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Hearth & Home January 2018

2017 November Business Climate


November Sales

In early December Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare November 2017 sales to November 2016. The accompanying charts and selected comments are from the 214 useable returns.


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Weather Report

Consumer Confidence

Stock Watch


MONTH-TO-MONTH

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

In November, the majority of Hearth retailers (53%) were UP in sales, while only 43% of Spa retailers, 19% of Barbecue retailers, and 15% of Patio retailers were UP.


YEAR-TO-DATE

RETAILER SALES – U.S. AND CANADA
January 1 – November 30, 2017 vs. January 1 – November 30, 2016

Sixty percent of Hearth respondents told us they were UP in sales on a Year-to-Date basis; 54% of Spa retailers were also UP, but only 34% of both Patio and Barbecue retailers could say the same.


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

In November, sales of Hearth products were up 7%, Spas were up 3%, and Patio furnishings were up 2%. Barbecue sales, however, were down 1%.


Retailer Comments

Northeast

Connecticut: (Hearth) “Regarding November sales, down for November from previous year but up a few for the year-to-date. Gas logs up as well. Still no urgency really.”

Delaware: (Patio) “Traffic is lighter.”

Maine: (Hearth, Patio, BBQ) “The onset of cooler weather is fueling strong demand in all heating products except pellet, which remains flat.”

New Hampshire: (Hearth, BBQ) “Warm outside...”

New York: (Hearth) “November sales are down and year-to-date also down because of re-certification for EPA and NYSERDA.”

New York: (BBQ, Spas) “Factory financing program and year-end clearance sales worked well this year.”

New York: (Hearth, Patio, BBQ, Spas) “Hearth sales are down. It has been a surprise. Traffic has been light.”

New York: (Hearth, Patio, BBQ, Spas) “Very strong, good quality traffic. It has slowed down the last 10-14 days.”

Pennsylvania: (Hearth, BBQ) “Investments made during the 2008 downturn and the years that followed have PAID OFF today. Tough pill to swallow to get better.”

Pennsylvania: (Hearth, Patio, Spas) “We are in the Christmas-buy now and sales are up 18%.”

Pennsylvania: (Hearth) “November sales helped make this a good year. December is booked full on installation work. Only cash-and-carry sales can be handled at this time.”


Weather Report

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

In November, the gang of four (Arizona, New Mexico, Utah and Colorado) posted Record Warmest temperatures, while California, Nevada, Wyoming, Oklahoma and Texas experienced Much Above Average temperatures.

In the three-month period from September to November, Maine, New Hampshire, Massachusetts and Connecticut in the East, and Arizona and New Mexico in the West, all had Record Warmest temperatures. With the exception of Idaho, Montana and North Dakota, every state had Above Average temperatures.

In November, 10 states recorded precipitation that was Much Below Average; they were Arizona, Oklahoma, Louisiana, Arkansas, Missouri, Mississippi, Alabama, Georgia, Connecticut and New Hampshire.

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South

Arkansas: (Hearth) “Retail is still struggling from warm weather, drought and people not wanting to spend money. Lots of job quotations, but very few commitments right now. Budgets are tight.”

North Carolina: (Patio) “Unseasonably warm weather has extended the season beyond our expectations.”

Virginia: (Hearth, Patio, BBQ) “Very busy month. Much more than this time last year!”

Midwest

Michigan: (Spas) “November another bang up month – hot tubs, pool tables and even above-ground pools. I’m convinced the summer advertising in our market propelled sales. Tire kickers came back to buy. Hat’s off to my staff. They do a terrific job staying in touch with lookers and reeling them back to buy. Units and dollars up for the year, margin slipped a little. The increase in gross dollars is great – so I can handle the hit on margin.”

Ohio: (Hearth, BBQ) “The fall in Northeast Ohio was too warm to inspire anyone to plan ahead for the winter. Cash flow was horrible. Once the cold air hit, the phone would not stop ringing. From service calls to remodeling projects, it felt like we booked up almost through Christmas overnight. ‘Tis the season to be busy!”

Wisconsin: (Hearth) “Very strong year. Sales strong early in the year. Limitation is installation staff. Even though month-to-month sales are down, year-to-date is very strong. Strong wood-burning sales dominated by fireplaces not stoves.”

Wisconsin: (Hearth, BBQ) “Good month, did some longer jobs where the billings will be done in December. We have been grateful for the milder temperatures – it has allowed us to do additional exterior jobs.”


Consumer Confidence

The Consumer Confidence Index, which had improved in October, increased further in November. The Index now stands at 129.5 (1985=100), up from 126.2 in October.

“Consumer confidence increased for a fifth consecutive month and remains at a 17-year high (November 2000, 132.6),” said Lynn Franco, director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved moderately, while their expectations regarding the short-term outlook improved more so, driven primarily by optimism of further improvements in the labor market.”

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

Arizona: (Hearth, Patio) “The weather is killing us – more 80 to 88 degree days on Wednesday through Saturday killed the sales.”

California: (Hearth, Patio, BBQ, Spas) “November sales were down quite a bit. It’s been unseasonably warm and dry, no rain at all. We’re optimistic, and there’s still time to make up the difference.”

Nevada: (Hearth, BBQ) “Merry Christmas.”

New Mexico: (Hearth, Spas) “Slow start, due to weather.”

Washington: (Hearth) “Busiest year ever!”

Canada

British Columbia: (Hearth, BBQ) “Mild weather has bought unorganized people more time to buy hearth!”

British Columbia: (Hearth, Patio, BBQ, Spas) “October was good but November was great; it was the biggest November ever, up 20% year-over-year. This put an exclamation point on a fantastic 2017 as it’s the end of our fiscal year, up 30% for the year! We can only hope 2018 brings more of the same.”

Ontario: (BBQ) “Sales are down about 37% – however, gross margin is up almost 2% and season-end inventory is lower – not a bad year.”

Ontario: (Hearth) “November is the new October.”

Ontario: (Hearth, BBQ) “Sunny and unseasonably warmer than normal resulted in slower fireplace foot traffic, but somehow we held our own.”

Ontario: (Hearth, Patio, BBQ) “October sales for hearth were flat due to unusually warm weather. November made up for that.”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 3-Nov-17 1-Dec-17 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 2,642.22 2,191.08 2,587.84 2,642.22 2.1% 8.3% 20.5%  
HNI Corporation (b) HNI 56.94 31.16 33.74 34.24 1.5% -24.4% -34.4% $1,490.00
Pool Corporation (c) POOL 124.26 88.65 121.30 126.84 4.6% 3.6% 27.0% $5,220.00
Restoration Hardware (b) RH 107.48 24.41 86.79 101.97 17.5% 139.7% 193.4% $2,170.00
Wayfair, Inc. (b) W 84.19 34.30 67.50 70.23 4.0% 3.0% 89.2% $6,320.00

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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