Average to Much Above Average temperatures. The exceptions were Rhode Island and Utah, with Record Warmest temperatures, and Nebraska with Near Average temperature.

Unfortunately, California had Much Below Average precipitation, just when it needed it the most. However, eight states did post Much Above Average precipitation; they were New Hampshire, Massachusetts, New York, Pennsylvania, West Virginia, Indiana, Iowa, and Arkansas.

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South

Arkansas: (Hearth) “August ended up being a good retail month for hearth products thanks to a few remodeling projects involving vent-free gas. Too hot for wood and pellet products. Waiting for fall!”

Florida: (Patio) “Our sales were better last year, even with hurricane Irma around and no power for six days.... Add to that, 1. Dead floating manatees. 2. Turtle carcasses. 3. The Red Tide smell. 4. Dead and rotting fish. Beachfront property is getting cheaper by the day! The Sunshine State has had 55 days straight of rainfall!”

Georgia: (BBQ, Spas) “Slow start to August, but thanks to a big last 10 days, we finished up.”

North Carolina: (Hearth, BBQ) “Sales again have been amazing. Every month sales are even higher. We have been here for 22 years and it has never been this good. Biggest issue we have is getting new help. Just cannot find quality people. If we could, sales would be even higher.”

Oklahoma: (Hearth) “Lots of rain! August was a good time to prepare for winter.”

Virginia: (Hearth) “August sales were really down until the end of the month. Rain and more rain was taking its toll on new home construction. The last week of August sales started to perk up some. Hope that September will really kick it up a couple of notches, as this is usually the time customers start thinking and buying vent-free gas log sets and fireplaces. The fall of the 90+ degree temps will help a lot.”

Midwest

Illinois: (Hearth, Patio, BBQ) “Seemed a little slower than last August. A lot of people on vacation I think.”

Iowa: (Hearth, BBQ) “More interest in wood stoves than the past few years.”

Iowa: (Hearth) “August sales in our area are always relatively flat most years, not until September and October do sales hit. There seems to be more customers inquiring this August than in other years. We are a pellet stove dealer for the most part, so it almost always takes some cold weather to break people loose.”

Michigan: (Hearth) “Home remodels and new construction are the reasons for growth in monthly and YTD sales.

Michigan: (Patio, BBQ) “Outdoor furniture has been very fickle this year. Woven product demand has diminished in favor of the clean lines of alternative poly or aluminum product. Demand for large and extra-large tables is up, but sales are slow. Many times customers come in wanting something very specific, yet when it comes to the bottom line they don't want to pay for exactly what they wanted. Mass merchant advertising has skewed the consumer's sense of value.

“Grills were selling well prior to Father's Day, then dropped off, despite advertising and promotional giveaways from our manufacturers. We feel that the grill sales are definitely affected by an influx of product and sales at mass merchants with sub-standard product. In fact, we have had a rise in customer requests for parts for Box store products, as those products are failing even after a year's time. Consumer education is the key in getting grill sales back on track.”

Missouri: (Hearth, BBQ) “The local market is strong in housing, but most of it is for new first-time homeowner housing. The demand for this housing (meaning under $200k) is at levels we have not seen for many years, and the trades cannot keep up. Meanwhile, move up housing is starting to sit vacant. The increase in affordable housing has brought more competition to the area in regards to fireplace installers as well as many HVAC companies dabbling in the builder side of things for fireplaces.

“This trend is dispersing the sales around and allowing contractors to try to drive down the already cutthroat builder unit pricing. We remain profitable due to controlling nearly all of the custom jobs and a handful of contractors who refuse to sacrifice quality, but sales have been hurt. Competition is healthy and free market is great, but I do believe there needs to be more local and national regulation on fireplaces. ‘We put fire into your home’ is a mantra that needs to be taken seriously. I cannot tell you how many homes we have stopped in just to see what the competition is installing, just to see the poor/dangerous installs that are being performed. (An investigation into this across the nation might make for a good article....)”

Ohio: (Hearth, BBQ) “August sales were up over last year, but that is misleading, as last year was a personnel disaster in our store. New management and staff are driving sales of products that we lost to competitors last year. Barbecue sales have been flat or down all year – terrible barbecue season for us!

“Hearth products have been up steadily as the economy seems to be picking up steam. Hoping for an early start to heating season! We have already started to schedule days dedicated to pre-season maintenance and service calls for heating appliances as nighttime temps dip into the low 60s and high 50s. Bring on the cold weather!”

