2016 October Business Climate

October Sales

In early November Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare October 2016 sales to October 2015. The accompanying charts and selected comments are from the 182 useable returns.

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Weather Report	Consumer Confidence	Stock Watch

RETAILER SALES – U.S. AND CANADA
October 2016 vs. October 2015


In October, 65% of Hearth retailers were Up or the Same, while 89% of Spa retailers were Up or the Same.

13 MONTH YEAR-OVER-YEAR RETAILER SALES
October 2015 Through October 2016

In October, Hearth and Patio sales were Up four and five percent respectively, while Barbecue sales were about even with last year (Up one percent), and Spa sales soared at 21%.

Retailer Comments

Northeast

Delaware: (Hearth, BBQ) “Hearth products are down mainly because of last years’ October strong sales, but it’s starting to pick up even with high 70s weather this week.”

Massachusetts: (Hearth) “Very busy season so far. Hopefully it keeps going.”

New Jersey: (Hearth, BBQ) “Bring on the cold. Light our pilots?”

New Jersey: (Hearth, Patio, BBQ) “Numbers were off a bit, but still solid and steady.”

New York: (BBQ, Spas) “Hot tub sales spectacular this year and this past month.”

New York: (Hearth, Patio, BBQ, Spas) “Hearth sales were a little slow at the start of October, but have picked up at the end and November looks great so far!”

Pennsylvania: (Hearth, BBQ) “Bidding is becoming more and more competitive. Always watching costs. Always listening to the customer. Sharpening our pencil.”

Pennsylvania: (Hearth) “Not selling much heat.”

Weather Report

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


With the exception of Oregon, Washington and Montana, in October, every state experienced temperatures that were Above Normal or Much Above Normal. New Mexico had its warmest month of October since recording began in 1895.


In the three-month period from August to October, only Washington and Montana had temperatures that were Near Normal. For Mississippi, Alabama, New Jersey, Connecticut, Rhode Island, Massachusetts and Maine, it was the warmest August to October on record.


In October, precipitation records were set in Washington, Idaho and Montana.

South

North Carolina: (Patio) “Good demand and unseasonably warm weather having a positive effect.”

North Carolina: (Hearth) “Let’s get past the elections and see if we can get back to some minimal sanity.”

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

Midwest

Michigan: (Hearth, BBQ) “Weather warm. A few cold nights. Ads are picking up traffic, phone and showroom.”

Michigan: (Spas) “Note to self – October 2020 take month off and go on vacation if 2020 election a repeat of 2016. Big ticket foot traffic off 50%. Big ticket sales off 50%. Small ticket sales and service made the month, so total sales are off slightly. The register did ring but the ring is much louder as the sale amount goes up with big tickets. “November 8 is Independence Day for retail. Hopefully, with new leader sales and traffic will go back to what we expect. Really believe it’s going to be a great holiday season. Then I can go back to just hating web sales.”

Michigan: (Hearth) “Down from last year. Warm October. Election year?”

Michigan: (Hearth) “In October we saw foot traffic like no other year. The weather in Michigan was still not cold but people were preparing for the cold weather to come. We can’t imagine what it will be like if it gets cold. Last month was the best month we have had in the business since we opened in April of 2009.”

Missouri: (Hearth, BBQ) “Unseasonable warm temperatures are negatively impacting wood stove sales. Fortunately, the new home market is strong, boosting the built-in wood and gas fireplace market.”

Wisconsin: (Hearth, BBQ) “Warm temps and low fossil fuel are a problem.”

Consumer Confidence

The Consumer Confidence Index, which had increased in September, declined in October. The Index now stands at 98.6 (1985=100), down from 103.5 in September.

“Consumer confidence retreated in October, after back-to-back monthly gains,” said Lynn Franco, director of Economic Indicators at The Conference Board. “Consumers' assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat. However, consumers' expectations regarding their income prospects in the coming months were relatively unchanged. Overall, sentiment is that the economy will continue to expand in the near-term, but at a moderate pace.”

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.

West

Arizona: (Hearth) “A busy spring/summer kept us so busy this year we got a lot of customers taken care of. Finally catching our breath!”

California: (Hearth, Patio, BBQ, Spas) “Weather still way too warm, but the ‘push’ now is to complete the fireplace before Thanksgiving arrives.”

Colorado: (Hearth) “Warmest Colorado October on record. Sales still up, but expect to flatten out because of the election results, etc. Our heads are above water and we are grateful. Hope the feeling stays. Bring on the cold and snow – we’re ready!”

Colorado: (Hearth, BBQ, Spas) “Unusually warm weather!”

Idaho: (Hearth) “Wood stoves, wood inserts and wood EPA fireplaces are showing most increase.”

Montana: (Hearth, BBQ) “Warmer than normal Fall.”

Washington: (Hearth) “Natural gas freestanding stove sales are up. Also freestanding wood stove sales are up. Construction up. New homes and remodeling projects still going strong.”

Washington: (Hearth, Patio, BBQ, Spas) “Busiest October yet!”

Canada

Ontario: (Patio) “Business has been OK. Done for season now. High U.S. dollar still hurting.”

Ontario: (BBQ) “October 31 is our year-end. Great finish to a good year. Up 20% over last year. Welcome to the roller coaster ride. I wonder what’s around the next bend?”

Ontario: (Hearth, BBQ, Spas) “Booked out seven to eight weeks.”

Ontario: (Hearth, BBQ, Spas) “Warm weather is offsetting urgency to decide. Quoting is up 30%. New orders are down 40%.”

Stock Watch

COMPANY – EXCHANGE	SYMBOL	52 WEEK		Week Ending		% CHANGE			MARKET CAPITALIZATION
		High	Low	29-SEP-16	27-OCT-16	4 WEEK	26 WEEK	52 WEEK	($000,000)
HNI Corporation (a)	HNI	56.96	29.84	39.80	40.39	1.5%	-7.6%	-5.9%	$1,760.0
Pool Corporation (b)	POOL	102.86	72.41	94.52	92.22	-2.4%	5.5%	13.1%	$3,740.0
Rentech (b)(e)	RTK	6.30	1.55	2.92	2.57	-12.0%	-25.9%	-56.1%	$55.7
Restoration Hardware Holdings (a)	RH	106.49	24.75	34.58	29.02	-16.1%	-32.9%	-71.8%	$1,180.0
Wayfair, Inc. (a)	W	50.00	28.85	39.37	33.37	-15.2%	-11.6%	-21.0%	$2,830.0
(a) = New York Stock Exchange (b) = NASDAQ (e) = Rentech is the parent company of New England Wood Pellet, which is the parent company of Allegheny Pellet.

In early July Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare June 2020 sales to June 2019. The accompanying charts and selected comments are from the 233 useable returns.

In early June, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare May 2020 sales to May 2019. The accompanying charts and selected comments are from the 229 useable returns.

In early May, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare April 2020 sales to April 2019. The accompanying charts and selected comments are from the 234 useable returns.

Hearth & Home December 2016