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Hearth & Home February 2020

2019 December Business Climate


December Sales

In early January, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare December 2019 sales to December 2018. The accompanying charts and selected comments are from the 216 usable returns.


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Weather Report

Consumer Confidence

Stock Watch


MONTH-TO-MONTH

RETAILER SALES – U.S. AND CANADA
December 2019 vs. December 2018

In December, 43% of Spa retailers were UP over the prior year, while 40% of Hearth retailers were UP, 26% of Barbecue retailers were UP, and only 9% of Patio retailers were UP.


13 MONTH YEAR-OVER-YEAR RETAILER SALES
December 2019 vs. December 2018

In December, both Hearth and Spa retailers were up 4%, Barbecue retailers were up 7%, and Patio retailers were the same as the prior year.



Retailer Comments

Northeast

New Jersey: (Hearth, BBQ) “Having a good year.”

New York: (Hearth) “Very busy. Booked to end of January.”

New York: (Hearth) “In the month of December here in the Northeast, weather was rather mild. Our sales of both pellets and coal were down but to counter that, service was up. Our service schedule was full and often we would add extra days for service. It seems homeowners don’t want to or don’t know how to repair their pellet or coal units and would rather pay a professional to come in and do it. It all added up to a slightly better month in 2019 than 2018. We are looking forward to 2020.”

New York: (Hearth, BBQ) “2019 was our last year for selling barbecue items in our store. After over 60 years, we are done with the Internet competition and Box store beat-ups. Looking forward to more free time this spring and summer!”

Pennsylvania: (Hearth) “Really satisfied with year-end numbers. Mild weather is not deterring customers from moving forward with supplemental heating projects.”

Pennsylvania: (Hearth) “December weather and labor shortage slowed down our completed installations, along with closing from December 23 to January 2. The past calendar year was our best ever! Even with a December slowdown. December is not a big month for us, we don’t sell gift items.”

Pennsylvania: (Hearth, Patio, BBQ) “Third best year in 41 years of hearth. We are booking four to five weeks out despite mild weather and low fuel prices.”


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.

In December, the heat was in the South and Southeast, with nine states posting temperatures Much Above Average. Nationwide, it was the sixth warmest December in 125 years.

For the three-month period of October – December, Georgia and Florida posted Much Above Average temperatures.

For the 12-month period January – December, 2019, both Georgia and North Carolina hit Record Warmest temperatures, while 13 other Southern and Mid-Atlantic states posted Much Above Average temperatures. Overall, 30 states in the contiguous U.S. posted above average temperatures for the year. Six states were below average.

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South

North Carolina: (Patio) “The high sale percent increase is only indicative that it’s the slowest month of the year.”

North Carolina: (Patio, BBQ, Spas) “We are fortunate to have a great and dedicated staff that knows how to focus on cultivating leads during this traditionally slower period of the year.”

North Carolina: (Hearth, BBQ) “Customer confidence and new construction are driving the business. Service is solid. There is a big need for experienced technicians and installers.”

Texas: (BBQ) “Ceramic’s Big Green Egg and Primo have slowed way down. Pellet grills are still selling.”

Texas: (Hearth, BBQ) “Not much of a winter in Houston for December 2019. Average daytime temps were 64°F. In December 2018, we were still in the post Harvey flood sales. Technically, our hearth product December 2019 sales were not down. We were just extremely elevated last year due to flood recovery sales.”

Virginia: (Hearth, BBQ) “Very slow December. It doesn’t help when it’s 60°F to 70°F on most days! We need cold!”

Virginia: (Hearth) “Best December we’ve had in several years, both in sales and annual service. Empire’s vent-free products really took off! Hope it will stay that way for the next couple of months. After that, new-home construction will start back up.”

Midwest

Illinois: (Hearth, Patio, BBQ) “Good push at the end of Christmas!”

Indiana: (Hearth, Patio, BBQ, Spas) “December was our strongest month of the year. We sell all categories.”

Missouri: (Hearth, BBQ) “This has been an interesting year. Barbecue sales were down significantly in 2019. This was largely a result of a cold, wet spring. We never made up the lost sales during this period. However, December barbecue sales were strong.

