May 9, 2018
Housing Start Trend Stable
The trend in housing starts was 225,696 units in April 2018, compared to 226,942 units in March 2018, says the Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts. The standalone monthly SAAR of housing starts for all areas in Canada was 214,379 units in April, down from 225,459 units in March. The SAAR of urban starts decreased by 4.7 per cent in April to 198,090 units. Multiple urban starts decreased by 2.7 per cent to 141,032 units in April while single-detached urban starts decreased by 9.3 per cent to 57,058 units. Rural starts were estimated at a seasonally adjusted annual rate of 16,289 units. “In April, the national trend in housing starts remained stable at historically elevated levels, with lower starts of single-detached dwellings offsetting higher starts of multi-unit dwellings,” says Bob Dugan, CMHC’s chief economist. “Notably, the national inventory of newly completed and unabsorbed multi-unit dwellings has been stable over the same period, indicating that demand for this type of unit has absorbed increased supply.”
Groupe BMR Rolling Out Digital Shelf Edge System
Groupe BMR is rolling out the Pricer digital shelf edge system in an additional 20 stores. Further waves of 20 store deployments are expected to follow in 2019 and 2020. In collaboration with JRTech Solutions Inc., a Canadian reseller of the Pricer electronic label technology, Groupe BMR has installed Pricer electronic label technology in more than 40 of its stores since 2010. “Electronic tags are essential to our digital strategy,” says Pierre Nolet, vice-president of development at Groupe BMR. “We are convinced that these investments will help our merchants in their day-to-day operations, particularly by optimizing the workflow of our experts on the floor and enabling them to better serve customers while minimizing the risk of errors.”
Mississauga Resident Wins Home Hardware Toyota Giveaway
A Mississauga, ON, resident is the winner of the Home Hardware and Toyota Winter Giveaway online contest. Joelle Zananiri received the keys to a 2018 Toyota Corolla SE CVT at Maplegrove Home Hardware in Oakville, ON. The contest ran from December 11 to February 14. There was no purchase necessary to enter the contest.
Kinnaird Earns Distinguished Retailer Award
Jeff Kinnaird, president of the Home Depot Canada, and his team are the recipient of the Retail Council of Canada (RCC) ‘Excellence in Retailing 2018 Distinguished Retail of the Year Award.’ The award recognizes a retail leader that has led their company to outstanding business success and innovation and has consistently demonstrated community commitment and support. Kinnaird is responsible for overseeing the sales and operations of 182 stores and approximately 30,000 associates. In 1996, he joined the Home Depot as a lumber associate and worked his way through various roles including store manager, regional vice-president of operations, and vice-president of merchandising. He was appointed president of the Home Depot Canada in 2016. The award will be presented May 29 at the RCC gala which closes the first day of its ‘STORE 2018’ conference which takes place May 29 and 30 in Toronto, ON. For information, visit https://www.storeconference.ca/
Resolute Back In Black
Resolute Forest Products Inc. had net income of $10 million for the first quarter of 2018, compared to a net loss of $47 million in the first quarter of 2017. Sales were $874 million in the quarter, an increase of $2 million from the first quarter of 2017. Operating income was $48 million compared to $53 million in the fourth quarter of 2017. The wood products segment had operating income of $53 million in the quarter, compared to $57 million in the previous quarter. EBITDA for the segment was $61 million, or $134 per thousand board feet, compared to $65 million, or $139 per thousand board feet, in the fourth quarter.
Sales Climb At Huttig
Huttig Building Products, Inc. had net sales of $198 million in the first quarter of 2018, which was $22.3 million, or 13 per cent, higher than net sales for the first quarter of 2017. Millwork product sales increased four per cent in the quarter to $95.3 million compared to $91.9 million. Building products sales increased 26 per cent to $85.5 million, compared to $68.1 million in the year-ago period. Wood product sales increased 10 per cent to $17.2 million compared to $15.7 million. Gross margin was $38.7 million in the first quarter compared to $35.5 million in the same period last year. As a percentage of sales, gross margin was 19.5 per cent compared to 20.2 per cent a year ago. The company had a net loss of $500,000 from continuing operations versus $900,000 last year, and adjusted EBITDA was $1.4 million versus $100,000.
