2018 May Business Climate
May Sales
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.
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Weather Report |
Consumer Confidence |
Stock Watch |
MONTH-TO-MONTHRETAILER SALES – U.S. AND CANADA – May 2018 vs. May 2017 |
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In May, Hearth retailers were the only group in which over 50% posted an UP month, they were followed closely by Spas at 48%. |
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13 MONTH YEAR-OVER-YEAR RETAILER SALES |
In May, both Hearth products and Spas were Up by double digits (10% and 12%), respectively. Sales of both Patio and Barbecue products were basically flat.
Retailer Comments
Northeast
Connecticut: (Hearth) “Some interest, no urgency.”
Delaware: (Hearth, BBQ) “May was slightly up in hearth and barbecue sales from May of 2017.”
Maine: (Hearth, Patio, BBQ) “Seasonal demand has begun in our corner of Maine. Customer requests for service and completion of winter jobs has pushed May above last year.”
Massachusetts: (Hearth) “Our sales have been steady all winter long – in the month of May we have seen a substantial growth for a month that starts to normally decrease as cold months fade. I think it has to do with a long winter and a cold spring – the New England climate is so unpredictable and our hearth shop has benefited from this.”
New Hampshire: (Patio, BBQ) “We seem to be about a month behind because of weather in the Northeast. But as of the end of May, we have recovered all of what we had lost in April, so we are back on track. Looking forward to a great rest of the season!”
New Hampshire: (Hearth, BBQ) “We’re surprised by the amount consumers are spending with no hesitation.”
New Jersey: (Hearth, Patio, BBQ) “Much better than last year!!”
New Jersey: (Hearth, BBQ) “I feel builder/remodel work is up this year. Generally, sales are up 5-7% from last year. Not complaining!”
New Jersey: (Hearth, Patio, BBQ) “Nice high-end sales and installations this month of May!”
New York: (BBQ, Spas) “We had a tremendous month of May in 2017 to beat; the month started off slow, but in the end we are up 20%. Our Bravo TV show didn’t hurt, everyone wants a hot tub in their backyard. Long Island is rocking.”
New York: (Hearth, BBQ) “May brought out several construction projects that needed fireplaces and were able to be done within the month. It was a nice change from the prior month with weather issues. Right now we are all caught up and looking for work.”
New York: (BBQ, Spas) “In May, hot tubs and Big Green Egg sales remain the same compared to 2017.”
Pennsylvania: (Hearth, BBQ) “Weird spring (cold) prolonging hearth sales with continuing interest in gas fireplaces, stoves, and logs. Customers are looking to remedy cold zones while introducing hearth to remodeling projects. Overall cost is certainly a driver. Cold, rainy spring has retarded barbecue activity along with the over-saturation of product available on multiple platforms; online, Big Boxes, etc. The similarity of barbecue products has never been greater, making differentiation very difficult.
“Surprisingly, interest in wood-burning stoves is rebounding, but when a complete system including a Class-A chimney and professional installation is required, the cost gets a bit out-of-hand. Gas-fired equipment remains King. It’s a tossup what the 2018-2019 season will bring; I guess that’s why we get up every morning. Alternative heating solutions are sharing the stage with ambient lifestyle choices. Blending the two is the avenue to continued success in this business. Good luck to all of us!”
Pennsylvania: (Patio, BBQ) “Overall, May sales were up 5.5%.”
Pennsylvania: (Hearth, Patio, BBQ) “Late start of spring delayed early patio and grill orders. Now factories cannot catch up, causing long lead times. These lead times are starting to affect the closing of sales, killing the season.”
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.
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May was a very warm month throughout the country, with eight states experiencing Record Warmest temperatures, six experiencing Above Average temperatures, and all the rest at Much Above Average. |
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For the three-month period March to May, five states – Utah, Colorado, Arizona, New Mexico and Texas – posted Much Above Average temperatures, while 14 states were at Above Average temperatures. |
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A large portion of the East Coast experienced very wet weather in May; Florida and Maryland had Record Wettest weather, and Georgia, South Carolina, North Carolina, Virginia, and Delaware were not far behind with Much Above Average precipitation. |
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South
Alabama: (Hearth, Patio, BBQ) “Our business is up in general. We have increased our inventory in these areas and focused on them to increase our sales.”
Arkansas: (Hearth) “Retail sales surprised us over last year despite record breaking hot weather. Good to see electric products coming on stronger to offset slower wood sales this time of the season.”
Mississippi: (Patio) “A great opening for the season!”
North Carolina: (Hearth, BBQ) “Very Busy – need more employees.”
North Carolina: (Hearth) “Finally seeing new construction come back in a big way. Chimneys, stoves, EPA fireplaces, all are up in new homes.”
North Carolina: (Hearth) “After improvement each month this year, May was dismal.”
Oklahoma: (Hearth) “Is 2018 ever going to slow down? Hope not, but we are booking 3-4 weeks out which isn’t normal for spring.”
Texas: (Hearth, Patio, BBQ) “April was a 38-year record. May cooled, but still was very solid and driven by big tickets in hearth, especially linears and also furniture. Gas grills are strong also. Electric continues strong. The economy is very good even though retail is different from even seven years ago. The people who visit and buy on the Internet without us knowing it is big, even on the fireplace side with service requests that we are not willing to take on.”
Texas: (Hearth, Patio, BBQ) “May sales were strong, after a lackluster, very cool April.”
