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Hearth & Home January 2015

2014 November Business Climate


November Retail Sales

In early December, Hearth & Home faxed a survey to 2,370 specialty retailers of hearth, barbecue and/or patio products, asking them to compare November 2014 sales to November 2013. The accompanying charts and selected comments are from the 204 useable returns.


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Weather Report

Consumer Confidence

Stock Watch


Only 28% of barbecue and 34% of patio retailers had a better November in 2014 than in 2013.


13 MONTH YEAR-OVER-YEAR RETAILER SALES
November 2013 Through November 2014

Hearth sales have now posted 35 straight months of positive month/year vs. month/year sales. The last negative month was in December 2012.


Retailer Comments

Northeast

Connecticut: (Hearth) “Although slightly down (probably due to the holidays) we are still having our best year ever. Pellet sales are still strong even with pellets being scarce. Should end the year strong. Oil prices tanking doesn’t seem to make a difference in the big picture.”

Maine: (Hearth, Patio, BBQ) “Storm-related power outages have pushed demand for service and sales of back-up heat source in gas or wood.”

Maine: (Hearth, Patio, BBQ) “Sales have flattened out after a very strong September and October. Pellet is still leading in sales.”

New Hampshire: (Hearth, Patio) “Wood pellet sales have tapered off following a rampant hording frenzy during the past spring and summer. Appliance sales were very strong during the summer and fall. Normally appliance sales falter following Thanksgiving.”

New Jersey: (Hearth, Patio) “Showroom is busy and customers are buying in all categories. We are pleased and very thankful. Keep it coming.”

New York: (Hearth, Patio, BBQ, Spas) “Sales were affected by the pellet shortage. Missed out on a lot of sales and new customers.”

New York: (Hearth, BBQ) “Super strong November! Great sales even with oil dropping in price and a warm fall. Hope the trend stays to the new year. Pellet sales the same as last year. Wood stoves and inserts are up. Gas fireplaces are up also.”

New York: (Hearth) “We are only down about two percent. Sales are off because pellets were not available for several weeks. All’s well now, so expect sales to be as they were.”

Pennsylvania: (Hearth, Patio, BBQ) “Lack of wood pellet availability is starting to affect sales. Interest in and sales of coal stoves are increasing.”

Pennsylvania: (Hearth) “Very hectic with pellet stoves and inserts. Pellet supply becoming a real factor. The only thing harder to get is vent pipe. Gas inserts are very strong.”

Pennsylvania: (Hearth, Patio, BBQ) “Service work is out to the third week of January; installations are out to the second week of January and winter is not even here yet!! This is beginning to worry me. A majority of manufacturers cannot keep up with the orders they have!”

Pennsylvania: (Hearth) “Best November we have ever had!”


Weather Report

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

Twenty states experienced Much Below Normal temperatures in November; only Arizona, Nevada and California were Above Normal to Much Above Normal.

California had its Record Warmest September to November in 120 years; five other western states experienced Much Above Normal temperatures.

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South

Arkansas: (Hearth) “Customers are holding off on big expenditures this month.”

Louisiana: (Hearth, Patio, BBQ) “Sales were good in November with the cool weather and early Christmas sales. We’re hoping for a good Christmas season.”

Oklahoma: (Hearth) “Big wood stove sales month. Overall, November was a great month.”

North Carolina: (Hearth) “We have found that selling quality hearth products is getting easier, but finding good help is getting hard – real hard.”

Texas: (Hearth, BBQ) “Seems like it’s crazy good, like it was 20 years ago. GO SNOW.”

Virginia: (Hearth, BBQ) “Wow, what a busy November, by far the busiest November in six years.”

Midwest

Iowa: (Hearth) “More decisive customers than last year, and they’re more likely to take the larger ticket!”

Michigan: (Hearth, Patio) “With early snow we have had a lot of interest in wood and gas inserts.”

Michigan: (Patio, Spas) “After a tremendous September and October, mid-term elections screwed up November sales. Just as the country was going in the wrong direction, so did sales. Ouch! Thanksgiving weekend sales were nothing worth gobbling about either. We’re waiting for the big man in the red suit to show up in Detroit.
    “Hearth & Home is still the best trade magazine I get. Keep up the excellent work. Promote with brick and mortar. Tax the Internet. Level the playing field. They’re starting to do a lot of ‘showrooming’ and I hate it.”

Michigan: (Hearth, BBQ) “The year so far has been outstanding. Sales are up over 20 percent for the year-over-year comparison. Michigan is strong and continues to see a great come-back.”

Ohio: (Hearth, BBQ) “While November didn’t end particularly strong in the sales department, our fiscal year is still on pace to be record setting.”