May 8, 2018
Business Confidence Slides
Business leaders are becoming more pessimistic about the state of the Canadian economy finds the Conference Board of Canada's latest ‘Index of Business Confidence.’ It shows that business confidence fell 6.9 points to 93.1 in the first quarter of 2018, the lowest level in the last six quarters. A number of factors are contributing to this pessimism. Businesses do not expect the rapid sales growth they saw in 2017 to continue. They state concern about the impact of government policy on business competitiveness and about the availability of labour. They also report increased concern about the competitiveness of the Canadian economy in the face of U.S. tax cuts, a weak Canadian dollar, and an uncertain future for NAFTA. Much of the decline in the index came from significantly weaker investment intentions and financial expectations. The share of firms that believe now is a good time to invest in machinery and equipment (M&E) declined dramatically from 52 per cent to 34 per cent. At the same time, the share that believe now is a bad time to invest in M&E rose. This increase may be due in part to firms' expectations about their financial position. Fewer firms are expecting sales to perform as well as they have in the past and their financial position to improve in the next six months.
U.S. Building Projects Increase
The Dodge Momentum Index jumped 6.1 per cent in April to 163 from the revised March reading of 153.7. The index is a monthly measure of the first (or initial) report for non-residential building projects in planning in the U.S., which have been shown to lead construction spending for non-residential buildings by a full year. Both components of the index moved higher in April, with the commercial component up 6.3 per cent and the institutional component up 5.8 per cent. Over the last two months the commercial portion has posted the most aggressive growth, fueled by continued low vacancy rates for commercial buildings as well as the potential benefits from the U.S. tax cuts passed in December. The gains for the institutional component, while healthy, have been more moderate reflecting the ebb and flow of public funding for larger education and public building projects.
Gen Z Shoppers Like Instore Experiences
Generation Zers (18- to 24-year-olds) are using their retail experience to socialize, interact, and be entertained, says PWC Canada in its ‘Canadian Consumer Insights: Retail Evolution Report.’ Despite the perceived rapid growth of online sales, this segment still only represents 8.1 per cent of core retail sales in Canada. In fact, the report shows that customers overall continue to spend their disposable income in physical stores, where they can have a more engaging in-person experience versus online shopping. Fifty-eight per cent of consumers prefer to spend their disposable income on products, while 42 per cent spend it on experiences. Of those, Gen Zers prefer spending their money on experiences like socializing with family and friends (71 per cent), events (55 per cent), and travelling/vacations (51 per cent). “Stores are moving away from shelves and registers to create entertaining and engaging retail spaces,” says Myles Gooding, national retail leader with PwC Canada. “In a bid to continue to attract the next generation of consumers to physical stores, retailers are focused on creating ‘showroom’ spaces where customers can enjoy experiences and interact with the product. Generation Z customers indicate they will keep coming back to their favourite brands because of the full in-store experience.”
Giant Tiger Opens In Manitoba
Giant Tiger has opened a store in Steinbach, MB. The 16,000-square-foot store is stocked with home and family fashions, brand-name groceries, and everyday necessities.
KNIPEX Makes Changes
Sean Loomis is sales manager with KNIPEX Tools. He is responsible for the strategic direction of sales development in the western regions of Canada and the U.S. He has more than 20 years of industry sales experience. Sarah Cavallo is account manager for the eCommerce division. Previously, she was an eCommerce sales and support specialist.
