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Hearth & Home August 2018

2018 June Business Climate


June Sales

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.


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Weather Report

Consumer Confidence

Stock Watch


MONTH-TO-MONTH

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

Retail Sales Up, Down, No Change comparison, this month versus one year ago

In June, 34% of Hearth retailers reported that sales were down from June 2017. Contrast that with the 6% of Spa dealers who said they were down from the same month in 2017.


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

Hearth Retail Sales Change over 13 months Patio Retail Sales Change over 13 months Barbecue Retail Sales Change over 13 months Patio Retail Sales Change over 13 months

In June, all sales in four categories (Hearth, Patio, BBQ, Spas) were up. Most notable is that sales of Spas were up by an average of 13%.


YEAR-TO-DATE

RETAILER SALES – U.S. AND CANADA
January 1 – June 30, 2018

For the period January 1 to June 30 2018, 58% of Hearth retailers are UP, 53% of Spa retailers are UP, 28% of Barbecue retailers are UP, and 27% of Patio retailer are UP.


Retailer Comments

Northeast

Connecticut: (Hearth) “You would think with the spike in oil that we would see more floor traffic. With last year’s long winter and higher oil prices we’re hoping for a good season this year. Wait and see.”

Maine: (Hearth, Patio, BBQ) “Warm summer weather has temporarily slowed demand for stoves and fireplaces. Seasonal service and repair requests are leading sales.”

New Jersey: (Hearth, Patio, BBQ) “No change from last June, which was solid. Time to make some changes – positive outlook! Always thankful!”

New York: (Hearth, Patio, BBQ) “Some good talking, but not much action.”

New York: (Hearth, Patio, Spas) “Holy Hanna, it is HOT, HOT, HOT in Upstate New York! (Gotta turn up the air conditioner to simulate cold weather!) Tough to sell more heat!”

New York: (Hearth, Spas) “Sales are steady.”

Pennsylvania: (Hearth, Patio, BBQ) “Late spring held back early orders on both furniture and grills. When warm weather finally started in May, many suppliers did not have inventory to ship quickly enough. Fortunately, our hearth sales were able to make up the difference for us.”

Pennsylvania: (Hearth, BBQ) “The fourth of July is the turning point each year. Customers are thinking about supplemental heating. We’re predicting a successful fall.”


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 June, most of the country was subject to Above Average to Much Above Average temperatures, with the exception of nine northeastern states and two states in the northwest.

For the three-month period April - June, New Mexico was the only state to reach a Record Warmest month, but Arizona and Utah came mighty close.

In June, only one state reported Much Below Average precipitation, but three states – Iowa, Indiana, and Kentucky – experienced Much Above Average precipitation.

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South

Arkansas: (Hearth) “Record breaking warm month just shut down sales and floor traffic for this month. Customers want A/C, not heaters. Oh well, welcome to retail.”

Arkansas: (Hearth) “Good month overall – no major changes.”

Florida: (Hearth) “More high-end fireplace sales than usual.”

Kentucky: (Hearth, Patio) “Outdoor kitchen and fireplace design, construction, and installation interest and sales have increased over 2017. And due to the increase in new construction and remodel, we’ve seen an increase in EPA wood-burning fireplaces and freestanding wood-burning stoves over last year, and the heat index has been off the charts!”

North Carolina: (Hearth, BBQ) “Sales have been great. They have been great for a while. I pray it continues. My biggest problem is finding help. If anything, that is slowing us down from more sales.”

Virginia: (Hearth, BBQ) “Flat, slow month (heat wave) for June.”

Virginia: (Hearth) “Three months of rain simply destroyed business, and that includes new home construction. In the month of May alone, we had 24 days of rain which caused flooding throughout the area we have served for 18 years.”


Midwest

Illinois: (Patio) “We had near record heat and rainfall in June. In spite of that we had record sales for June. It makes us wonder, what if it had been nice? Woven and teak continue to be strong categories for us. Seating is growing even more.”

Illinois: (Hearth, Patio, BBQ) “Sales were good; weather was a little strange, but Father’s Day was great!”

Indiana: (Hearth) “June sales were up because of new construction rebounding in our area and the retail customer was still buying gas inserts! Made up for the sluggish February.”

Ohio: (Hearth, BBQ) “Even though the weather was cooler than normal, grill sales started off strong in April. However, May and June have been significantly down. Fireplace remodeling projects are just as slow as grill sales. Strange and disappointing fourth quarter to say the least.”

Michigan: (BBQ) “May and June were up this year. Customers say it’s because of Trump that they are out spending money. Can’t complain if that is the reason.”