Ohio: (Hearth) “Sales and traffic are staying strong. Still very concerned about pellet availability. Venting manufacturers are causing installation delays as well.”

Wisconsin: (Hearth) “Strong sales across all categories – wood, gas, pellet and electric. Enough sales in-house to fill the schedule through mid-January.”

Wisconsin: (Hearth) “Surprised to see about one-third of current projects are now gas, whereas earlier this year no one mentioned the word ‘gas’ after last winter’s spike in LP prices.”

Wisconsin: (Hearth, Patio, BBQ, Spas) “Sales were down compared to last year, but we are scheduled out to February with installs. I think it’s the numbers game, where the dollars are offset into the following months due to not doing the job in the month it is sold.”


Consumer Confidence

The Conference Board Consumer Confidence Index, which had rebounded in October, declined in November. The Index now stands at 88.7 (1985=100), down from 94.1 in October.

Says Lynn Franco, director of Economic Indicators at The Conference Board: “Consumer confidence retreated in November, primarily due to reduced optimism in the short-term outlook.”

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.

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) “Cold, cold, cold weather!”

California: (Hearth, Patio, BBQ, Spas) “A change-out Burn Cleaner program in our area is driving sales.”

California: (Hearth, Patio, BBQ, Spas) “Barbecue and accessory sales have been declining for a few years now; we’re not sure if we are going to dedicate the space for it next year. Stove sales are up and, if we had the employees, we could have run two crews. Trying to find people who want to work and can do the job is becoming more difficult each year.”

Colorado: (Hearth) “Weird month. October was good. November was flat. December is not so wonderful so far. Oh well, one thing you can count on in this industry is that you can’t count on anything.”

Colorado: (Hearth, Patio, BBQ) “Have had more people this year looking into outdoor kitchen setups for spring projects.”

Washington: (Hearth) “Record October and November.”

Washington: (Hearth) “Fifty percent up!!! And last year was up substantially, too.”

Canada

Alberta: (Hearth, Patio, BBQ) “A closing rate over 80 percent has definitely contributed to a fabulous increase over last year.”

British Columbia: (Hearth, Patio, BBQ, Spas) “Amazing month. We were overwhelmed in a good way. Fantastic sales across the board.”

British Columbia: (Hearth) “Consumer confidence and propane prices are way up, translating into a huge boost in wood stove sales.”

New Brunswick: (Hearth) “Customers are still concerned about pending power outages. Wood and propane appliances are getting a lot of interest. We are booked well into January 2015.”

Ontario: (Hearth, BBQ) “Stupid busy up here in Northeastern Ontario, Canada. Pellet stove sales have doubled, gas is up, wood stoves and chimney as well. Weather is cooperating – early snow and it’s staying!”

Ontario: (Hearth, BBQ) “November sales were to the maximum our system could handle in solid fuel. We could have been more profitable if manufacturers had been ready for the swing. Backorders and parts delays were a curse, similar to every other boom year. Why is it so hard for manufacturers to get it right?
    “The cold winter last year, high propane prices in January and February and a slightly better economy should have prepared everyone for increased production. An enormous heartbreaker is to finally see a real profitable year rising and no product available to take advantage of it. It looks like HHT was the only one with their head in the game.”

Quebec: (Hearth) “Pellet stoves are up.”

Saskatchewan: (Hearth) “Just took on two new lines: Louisiana Grills (pellet barbecues) and Big Green Egg (Kamado style barbecues). Just setting these up. We are very excited about them. We are big into wood stoves, fireplaces and stoves. Wood sales are very good. Having trouble getting product right now, two to three months delivery on lots of units. Have never handled pellet stoves, but we are getting so many calls that I am bringing some in. Actually, it’s pretty exciting right now.”


Stock Watch

COMPANY – EXCHANGESYMBOL52 WEEKWeek Ending% CHANGEMARKET CAPITALIZATION
    High Low 31-Oct-14 28-Nov-14 4 Week 26 Week 52 Week ($000,000)
HNI Corporation (a) HNI 48.80 31.00 46.65 46.94 0.6% 25.4% 18.4% $2,083.0
Pool Corporation (b) POOL 62.84 51.61 59.70 59.41 -0.5% 2.9% 6.0% $2,560.0
Restoration Hardware Holdings (a) RH 94.50 54.61 80.32 84.47 5.2% 27.1% 11.9% $3,320.0
Wayfair, Inc. (a)(c) W 39.43 20.91 25.10 24.26 -3.3% NA NA $1,830.0

(a) = New York Stock Exchange
(b) = NASDAQ
(c) = Wayfair, Inc. issued their initial public offering on October 1, 2014. Shares are trading on the New York Stock Exchange under the ticker symbol W. We will include respective data points as they occur.


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