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Hearth & Home August 2019

2019 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 2019 sales to June 2018. The accompanying charts and selected comments are from the 204 useable returns.


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Weather Report

Consumer Confidence

Stock Watch


MONTH-TO-MONTH

RETAILER SALES – U.S. AND CANADA
June 2019 vs. June 2018

The percent of retailers who were UP in sales in June is less than stellar. Hearth retailers led the way with 44% telling us they were UP, however, the other three categories weren’t quite as successful – 32% of Patio retailers, 30% of Spa retailers, and only 21% of Barbecue retailers were UP.


13 MONTH YEAR-OVER-YEAR RETAILER SALES
June 2019 vs. June 2018

In June, Patio retailers led the way with sales being UP 6%. Sales of both Hearth products and Spas were UP 4%, and Barbecue sales were DOWN 2%.



Retailer Comments

Northeast

Connecticut: (Hearth) “Slower summer sales but up 50% YTD. Expecting another strong year.”

Connecticut: (Hearth, BBQ) “We were up against a strong June last year and are holding our own. It’s hard to predict what the rest of this year is going to look like. Even though the weather has drastically improved, the political climate here in Connecticut has not. Once we get into the busy fall season, we would be happy with a 5% increase overall for the year.”

Connecticut: (Hearth, BBQ) “The weather has cleared up nicely and business is steady but not great. Waiting on our season to get closer so that we start doing some real revenue. The nature of the beast I guess.”

New Hampshire: (Patio, BBQ) “June patio sales picked up from April and May, but not enough to cover what we missed in special orders. The weather has been crappy for the spring and early summer in New England. Very cold and rainy here.”

New Jersey: (Hearth, Patio, BBQ) “Our company’s steady growth continues. Hearth products remain our focus, and keeping customers completely satisfied.”

New York: (Hearth, Spas) “Hot tub traffic was really slow in June perhaps because 18 out of 30 days that month had rain. On the other hand, we also noticed more hearth shoppers than usual for this time of year. The people who are buying are spending on higher-end units.”

New York: (Hearth) “We’re finding more and more Internet sales interfering with our sales. Customers come in to learn about the products then purchase online. We have noticed this more this year than in past years. Another issue we’re finding is that when your company is set up to be exclusive on a product, other distributors find ways around you. They are selling to non-authorized dealers. This is sad when you pay for your staff to become educated on a product, and others find a way around it. We receive calls from these customers when there is no one to service and the units have been installed incorrectly.”

New York: (Hearth) “Many customers order in June for a later delivery or pick-up date. So the monthly income often does not always reflect the actual yearly income.”

Pennsylvania: (Hearth) “Fiscal year ends June 30 and we are up 25%. Best year in last five years.”

Pennsylvania: (Hearth, Patio, BBQ) “Finally getting some sunny weather, and that has helped our outdoor product sales. Markdowns of leftover wood stoves that don’t meet 2020 have helped move some product. Gas fire pit sales have been almost non-existent, probably due to all the rain we’ve experienced over the last 13 months. Pellet pricing is really climbing, so that will probably have an affect on pellet stove sales this year.”


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, Delaware and Florida both posted Much Above Average temperatures, while Washington, Oregon, California, Alabama, Maryland, New Jersey, Connecticut, Rhode Island, and Massachusetts were at Above Average temperatures.

For the three-month period of April, May, and June, Much Above Average temperatures were felt by those in Washington, Oregon, Florida, Georgia, South Carolina, North Carolina, Virginia, West Virginia, Maryland, Delaware, and New Jersey.

In June, only Ohio, Kentucky, and Tennessee experienced Much Above Average precipitation. It was the second wettest April - June in 125 years.

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South

Arkansas: (Hearth) “Horrible sales. No business.”

Louisiana: (Hearth) “Our system includes service with the merchandise. About half of our increase is due to increased service work.”

North Carolina: (Hearth) “Consumers are running scared and projects we get take much longer to set sail than the new norm of the past decade, which was slow.”

Oklahoma: (Hearth) “Would like to see more commitment from manufacturers and distributors to brick-and-mortar stores and fewer Internet sales.”

Texas: (Patio, BBQ) “Ceramic and propane grill sales were flat, but pellet grills were up.”

Texas: (Hearth, Patio, BBQ) “Tracking near last year but hard to compare what you ask for because our fiscal year ends March 31. Last year was a record year and we’re a nose ahead of same time. Nothing stands out, except fireplaces continue like it is fall. Stoves need to be doing the same!”

Texas: (Hearth, BBQ) “Hearth products were exponentially up last year due to post Harvey flood. This year is normal.”

Virginia: (Hearth, BBQ) “Very slow month.”

Midwest

Michigan: (Hearth) “Four very strong years in a row, 10-15% growth per year with 2018 the best in our 43-year history! Michigan’s economy started rebounding in 2012 and hasn’t looked back. Let’s hope a market correction doesn’t hit with an election year coming.”

