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Hearth & Home September 2014

2014 July Business Climate


July Retail Sales

In early August, Hearth & Home faxed a survey to 2,242 specialty retailers of hearth, barbecue and patio products, asking them to compare July 2014 sales to July 2013. The accompanying charts and selected comments are from the 183 useable returns.


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Weather Report

Consumer Confidence

Stock Watch


It was the highest percentage of hearth retailers reporting month/year over month/year sales gains since October 2013 (82%).


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

Sales of hearth products continued their impressive run in July, making it now 19 consecutive months of positive month/year over month/year sales gains. Patio furnishings, barbecue products and spas/hot tubs were all on the plus side for the second month in a row.


Retailer Comments

Northeast

Connecticut: “WOW! Last year’s long, cold winter made a huge impact. Had to add additional salesperson to get ready for the ‘real’ season. Bring it on. Pellet stoves strongest.”

Massachusetts: “Summer has been busy again for us this year. Things trending the right way as we head into the busy season.”

Massachusetts: “We have seen consumers shopping early for hearth products. With such a long and cold winter last year they are preparing for this year sooner. New Englanders are hardy people with many heating options.”

New Hampshire: “Pellet sales leading the way, but wood and gas not far behind. Out two to three weeks on installs in August.”

Pennsylvania: “Total sales down 12 percent. Not a concern, just adjusting June and August, it will average out positive. Still miscellaneous projects to be completed for the start of the season.”

Pennsylvania: “Weather rainy almost every other day slowed sales. Prices of outdoor furniture are high. Seems economy is not very solid. High-end sales are good. Regular sales $800-1,000 are hit the most.”

Pennsylvania: “Very strong sales in wood and gas inserts. Most customers are still talking about last year’s harsh winter and their heating bills. Interest in fireside chat pits and outdoor fireplaces is beginning to slow but not by much.”

Pennsylvania: “Unbelievable sales in pellet stoves and fuel. Everyone is buying early due to last winter. All indications are of a very strong year.”

Vermont: “Best July ever, so looking forward to a good year. But we are keeping in mind that one bad week in October (remember 2008) can erase any hope for a good year.”


Weather Report

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

Both Arkansas and Indiana posted their coldest July since 1895, while six western states experienced much above normal readings.

The heat was in the West during the three-month period from May to July. Washington, Oregon, California and Nevada all had temperatures that were much above normal.

While Montana, South Dakota and Alabama experienced much-below normal precipitation, the New England states of Maine, New Hampshire, Vermont and Massachusetts were hit with much-above normal readings.

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South

Arkansas: “Finally getting decent wood retail sales. People remember last winter.”

Florida: “Very strong second half of July.”

Louisiana: “Real estate sales have improved which has resulted in outdoor furnishing sales. Milder summer temperatures have also contributed to an increase in sales.”

Oklahoma: “Second best July ever! Indications are we are going to have a fantastic fall season. Manufacturers, please be ready!”

Tennessee: “Best July ever! Wish I could attribute it to my good looks but, I’m sure it was two weeks of abnormally cooler weather and very few days of stifling hot (don’t want to leave A/C to go look at a grill) weather.”

Tennessee: “Patio sales were finally up a little for the first time versus 2013. But man did we kill it in 2013. Fireplace sales have helped us along all year long. Gas sales are down a bit too, but boy we are still having a very respectable year.”

Midwest

Michigan: “Summer has been steady. Looking forward to a great hearth season. Three stores now up and running.”

Michigan: “Strong stove sales all through the summer; looking forward to a better than average fall season. Spas/Hot Tubs still holding their own.”

Missouri: “Best July we’ve had in 10 years!”

Missouri: “Late month sales surge in hearth products. Mild weather seems to help. Barbecue sales continued weak all season. Stage seems to be set for a good fall selling season for hearth.”

Minnesota: “Builders are active. New houses and lots of remodels.”

Ohio: “A poor gas grill season was somewhat salvaged by high-end new construction hearth sales. We’re on pace to break our sales record of 2010 by 30 percent!” Ohio: “Have seen strong interest and sales of wood and pellet stoves most of the summer. A good sign for the fall and winter seasons.”

Ohio: “July sales are up 40 percent from last year. Wood/Pellet stoves are selling and also seeing customers getting their chimney serviced early this year.”

Wisconsin: “July continued a very strong year. Locally, there’s a lot of new construction and remodeling. Echoes of $7 gallon of propane last winter has customers wanting alternatives.”

Wisconsin: “So grateful to be so busy. New construction and remodeling are up. After such a long, cold and snowy winter people are adding, changing, making improvements to their heating systems, fireplaces, supplemental heat systems. Working hard to stay caught up and it’s not even fall yet.”


Consumer Confidence

The Conference Board Consumer Confidence Index, which had improved in June, increased in July. The Index now stands at 90.9 (1985=100), up from 86.4 in June. Says Lynn Franco, director of Economic Indicators at The Conference Board: “Consumer confidence increased for the third consecutive month and is now at its highest level since October 2007 (95.2).”

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: “Monsoon season hitting us hard up north, definitely bringing in customers!” California: “I know it’s all relative but it sure looks good on paper. With a few months of hard work, it all came together in July!”

California: “Great month for fireplaces. Islands do very well. We’ve been hearing about southern California’s problems in the hearth industry; we’ve switched our focus to direct-vent units and contractor-based sales have been brisk.”

Oregon: “Very good month for stove sales. Did not expect to do nearly as well in July. August coming up, who knows? Hoping for a great year.”

Washington: “July was hotter than normal and began earlier.”

Washington: “Busy July!”

Canada

British Columbia: “WOW! What a summer! HOT MONTH. Fireplace sales dropped 40 percent as it has been a really hot summer. Barbecue sales up 65 percent over last year and last year was a really strong year! Consumer confidence is rising quickly.”

Newfoundland & Labrador: “Very hot temperatures in Atlantic Canada in July. Sales up substantially on hearth during the summer! Not sure what this means for the fall selling season.”

Ontario: “Started off with a bang the first two weeks and slowly petered down.”

Ontario: “Principal wood sales are up. Gas sales are down (we mostly sell propane units).”

Ontario: “Cool weather, people don’t want to sit outside with a jacket on.”

Ontario: “A little hard to get ahead in Ontario, no real warm weather this year.”

Saskatchewan: “Slow spring this year with lots of flooding, so homeowners are dealing with this. Showroom is starting to show signs of life again in the last two weeks of July. Looking forward to a busy fall. Bring on the cool weather.”


Stock Watch

COMPANY – EXCHANGESYMBOL52 WEEKWeek Ending% CHANGEMARKET CAPITALIZATION
    High Low 27-June-14 25-July-14 4 Week 26 Week 52 Week ($000,000)
HNI Corporation (a) HNI 40.43 31.00 38.96 36.21 -7.1% 1.9% -6.9% $1,627.6
Pool Corporation (b) POOL 62.84 50.58 57.81 55.46 -4.1% 0.3% 4.9% $2,443.6
Restoration Hardware Holdings (a) RH 94.50 54.61 92.37 84.28 -8.8% 42.9% 26.4% $3,318.1

(a) = New York Stock Exchange
(b) = NASDAQ
(d) = OTCQB


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