Sales Steady At Clorox
The Clorox Company had sales growth of three per cent in the third quarter of its fiscal 2018 year over the third quarter in 2017. Gross margin decreased 120 basis points to 42.8 per cent for the quarter from 44 per cent in the year-ago quarter. Earnings from continuing operations were $181 million compared to $172 million in the year-ago quarter. Year-to-date net cash from continuing operations increased 19 per cent to $574 million compared with $483 million last year. The cleaning segment has a sales increase of three per cent year-over-year; the household segment has a sales increase of one per cent; lifestyle has a sales increase of two per cent; and international had a sales increase of four per cent.
Masonite Sales Rise
Masonite International Corporation had net sales of $518 million for the first quarter of 2018, a six per cent increase over net sales of $487 million in the first quarter of 2017. Net income for the quarter was $21 million versus $24 million a year ago. Adjusted EBITDA increased 17 per cent to $61 million versus $53 million. North American residential net sales were $360 million, a six per cent increase over the first quarter of 2017. Architectural net sales were $67 million, a seven per cent decrease from the year-ago period. Total company gross profit increased 10 per cent to $105 million compared to $96 million last year. Gross profit margin increased 80 basis points to 20.4 per cent.
May 7, 2018
Montreal Residential Sales Remain Strong
A total of 5,432 residential sales were concluded in the Montreal, QC, census metropolitan area (CMA) in April, a 10 per cent increase over sales in April 2017, says the Greater Montreal Real Estate Board (GMREB). This was the 38th consecutive increase in sales and the best month of April in eight years. Apart from Vaudreuil-Soulanges, where sales were unchanged compared to April last year, all of the other main areas of the Montreal CMA registered a significant increase in sales. Suburban areas led the way as sales rose by 15 per cent on the South Shore, by 13 per cent in Saint-Jean-sur-Richelieu, and by 12 per cent in Laval and on the North Shore. As for the Island of Montréal, sales increased by six per cent. Condominium sales soared once again with an 18 per cent increase in transactions. In fact, this was the 12th consecutive month of double-digit sales growth for this property category. Single-family homes and plexes both registered a six per cent increase in sales compared to April of last year. Across the Montreal CMA, there were 25,466 active residential listings in the Centris system in April, a 17 per cent drop compared to April of 2017.
Local Stores Win Last Minute Purchases
Even with some eCommerce giants offering same or one-day delivery, consumers are still turning to local stores when they’re in a pinch for an item, finds a study by marketing technology company Netsertive. The study shows that 43 per cent of people always turn to a local store when they need a product within two to three days, while another 28 per cent say they are evenly split between visiting a store and using an eCommerce website. The study also confirms that consumers are turning to online channels to research products before even entering a store. Sixty-eight per cent of surveyed use Google to evaluate local businesses and 72 per cent use online reviews. Another 80 per cent always research big-ticket items (refrigerators, washing machines, etc.) online before purchasing these items instore. Netsertive recommends small businesses utilize ‘Google My Business’ to confirm their business listing is correct and will appear in ‘near me’ searches. Small and local retailers should leverage intelligent digital marketing strategies to engage customers online throughout their path to purchase.
Clopay To Acquire CornellCookson
Griffon Corporation’s subsidiary, Clopay Building Products Company, Inc., plans to acquire CornellCookson, Inc., a U.S. manufacturer of rolling steel door and grille products for commercial, industrial, institutional, and retail use. “CornellCookson is a highly strategic addition to Griffon’s home and building products segment, complementing Clopay’s existing portfolio of residential and commercial sectional doors with leading brands and products,” says Ronald J. Kramer, chairman and chief executive officer at Griffon. “This acquisition will expand our existing footprint in the commercial channel and strengthen our relationships with professional dealers and installers.” The transaction is expected to close in June.
Malone Named President
Valerie Malone is president and general manager of LIXIL Canada Inc., home to the American Standard, DXV, and GROHE kitchen and bath brands. She joined LIXIL in May 2017 and has experience in different verticals and industries with a host of high-profile organizations including Whirlpool Corporation and LG Electronics.