Virginia: (Hearth) “Almost constant heavy rain and localized flooding brought just about everything to a stand-still.”
Virginia: (Hearth, BBQ) “Too much rain this month. Really hurt our outdoor barbecue grill sales.”
Midwest
Indiana: (Hearth, Patio, BBQ) “Unusually hot for many people; most of our sales were in the last two weeks of the month.”
Kansas: (Hearth, BBQ, Spas) “Spa sales are flat - fireplace interest and sales are up.”
Michigan: (Patio, BBQ) “With a slow start to April due to severe snowfall, our season was put on hold. Once the weather allowed, an influx of harried clients arrived to get their outdoor spaces planned for the Memorial Day weekend holiday.”
Minnesota: (Hearth) “While the larger metropolis areas are booming, many of the smaller communities in rural Minnesota are still reeling from the last recession. It’s a systemic problem that many of our politicians are trying to remedy – but are having great difficulty in doing so. We all have a knot tied in the end of our ropes and are just hanging in there as best we can!”
Ohio: (Hearth, BBQ) “May sales were steady. Cooler temps led to the continuation of interest in hearth products. Grill sales were flat (but not down) but things perked up at the end of the month due to Memorial Day. We have a new store manager in one of our locations and we are very excited for the growth potential!”
Ohio: (Hearth, BBQ) “National Barbecue Month was a relative dud. We had rather high expectations for grill sales once the weather turned warmer but they never came to fruition. Memorial Day weekend had the lowest sales totals we’ve seen in almost a decade. Tough to pinpoint why such a drop-off.”
Wisconsin: (Hearth, BBQ) “We are already booked for installations 30 days out!”
Wisconsin: (Hearth) “Very strong builder market. Builders are building spec houses as well as custom build. Strong retail sales also.”
Wisconsin: (Hearth, Patio, BBQ, Spas) “May was up overall, due to the late snows in April, and then the record breaking heat in May. Last weekend felt like fall, so who knows what July and August will bring?”
Wisconsin: (Hearth, BBQ) “I have never seen a month like this; new construction is up, traffic in store is heavy, can’t find help, and we’re out about two-plus months.”
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A reading above 90 indicates the economy is on solid footing; above 100 signals strong growth. |
West
California: (Hearth) “Every month in 2018 has been a steady incline with hearth and our awning sales.”
California: (Hearth, BBQ, Spas) “It’s been a great month for stove sales and estimates. We are getting out of the spa part of the business because we do not have the manpower to repair the spas. We will not sell anything that we cannot service. Having a difficult time trying to find a reliable pellet barbecue that is not in a Big Box store.”
Nevada: (Hearth, BBQ) “It’s a good year.”
Oregon: (Hearth) “Weather in Western Oregon has been unseasonably dry and warm. No interest in stove sales is mostly attributed to that. Usually not many sales in May anyway.”
Washington: (Hearth, BBQ, Spas) “After January and February, everything slowed way down.”
Washington: (Patio) “May experienced very good weather and traffic.”
Canada
British Columbia: (Hearth) “A number of phone calls but few visits. Most seem to be asking about details for a purchase later in the year.”
British Columbia: (Hearth, BBQ) “Hearth sales are keeping us busy as usual. We have received most of our booking orders and it is interesting to see the reactions of customers who are impressed with all the units high in our warehouse.”
British Columbia: (Hearth, Patio, BBQ, Spas) “May was a great month, customers were ready to buy and margins were being held. I really hope this trend continues!”
British Columbia: (Patio) “The low Canadian dollar is difficult to deal with. Some U.S. suppliers are helping us out, though.”
Ontario: (Hearth) “After a spectacular first quarter, May turned into the exact same gross revenues as last year. Hearth is burning up the field; outdoor has stalled radically. Daily we see interested customers get out the cell phone and then we never see them again. We’ve taken all the profit out of the displayed price and still they shop us online and we lose. How is this possible, and do you think they’ll miss us when we leave that segment behind?”
Ontario: (Hearth) “Unpredictable, as usual! Endured the coldest April in history, perhaps that helped our sales.”
Ontario: (Hearth, BBQ) “Large kitchen installs are doubled from last year; cart model barbecue sales are down. Pellet grill sales are way up.”
Ontario: (Hearth, BBQ) “Business was very slow in May, not many people through the door.”
Stock Watch
| COMPANY – EXCHANGE | SYMBOL | 52 WEEK | Week Ending | % CHANGE | MARKET CAPITALIZATION | ||||||
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| High | Low | 4-May-18 | 1-Jun-18 | 4 WEEK | 26 WEEK | 52 WEEK | ($000,000) | ||||
| Standard & Poor’s 500 (a) | S & P | 2,872.87 | 2,409.75 | 2,663.42 | 2,734.62 | 2.7% | 3.5% | 12.1% | |||
| HNI Corporation (b) | HNI | 45.24 | 31.16 | 34.93 | 36.79 | 5.3% | 7.4% | -18.8% | $1,600.00 | ||
| Pool Corporation (c) | POOL | 151.47 | 97.25 | 143.25 | 141.82 | -1.0% | 11.8% | 15.8% | $5,850.00 | ||
| Restoration Hardware (b) | RH | 110.25 | 44.00 | 100.84 | 98.27 | -2.5% | -3.6% | 131.0% | $2,290.00 | ||
| Wayfair, Inc. (b) | W | 104.59 | 55.33 | 80.13 | 94.99 | 18.5% | 35.3% | 39.3% | $8,740.00 | ||
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