Wisconsin: (Hearth, Patio, BBQ) “This year was the best in 30 years; we've never seen so much new construction, homes are getting larger, still can't find help, no one responds to help wanted ads, but everyone else in a 50-mile radius says the same thing. Gas is out-selling wood and pellet, electric products are holding their own. Lead times are getting longer, back logged two months, historic times. Products are so much better now, even better than the past three to five years.”

Wisconsin: (Hearth, Patio, BBQ) “A late spring followed by an extremely wet summer and we're still ahead of last season. Some recent large jobs have helped the overall $. Looks like fall will be busy, if it ever stops raining. Flooding is hurting getting to job sites and delaying building. Pray for all the folks that have lost their belongings, homes, and memories.”

Wisconsin: (Hearth, BBQ) “A wonderful increase in sales. Just hope we can keep up. We are still looking for a good younger employee.”

Wisconsin: (Patio) “It was the best August ever. Sales continued to outpace previous years. Hope the trend continues!”


Consumer Confidence

The Consumer Confidence Index increased in August, following a modest increase in July. The Index now stands at 133.4 (1985=100), up from 127.9 in July.

"Consumer confidence increased to its highest level since October 2000 (Index, 135.8), following a modest improvement in July," said Lynn Franco, director of Economic Indicators at The Conference Board. "Consumers' assessment of current business and labor market conditions improved further. Expectations, which had declined in June and July, bounced back in August, and continue to suggest solid economic growth for the remainder of 2018. Overall, these historically high confidence levels hsould continue to support healthy consumer spending in the near-term."

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, Spas) “The economy is strong and people are positive, which generates good business. Lots of remodels and more new construction now. Let's hope it continues for a while. Also, the spa business is showing improvement.”

California: (Hearth, Patio, BBQ, Spas) “August was a great month all around. We are booking until November now and people are being patient, as long as it stays warm. Should be another good year. Just a suggestion: It would be great if HPBA had some sort of apprentice program to train installers and service techs. A one-year program to learn the stoves, with different retailers, and to learn different brands. They will not know everything, but they would be a little more useful than someone who knows nothing.”

Oregon: (Hearth) “In a booming year, August was very slow. The weather has been super-hot and it's easy to get complacent during times like that.... You know the old saying though, when there's no wind in your sales, it's time to get out an oar and row! That's what we are doing now and September is looking good!”

Washington: (Hearth, Patio, BBQ, Spas) “We recently started selling patio products. Hearth has been booming throughout the year (YAY!), we brought spas in a year ago in August and have seen a great revenue boost from that. Barbecue is up slightly.”

Canada

British Columbia: (Hearth, BBQ) “Even though we had an extremely hot August, our hearth customers kept confirming orders and taking deliveries. Chimney sales were steady and we have already sold our chimney booking orders – couldn't have guessed that we should have ordered much more. Due to BC's worst forest fire season, we had too many smoky days and our local soccer tournament had to be put off until late September.”

British Columbia: (Hearth, BBQ) “Pretty normal activity for August.”

British Columbia: (Hearth, Patio, BBQ, Spas) “August was a down month, not looking like a trend but we will see. Plenty of work booked for the fall.”

British Columbia: (Hearth, BBQ) “This year started a little slower, but quickly started to get stronger. I find customers are planning for the cool weather sooner this year, as sales for hearth products have been quite strong this spring and summer.”

Ontario: (Hearth) “Hot, hazy, humid. Hardly any store traffic, and impossible to line up annual cleanings etc.”

Ontario: (Hearth, BBQ) “Just a normal August.”

Ontario: (Hearth, Patio, BBQ) “We had a difficult 14-month interruption due to highway improvements at our location. We are located at a very busy highway intersection which included a new bridge. Should only get better now.”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 3-Aug-18 31-Aug-18 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 2,914.04 2,476.55 2,840.35 2,901.52 2.2% 7.8% 17.2%  
HNI Corporation (b) HNI 45.40 31.16 42.68 44.10 3.3% 17.8% 18.7% $1,880.00
Pool Corporation (c) POOL 150.26 97.25 157.18 164.26 4.5% 15.3% 63.0% $6,830.00
Restoration Hardware (b) RH 164.49 67.62 134.74 159.00 18.0% 98.1% 227.8% $2,800.00
Wayfair, Inc. (b) W 100.14 35.45 111.64 135.17 21.1% 68.2% 86.5% $11,960.00

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

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More Industry Data

2018 October Business Climate

In early November, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare October 2018 sales to October 2017. The accompanying charts and selected comments are from the 232 useable returns.

» Continue

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In early October, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare September 2018 sales to September 2017. The accompanying charts and selected comments are from the 2,003 useable returns.

» Continue

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In early July, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare June 2018 sales to June 2017. The accompanying charts and selected comments are from the 216 useable returns.

» Continue