Lumber Liquidators Sales Rise
Lumber Liquidators had net sales of $261.8 million for the first quarter of 2018, an increase of 5.4 per cent over net sales of $248.4 million in the first quarter of 2017. Net sales in comparable stores increased 2.9 per cent. Gross margin increased to 36.3 per cent in the quarter from 34.9 per cent in the year-ago period. Operating loss was $1.4 million compared to an operating loss of $25.4 million last year. Net loss for the quarter was $2 million compared to a net loss of $26.4 million a year ago.
Simpson Manufacturing Sales Up
Simpson Manufacturing Co., Inc. had consolidated net sales of $244.8 million for the first quarter of 2018, an increase of 11 per cent over consolidated net sales of $219.9 million in the first quarter of 2017. North American net sales rose 12 per cent to $206.2 million year-over-year. Consolidated gross profit for the quarter was $108.5 million, up eight per cent compared to consolidated gross profit of $100.2 million. Gross profit margin decreased to 44.3 per cent from 45.6 per cent. Consolidated net income was $25.4 million compared to net income of $23.1 million.
May 4, 2018
Davis Named Home Hardware President
Terry Davis is president and chief executive officer of Home Hardware Stores Limited. Previously, he was chief executive officer. He succeeds Paul Straus, who is retiring but will remain a consultant to the company. Davis joined Home Hardware more than four decades ago in a junior warehouse position in the distribution centre in St. Jacobs, ON.
Jenkins: Stand Up To Government Overspending
Governments seem to have the luxury of deficit financing and racking up losses year after year, but something needs to be done about it, says Ken Jenkins, president of Castle Building Centres Group. Writing on his blog, ‘Insights,’ he says that businesses don’t have that same luxury and their decisions must be insightful with no margin for error. Governments don’t appear to be held to the same rules. “There appears to be no end in sight to governments’ over-spending, nor is there any timetable for balancing the books,” he says. He wants businesses and people to stand up against these debts and the lack of promises to fix them. “As business leaders, entrepreneurs, and valued employees, now more than ever, our voices need to be heard. Piling on additional corporate and personal taxation are short-term, short-sighted instruments of political ideology that serve to polarize political positions. The delta that is forming here in North America between Canadian and U.S. tax bases, both personally and corporately, is tipping the balance of competitiveness against our country.”
Crown Windows Joins Deceuninck
Crown Windows, a division of Earthwise Group member D&W Windows, has joined Deceuninck Commercial Alliance. Deceuninck says the newest member strengthens its Commercial Alliance and its ability to provide solutions to its growing list of commercial customers. Through the Commercial Alliance, Deceuninck is collaborating with window fabrication companies to develop industry-leading window and door system profiles that surpass energy efficiency standards, provide many colour options, and deliver visually appealing design.
USG Board Authorizes Negotiations With Knauf
USG Corporation’s board of directors has authorized management to commence negotiations with Gebr. Knauf KG regarding a potential sale of the company. The USG board says it remains committed to acting in the best interests of all shareholders and will evaluate all options to do so. USG has advised Knauf that it is prepared to agree to a customary confidentiality agreement to facilitate sharing appropriate due diligence information. The board believes that by entering into negotiations and exchanging certain information, Knauf should be able to identify additional sources of value in combining the businesses and will see value in excess of its most recent proposal. However, USG states there is no assurance that the negotiation process will result in any transaction.
Armstrong First Quarter Sales Grow
Armstrong World Industries, Inc. had net sales of $227.3 million for the first quarter of 2018, an increase of 3.4 per cent over net sales of $219.8 million in the first quarter of 2017. Operating income for the quarter was $49.6 million, a 13.4 per cent decrease over operating income of $57.3 million in the year-ago period. Earnings from continuing operations was $41.2 million compared to $35.5 million, an increase of 16.1 per cent. Adjusted EBITDA was $79 million compared $75 million, an increase of 4.8 per cent year-over-year. The company had strong growth (69.8 per cent adjusted EBITDA) in its architectural specialties segment with a 22 per cent increase in sales year-over-year.