Minnesota: (Hearth, BBQ) “The weather has hindered our new construction market. A very late winter and rainy spring means builders are behind.”

Nebraska: (Hearth, Patio, BBQ) “It was a tough season. The weather did not help.”

Ohio: (Hearth, BBQ) “Our march toward a new sales record for our three stores continues! We’re already in uncharted territory with two months left in our fiscal year. A combination of a hot economy and a vastly improved staff has unleashed the beast!”

Wisconsin: (Hearth, BBQ) “Great month for us, we’re booked almost six weeks out. Makes me nervous to have adequate help for fall.”

Wisconsin: (Hearth, Patio, BBQ) “June was very strong. Lots of traffic in store. People are buying. Our economy in the Midwest is rolling right along. New construction is at an all-time high. Two or three fireplaces is now the norm. Gas is king. Wood-burning is slow because of cheap gas prices.”


Consumer Confidence

The Consumer Confidence Index declined in June, following an increase in May. The Index now stands at 121.5 (1985=100), down from 131.3 in May.

“After two consecutive months of improvement, Consumer Confidence declined in June to its lowest level since September 2017 (Index, 120.6),” said Lynn Franco, senior director of Economic Indicators at The Conference Board. “The decrease in the Present Situation Index was driven by a less favorable assessment of business and labor market conditions. Consumers’ expectations regarding the short-term outlook also retreated. The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence. Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion.”

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: (Patio, BBQ) “Oct. 1, 2017 to Sept. 30, 2018 was our best 12 months in 46 years. Oct. 1, 2018 to Feb. 28, 2019 was off 25%. March and April were up over 2018 and May and June down. Did the new downturn begin 10 months ago?”

California: (Hearth, BBQ, Spas) “The weather is cooperating and things are looking to be just as busy or busier than last year. Brought in a new line of USA made pellet grills and they are flying out of the store.”

Washington: (Hearth, BBQ, Spas) “Busy this summer!”

Washington: (Hearth) “Sales are up from last year but still slower than expected. Several delays on new construction projects from backlogged permits and/or contractors not meeting their own deadlines. On the plus side, we expect those to provide for a strong July.”

Washington: (Hearth, BBQ) “Our sales have been up the last three years and we’re staying steady in the hearth market through the summer as well. We are a very small Mom-and-Pop business. We have a small retail store with two owners and one employee. We install and service what we sell (wood stoves and fireplaces, gas fireplaces and stoves, and pellet stoves). We’re in the Pacific Northwest region.”

Canada

British Columbia: (Hearth) “Sales inquiries by phone have dropped off somewhat. Bagged pellets may be in shorter supply in BC this coming season, as at least one manufacturer is switching to bulk pellets only.”

British Columbia: (Hearth, BBQ) “Weird year continues with barbecue sales virtually non-existent despite more promotions.”

British Columbia: (Hearth, BBQ) “Wood stoves and fireplaces are moving out quite well and we will soon see if our early-buys were estimated correctly. We had to reorder insulated chimneys several times in 2018, so we’re looking to see how accurate our early-buy estimates were.”

Ontario: (Hearth, Patio, BBQ) “Economy dead, and rainy weather keeping people off deck and not barbecuing. Trump not inspiring middle class to spend.”

Ontario: (Hearth, BBQ) “Unprecedented wet rainy weather dampened sales and enthusiasm. Looking forward to next barbecue season already.”

Quebec: (Patio) “Really late start in the season. Bad weather. Longer lead times from our suppliers - 4 to 6 weeks. Thirty-five percent U.S. exchange driving price up in Canadian dollars.”

Quebec: (Hearth, BBQ) “Quotes are about the same for June, but confirmations and installations have a slight decrease for hearth products.”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 31-May-19 28-Jun-19 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 2,954.18 2,351.10 2,752.06 2,941.76 6.9% 18.3% 8.2%  
HNI Corporation (b) HNI 45.40 32.79 33.16 35.38 6.7% 0.5% -4.9% $1,500.00
Pool Corporation (c) POOL 193.73 136.83 179.78 191.00 6.2% 29.2% 26.1% $7,550.00
Restoration Hardware (b) RH 162.10 84.11 85.15 115.60 35.8% -2.8% -17.3% $2,200.00
Wayfair, Inc. (b) W 173.72 76.60 144.01 146.00 1.4% 60.9% 22.9% $13,150.00

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

2019 August 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 August 2019 sales to August 2018. The accompanying charts and selected comments are from the 182 usable returns.

» Continue

2019 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 2019 sales to July 2018. The accompanying charts and selected comments are from the 206 usable returns.

» Continue

2018 October Business Climate

In early November, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare October 2018 sales to October 2017. The accompanying charts and selected comments are from the 232 useable returns.

» Continue

2018 September Business Climate

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.

» Continue