“On the hearth side, sales were good but not equal to last year’s record numbers. Construction seems to be softer than in 2018. Despite this we are selling a wide mix of all categories, wood, gas, electric, and pellet. The electric category for us has narrowed to only built-ins and linear. The cabinet package unit sales are all but gone. Wood and gas fireplace sales are strong. Wood-stove sales are less than the previous year due to mild weather.”

Missouri: (Hearth) “Third straight year with strong growth for our company. Average ticket and unit sales have increased substantially. We’re primarily selling into commercial and mid- to high-end residential. Seems like the sky’s the limit for selling higher-priced fireplace units that include substantial features and benefits.”

Ohio: (Hearth, BBQ) “While we set an annual sales record for 2019, December’s numbers were a bit disappointing. We were excited to see our flagship hearth line numbers continue the upward trend that started over five years ago. Looking forward to growing even more in 2020!”

Wisconsin: (Hearth) “Very strong contractor/builder market. Consumer market not as strong as last year’s “phenomenal year.” Limited in sales volume by insufficient installation ability. Hiring and keeping good staff is a constant challenge.”

Wisconsin: (Hearth, Patio, BBQ, Spas) “Iffy year overall, good but not as good as 2018. 2018 was very good! Lots of rain delays, buildings going up slowly, and not getting finished when expected. Last year we had some very high-end jobs, this year more average overall. December was the busiest I have seen, hope to see 2020 explode with dry weather and warm summer. Patio and fire table sales could stand a boost.”

Wisconsin: (Hearth, BBQ) “This has been a few interesting years. Some were hard and some wonderful. We have retired. We have been in the process for the previous two months, because sales have been transferring to the new owners for loosely three months. This is an amicable change. So our sales would decrease. It is a good industry to be in.”


Consumer Confidence

The Consumer Confidence Index decreased marginally in December, following a slight increase in November. The Index now stands at 126.5 (1985=100), down from 126.8 (an upward revision) in November.

According to Lynn Franco, director of Economic Indicators at The Conference Board, “While consumers’ assessment of current conditions improved, their expectations declined, driven primarily by a softening in their short-term outlook regarding jobs and financial prospects. While the economy hasn’t shown signs of further weakening, there is little to suggest that growth, and in particular consumer spending, will gain momentum in early 2020.”

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, BBQ, Spas) “Great year, economy is good and people are spending money. Hope 2020 is the same.”

California: (Hearth) “Hoping 2020 will be prosperous for all!”

Colorado: (BBQ) “Black Friday in November sucked grill sales out of December.”

Nevada: (Hearth, BBQ) “Happy New Year.”

Oregon: (Hearth, BBQ) “Healthy Christmas economy, plus we’re finishing off our first year with a full showroom display.”

Wyoming: (Hearth) “It’s remarkable how much of a difference it makes when we have quality service techs who have a spirit of excellence. That’s not the explanation of our overall 2019 increase, however, it certainly contributed.”

Canada

British Columbia: (Hearth) “No sales, as I was closed for the month.”

British Columbia: (Hearth, BBQ) “Hearth sales are consistent with chimney sales increasing. Chimneys are so important to make today’s wood-burners perform properly. Perhaps a beneficial earthquake could knock all the old brick and stone chimneys down.”

Ontario: (Hearth, Patio, Spas) “Fireplace sales were brisk and consumers attitudes were great.”

Ontario: (Hearth, Patio) “Manufacturers, distributors, and reps need to remember who is on your front line and start actually respecting and supporting the dealers that have made this an industry. Stop treating us as adversaries. Stop giving us lip service. Start listening and responding. When/who was the last dealer/manufacturer/distributor round table discussion?”

Saskatchewan: (Hearth) “The economy on the prairies has flat-lined, due to a bad and incomplete harvest and election.”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 29-Nov-19 27-Dec-19 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 3,240.02 2,447.89 3,140.98 3,240.02 3.2% 10.1% 30.3%  
HNI Corporation (b) HNI 42.23 29.90 39.29 37.37 -4.9% 5.6% 6.2% $1,600.00
Pool Corporation (c) POOL 228.19 141.83 206.45 213.34 3.3% 11.7% 44.3% $8,610.00
Restoration Hardware (b) RH 243.67 84.11 205.59 214.87 4.5% 85.9% 80.6% $4,030.00
Wayfair, Inc. (b) W 173.72 78.61 84.92 92.09 8.4% -36.9% 1.5% $8,340.00

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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