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Hearth & Home November 2018

2018 September Business Climate


September Sales

In early October, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare September 2018 sales to September 2017. The accompanying charts and selected comments are from the 2,003 useable returns.


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Weather Report

Consumer Confidence

Stock Watch


MONTH-TO-MONTH

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

Spas remain on a roll, with 77% of retailers posting an UP month in September. That was followed by Hearth retailers, with almost half (48%) having an UP month.


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

In September, Spa retailers posted a 7% increase over the same period in the previous year; Hearth retailers followed, but with only a 3% gain.



Retailer Comments

Northeast

Connecticut: (Hearth) “The month started out strong, then fizzled. With the price of oil rising, we thought we would end up strong. We'll have to wait and see. Strong traffic though. Maybe the tariff causing the price of steel to increase is the problem. Not sure.”

Connecticut: (Hearth) “Sales are up nicely and all indivators appear to mean a good selling season, but as always we are expecting the unexpected.”

Delaware: (Hearth, BBQ) “Even though sales in 2017 were down for the year, there was a nice spike in September 2017. We believe it was mainly due to a sale our stove manufacturer generally has, but did not have this year – 2018. That explains the decrease in sales for September 2018. We tried to do sales to make up for the difference, but of course, this eats into our profit margins.”

Maryland: (Hearth, Patio, BBQ) “RAIN – RAIN – RAIN. There are no other specialty patio retailers in our area, so we compete with BJ's, Costco, Sam's Club, and Lowe's. In September we usually have some decent sales when the mass merchants clear out their patio products, but this September the store count of patio customers dwindled dramatically!”

New York: (Hearth, Spas) “Following 24 days that saw rain in September, we are considering development of a side business of ark construction. The slowly but surely rising prices of natural gas and propane has led to an uptick of interest in pellet stoves here in the Northeast. Staffing continues to be a challenge, with absenteeism at the top of our concerns. The extremely low unemployment rate has led to higher wages for skilled installers. Finally, supplier prices are going up and up and up. Most quotes now are only guaranteed for 10 days. Vent pipe in particular has been brutal.”

Pennsylvania: (Hearth, BBQ) “I truly believe our current administration in Washington has helped to turn things around. I saw nothing but decline for over four years, and we are now bouncing back in a big way. Even my employees have a more positive outlook.”


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.

Nationwide, it was the fourth hottest September since 1895. In September, seven states posted Record Warmest temperatures – Arizona, Utah, Florida, Ohio, West Virginia, maryland, and Delaware.

It was the fifth warmest July – September throughout the contiguous U.S. in 124 years. In the three-month period July to September, 11 states experienced Record Warmest weather – California, Nevada, Utah, Arizona, Colorado, New York, Rhode Island, Massachusetts, Vermont, New Hampshire, and Maine.

In September, both Texas and West Virginia experienced Record Wettest precipitation, while precipitation in five western states – California, Nevada, Idaho, Utah, and Wyoming – was at Much Below Average levels.

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South

Arkansas: (Hearth) “Disappointed in this month's sales due to warmer weather, schools starting up, county fairs, etc. Folks are just not interested in buying hearth products. Come on, cold weather!”

Florida: (Hearth, Patio, BBQ) “Sales have been strong up until the end of September, but early October sales are showing a decline.”

North Carolina: (Patio) “Luckily we avoided an expected direct hit from hurricane Florence, but the rest of the state was not as fortunate. The extended lousy weather didn't help business – but how can we complain?”

Tennessee: (Hearth, Patio) “Our grill sales, especially gas grills, did very well!”

Texas: (Hearth, Patio, BBQ) “Last year was a record year. This year is tracking well ahead, driven by very high-end gas fireplaces and other fireplace products. Patio is OK, but there are literally a dozen new players in the market. The tickets are larger, but further apart. Grills were strong in spring but much softer now. Kamado-type smokers have faded drastically, once again there are many players that have entered the new market. I think we must adjust to a new normal market.”

Texas: (Hearth, BBQ) “We did not have a slow season this year. Our best sales month ever was this past July. We are looking forward to another record breaking year.”

Virginia: (Hearth, Patio, BBQ) “This has been the busiest September in a very long time! People are buying – Kha-Ching $$$! I'm in fireplace heaven right now. LOL.”

Virginia: (Hearth) “After two months of rain and more rain, there was a recent two week pause which was good as some home starts were able to get underway. Just as things started to look up, 10 tornadoes struck in one day throughout the areas we serve. Sadly, there was one fatality from these twisters, and lots of property damage. Since then, we have enjoyed beautiful weather and home starts and regular retail sales have increased a bit. We're praying this will continue and cold weather will be here soon – and customers will want to stay warm.”

Midwest

Illinois: (Hearth) “We have been busier with log sales this year and not so much with fireplaces and inserts.”

Indiana: (Patio, BBQ, Spas) “Our two stores have maintained an average year, so far nothing to brag about. We had a fairly nice summer once the cold weather went away; our last freeze was April 30. This was about a month later than normal, so the season started out slow and hasn't been anything outstanding so far for the retail side. Now my in-ground pool sales, renovations, and service department have been outstanding. I just wish we could get our hands on some qualified help! Next year looks just as good given all of the signed contracts we already have booked.”