Missouri: (Hearth, BBQ) “The winter months produced strong heating sales into April, with continued cold and wet weather. However, May and June have been soft. June has been especially weak. The economy seems to be strong but the new construction side of things has yet to produce sales to mirror that perception. “Our heating sales are still up overall for the year, but we need to reverse the current trend to maintain a lead. Barbecue sales are very strong this year, particularly in the pellet models. Sales of charcoal are soft. Gas units are flat. Pellet grills are where all the growth is. The Big Box stores are carrying more pellet models, so let’s see if the opportunities continue. There is enough consumer awareness for the pellet units that selling someone on pellet technology is no longer a hurdle. It is now a decision based upon brand awareness, features, online reviews, and price.”

Wisconsin: (Hearth, BBQ) “We are cautiously optimistic. Very busy and, of course, with that business we plan to have deliveries, installations, and timetables to happen flawlessly (Who am I kidding?). But work goes on.”

Wisconsin: (Hearth, Patio, BBQ) “This is the best year in 30 years, but it would be greater if we could find help; no one in our community can find help.”

Wisconsin: (Hearth, Patio, BBQ) “Busy, slow, steady! Jobs keep coming in even with temps in the 90s. Should be a good fall by the sound of things with builders and new construction, as well as remodels.”


Consumer Confidence

The Consumer Confidence Index decreased in June, following an increase in May. The Index now stands at 126.4 (1985=100), down from 128.8 in May.

According to Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of present-day conditions was relatively unchanged, suggesting that the level of economic growth remains strong. While expectations remain high by historical standards, the modest curtailment in optimism suggests that consumers do not foresee the economy gaining much momentum in the months ahead.”

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, Patio, BBQ, Spas) “Another month of overall sales down. We don’t think it’s us: no winter, several wildfires, and prices trending upward.”

California: (Hearth, Spas) “The economy is strong here and homeowners have many options to get a home equity loan for remodeling. The only drawback to that is the general public has more money to spend on travel, which limits our holiday traffic. In general, sales are up in all categories.”

California: (Hearth) “Dollars down, sales not. We are aiding all homeowners who are rebuilding from the devastating fires in northern California by giving big discounts. Our profit has been cut in half. We are helping our neighbors.”

California: (Hearth, BBQ, Spas) “It’s crazy busy this past month with the change-out in the area. We are scheduled into August and keep getting more calls for estimates. We would love to have another crew, but there are no qualified applicants to fill the positions.”

Colorado: (Hearth) “In light of the fact that we had no winter here in southwest Colorado, and June sales are up, I’m optimistic. If we do get a normal winter cycle this year, the possibility is for a 10-15% increase in sales for the 2018-2019 heating season.”

Washington: (Hearth) “More activity and sales.”


Canada

British Columbia: (Hearth, Patio, BBQ, Spas) “We had January weather for most of the month, slowing sales from previous months. A pick up in the last week propelled us to a decent month, but it’s still quite a bit slower than the two months prior.”

British Columbia: (Hearth) “Lots of phone calls regarding availability and pricing. Some on site visits and price quotes. Far more interest in solid fuel heating this year than in the past four years.”

Newfoundland/Labrador: (Hearth, Patio, BBQ) “Bad spring weather killed it for us.”

Ontario: (BBQ) “After a slow start in March and April, May and June have been great. Year-to-date sales are up 10%.”

Ontario: (Hearth, BBQ) “The last couple of months have been dead!”

Ontario: (Hearth, BBQ) “Economy –weather – Big Box stores – all contributed to consumers not spending. We’re selling nothing but big ticket items to a small percentage of the population.”

Ontario: (Hearth, BBQ) “Held our own despite the competition giving up margins. Can’t anyone SELL anymore?”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 1-Jun-18 29-Jun-18 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 2,872.87 2,409.75 2,734.62 2,718.37 -0.6% 1.7% 12.2%  
HNI Corporation (b) HNI 43.42 31.16 36.79 37.20 1.1% -3.6% -6.7% $1,670.00
Pool Corporation (c) POOL 157.52 97.25 141.82 151.50 6.8% 16.9% 28.9% $6,110.00
Restoration Hardware (b) RH 164.49 44.00 98.27 139.70 42.2% 62.0% 116.5% $3,000.00
Wayfair, Inc. (b) W 119.84 55.33 94.99 118.76 25.0% 48.0% 54.5% $10,330.00

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 August Business Climate

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.

» Continue

2018 July Business Climate

In early August, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare July 2018 sales to July 2017. The accompanying charts and selected comments are from the 193 useable returns.

» Continue

2018 May Business Climate

In early June, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare May 2018 sales to May 2017. The accompanying charts and selected comments are from the 219 useable returns.

» Continue