Huttig Net Sales Grow
Huttig Building Products, Inc. had net sales of $198 million in the first quarter of 2018 which ended March 31. This was $22.3 million, or 13 per cent, higher than the first quarter of 2017. The increase in net sales was primarily attributed to an eight per cent increase in new residential construction activity as well as growth derived from the execution of its strategies. Building products sales increased 26 per cent in the quarter to $85.5 million, compared to $68.1 million in the first quarter of 2017, primarily attributed to higher sales of the Huttig-Grip product line. Wood product sales increased 10 per cent in the first quarter to $17.2 million, compared to $15.7 million in the first quarter of 2017.
May 3, 2018
Home Depot Climbs Brand Trust Index
Home Depot climbed from 37th place in 2017 to eighth place in the 2018 ‘Gustavson Brand Trust Index,’ while Costco Wholesale maintained its third-place position and IKEA maintained its fifth-place position. This is the fourth annual index by the Peter B. Gustavson School of Business at the University of Victoria in British Columbia that analyzes the brands most trusted by Canadians, highlighting how shared values, relationship management, and customer experience influence customer trust. CAA led the index in first place, followed by MEC (Mountain Equipment Co-Op) in second place. Canadian Tire placed 22nd, Home Hardware Stores Limited placed 24th, and RONA/Lowe’s Canada placed 31st. “Trust is an important driver of consumer purchasing decisions,” says Saul Klein, dean of the Gustavson School of Business. “Our index highlights the continued success of some of Canada's best-known brands, but it also serves to highlight the impact of failing to meet consumer expectations and the rebound of brands who have faltered on consumer trust in the past.”
Predispositions Drive Consumer Decisions
Consumers, in order to simplify and accelerate the decision-making process, rely on certain predispositions while, at the same time, keeping an open mind to strong evidence for making an alternative choice, finds a study by UCL School of Management and the Anderson School of Management at the University of California, Los Angeles (UCLA). Although ‘quality’ is the key non-price consideration driving consumer purchase decisions, consumers often lack knowledge and encounter missing or conflicting information about product quality, says the study. It is also difficult to evaluate the quality of certain products or service prior to purchase, yet the consumer must, nonetheless, make a choice. This is particularly the case when consumers are faced with decisions when product quality is ambiguous. The study shows that, more often than not, a predisposition (an initial preference for a product based on familiarity, positive associations, affect, prior experience, or something else) will drive decision-making unless and until compelling evidence on product quality is presented to change that decision. So, while a predisposition towards a product creates a competitive advantage, it can be overturned by evidence. If a competing product can demonstrate sufficiently higher quality or offer a sufficiently lower price – or some combination – the consumer will often tend to make a rational decision.
Castle Launches Social Media Channels
Castle Building Centres Group Ltd. has launched several social media platforms, including Facebook, Twitter, LinkedIn, and Instagram channels. The company says the launches are to continue to enhance its commitment to connection. “We look forward to enhanced engagement and sharing content with our valued members, vendor partners, and the communities they serve across the country,” it says
Sherwin-Williams Launches Applicator Certification
Sherwin-Williams Industrial Wood Coatings has launched its assured applicator certification program for factory finishers of wood and composite siding. The certification is intended to promote quality-driven factory finishers that enable manufacturers of wood and composite siding to deliver long-lasting, high-quality building products. To achieve the certification, a factory finisher must undergo a detailed audit of its finishing line, coating system, and standard operating procedures. They will be required to undergo an annual recertification audit to maintain their certified status.
Brault Enters Maritimes
Brault Roofing will now have a physical presence in the Maritimes. Brault Roofing has been in the business in Quebec since 1949. It is a 70-year-old, 3rd generation, family business that focuses on the commercial, industrial, and institutional roofing markets. It offers a wide variety of roofing solutions.