Iowa: (Hearth, BBQ) “Seems to be quite a bit more interest in the pellet stove line compared to last year.”

Michigan: (Hearth) “Sales are up with new construction, early-buy, and homeowners' purchases of gas inserts and gas fireplaces due to remodeling.

Michigan: (Spas) “Amazing summer with great weather, trying at times because of poor summer fill-in help. All the year-round people did an amazing job. Staff got beat up pretty good; consumers are getting tougher and demanding more. It made for an interesting 150-day season. Having merchandise stacked up deep and ready to go was key to our successful summer.”

Ohio: (Hearth, BBQ) “Foot traffic has finally picked up. After a long summer of slow sales for grills and hearth remodeling projects, it feels good to have busy showroom floors again. We need a really good fourth quarter to catch up with the numbers form our record-setting sales in 2017. Direct-vent inserts are once again taking sales away from vent-free gas logs with glass doors. Gas products overall seem to still be the high demand item. Not a whole lot of people are asking for wood.”

Wisconsin: (Hearth, Patio, BBQ) “New construction is at a 30-year high, most homes are getting four to five units. The more costly, the easier it is to sell.”


Consumer Confidence

The Consumer Confidence Index increased in September, following a large improvement in August. The Index now stands at 138.4 (1985=100), up from 134.7 in August.

"After a considerable improvement in August, Consumer Confidence increased further in September and hovers at an 18-year high," said Lynn Franco, director of Economic Indicators at The Conference Board. "The September reading is not far from the all-time high of 144.7 reached in 2000.

"Consumers' assessment of current conditions remains extremely favorable, bolstered by a strong economy and robust job growth. The Expectations Index surged in September, suggesting solid economic growth exceeding 3.0% for the remainder of the year. These historically high confidence levels should continue to support healthy consumer spending, and should b welcome news for retailers as they begin gearing up for the holiday season."

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

Alaska: (Hearth, BBQ) “Unusually warm summer in southeast Alaska lasted into October, but didn't slow down stove sales in all categories; oil stoves are making a comeback, but wood and pellet are still selling strong.”

California: (Hearth, BBQ) “Last year in September there was a major fire in our area, 5,500 homes burned. Now we have a major rebuild.”

California: (Hearth, Spas) “Lots of fireplace business this summer/early fall. The general public is positive about the economy, the stock market, etc., but have not forgotten the last recession. We're hoping for a wet/cold winter. Business is up on all products, including spas which because of our drought conditions, has been a challenge.”

California: (Hearth) “This year and for the past four years has seen a steady increase; we have added two more employees in that time. No advertising for almost a year and we're still going crazy; installs are scheduled out to Thanksgiving.”

Colorado: (Hearth, Patio, BBQ) “It's hard to compete with the Box stores, especially on outdoor products.”

Oregon: (Hearth) “Business is up for September, which is very refreshing.”

Canada

British Columbia: (Hearth, Patio, BBQ, Spas) “September was cool and wet, this put a real damper on barbecue and patio product sales. Gas fireplaces are up; hot tub sales are up a little. Overall, it was a decent month.”

British Columbia: (Hearth) “Strange year in that the phone started ringing in July, that's about 2 1/2 months earlier than usual. Half wanted to book service/sweeping and the other half wanted to buy wood or pellet units, installed.”

British Columbia: (Hearth, BBQ) “Wood stove and fireplace sales have kept us consistently busy. We thought we had bookde enough chimney for most of the year, but we have had to reorder almost as much as we had booked.”

Ontario: (BBQ) “2018 will be a record year for us. The pendulum of consumer demand is slowly swinging back to independent, full-service dealers. The onus is on all of us to keep the consumer coming to the independent dealer.”

Ontario: (Hearth) “Second best September in our 30-year history. Extremely busy, on the floor and doing quotes. Selling mostly gas, but a strong wood component too.”

Ontario: (Hearth, BBQ) “In September, new orders were up about 10%, indicating that the season has started. Overall we are up 5% YTD. Let's hope the trend continues.”

Ontario: (Hearth, Patio, BBQ) “We had major highway reconstruction last year which affected our business. This year's weather was more cooperative in regards to barbcue sales. Our sales were up enough this year to put a smile on our faces.”

Ontario: (Patio) “Not sure how we can explain why we're down. It's not a weather factor. The economy is supposedly very good. Maybe it's due to new players in our market: Wayfair, Costco, online and others.”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 31-Aug-18 28-Sep-18 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 2,929.67 2,581.00 2,901.52 2,913.98 0.4% 10.3% 15.7%  
HNI Corporation (b) HNI 45.40 31.16 44.10 44.24 0.3% 22.6% 6.7% $1,840.00
Pool Corporation (c) POOL 175.87 109.56 164.26 166.88 1.6% 14.1% 54.3% $6,240.00
Restoration Hardware (b) RH 164.49 71.78 159.00 131.01 -17.6% 37.5% 86.3% $2,460.00
Wayfair, Inc. (b) W 151.20 55.33 135.17 147.67 9.2% 118.7% 119.1% $11,580.00

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.

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2018 June Business Climate

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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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