August 13, 2019
July Housing Starts Trend Higher
The trend in housing starts was 208,970 units in July 2019, compared to 205,765 units in June 2019, 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. High levels of activity in apartment and row starts in urban centres in recent months continued to be reflected in the high level of the total starts trend. The Vancouver, BC, census metropolitan area (CMA) housing starts continued to trend higher in July, while the Victoria, BC, CMA declined. Total housing starts in Regina, SK, trended lower and the Winnipeg, MB, CMA starts decreased. The Toronto, ON, CMA housing stared trended lower, while Ottawa, ON, trended higher. The Montreal, QC, area housing starts were up and New Brunswick starts were up strongly by 40 per cent. Prince Edward Island starts were up 319 per cent over July 2018. The standalone monthly SAAR of housing starts for all areas in Canada was 222,013 units in July, down 9.6 per cent from 245,455 units in June.
CTC To Acquire Canadian Party City
Canadian Tire Corporation, Limited (CTC) has entered into an agreement to purchase Party City's Canadian business. Party City is a shopping destination for party supplies and seasonal celebrations, with 65 Canadian retail stores in seven provinces. Party City's product assortments will be made available nationally across 500 Canadian Tire Retail (CTR) stores and online at Canadiantire.ca and will strengthen CTC's marketplace. It will also further expand and strengthen the retailer's loyalty program, Triangle Rewards. CTC plans to expand the Party City network in Canada via building store-in-stores, pop-ups, and in-line aisle displays across CTR. The acquisition is expected to close in the third quarter of 2019.
Leon’s Opens Smart Store
Leon's Furniture Limited has opened a smart-store concept store in Coquitlam, BC. Though typically known for its large-scale stores, the 15,000-square-foot space invites customers to browse a curated collection of furniture and appliances while technological features allow customers to shop the full product range. Customers can obtain any product QR code on one of four touchscreen stations. The interactive experience also introduces customers to additional products and custom colours not available on the showroom floor. The showroom features an 11-foot video wall and sales associates can also show products in augmented reality (AR) alongside other pieces in the showroom. Checking out is available with mobile point-of-sale tablets, which are voice activated to help speed up the completion of order/payment/delivery forms. Customers also have access to delivery management online or on a smart device.
Klein Tools Launches Cooling Products
Klein Tools has launched a line of cooling products designed to help reduce and manage heat stress. The Cooling Towels and Cooling Bandana feature PVA cooling technology to retain moisture and stay cooler than the surrounding air. The products activate in less than a minute and stay cool for hours. They can be re-used and re-activated several times.
Pet Care Advances Spectrum Brands Sales
Spectrum Brands Holdings, Inc. had net sales of $1,022 million in the third quarter of its fiscal 2019 year, a decline of 0.7 per cent over net sales of $1,029 million in the third quarter of 2018. Organic sales increased 0.8 per cent driven partly by global pet care sales offset by lower revenues from hardware and home improvement, home and personal care, and home and garden. Operating income was $92.8 million, down 14 per cent compared to $106.8 million in the year-ago period. This result was impacted by higher distribution cost and restructuring charges. Adjusted EBITDA was $172.9 million, down 4.8 per cent compared to $177.7 million in the same period last year. The hardware and home improvement (HHI) segment had a sales decrease of 17.8 per cent; home and personal care net sales decreased 4.3 per cent; global pet care net sales increased 13.9 per cent; and home and garden net sales decreased 2.6 per cent year-over-year.
New Stores Increase Lumber Liquidators Sales
Lumber Liquidators had net sales of $289 million for the second quarter of 2019, an increase of 1.8 per cent compared to net sales in the second quarter of 2018. The increase was driven by new stores. Net sales in comparable stores were flat year-over-year. Gross profit increased 1.2 per cent in the quarter to $102 million as compared to $101 million in the comparable period in 2018. Gross margin decreased to 35.5 per cent from 35.7 per cent. Net loss was $2.9 million compared to a net loss of $1.5 million and adjusted net income was $2.1 million compared to $2.4 million in the year-ago period.
August 12, 2019
Nova Scotia Leads Building Permit Gains
The value of building permits issued by Canadian municipalities declined 3.7 per cent to $8 billion in June, largely due to a decrease in the value of multi-family and institutional permits, says Statistics Canada. Six provinces declined, with Alberta accounting for over one-third of the national decrease. Of the provinces posting gains, Nova Scotia reported the largest increase at 32.1 per cent, reflecting gains in the value of residential and commercial permits in Halifax. The value of permits for multi-family dwellings posted the largest monthly decrease of the five main components, down 6.7 per cent in June to $2.6 billion. The decline was concentrated in Quebec, where the value of permits fell 21.8 per cent following a 16.9 per cent gain in May. There were increases in other parts of the country, including the census metropolitan areas (CMAs) of Kitchener–Cambridge–Waterloo, ON, at $82 million and Kelowna, BC, at $61 million. The value of institutional permits decreased in seven provinces in June, but nationally remained 2.2 per cent higher than June 2018. On a month-to-month basis, commercial permits value decreased 1.1 per cent and industrial permits rose 1.7 per cent.
July Dodge Momentum Index Descends
The Dodge Momentum Index retreated 4.6 per cent in July to 138.9, down from the revised June reading of 145.6. The index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for non-residential building projects in planning, which have been shown to lead construction spending for non-residential buildings by a full year. The lower reading in July was due to a 10.2 per cent pullback by its institutional segment following a six per cent increase in June. The commercial segment in July was basically flat, slipping a slight 0.3 per cent. After peaking in July 2018, the index has generally receded, with the latest month’s drop consistent with that trend. Compared to a year ago, in July it was down 11.6 per cent, with its commercial segment down a steep 17.4 per cent while its institutional segment was down a relatively modest 1.8 per cent. Much of the decline over the past year took place during the latter half of 2018, as December was reported 10.6 per cent below the July 2018 peak. Since then, the descent has been more gradual, with the July reading down just 1.2 per cent from last December.
Stanley B&D Supports Habitat For Humanity
Stanley Black & Decker Canada (SBD Canada) employees donated their time and talents to work on Habitat for Humanity Build Days in Toronto, ON, and Calgary, AB, on August 7. Teams worked on eight homes with Habitat GTA in Toronto and employees in Calgary partnered with Habitat Southern Alberta on two homes. In Montreal, builds two teams will take part in one Habitat Quebec build on August 22. Habitat Build Days have become annual events for SBD Canada employees to work towards the goal of affordable homeownership. After the day on the site, the DEWALT and Stanley tools used in the builds are donated to the local Habitat for Humanity organizations.
Muller Named Chief Supply Chain Officer
Jeff Muller is chief supply chain officer with UCS Forest Group. He joins the company from Panolam Industries where he held the role of executive vice-president, chief revenue officer.
Beacon Sales Flat
Beacon Roofing Supply, Inc. had net sales of $1.92 billion in the third quarter of its 2019 fiscal year, a decrease of 0.5 per cent compared to net sales of $1.93 billion in the third quarter of 2018. Residential roofing product sales increased 2.9 per cent, non-residential roofing product sales decreased 2.4 per cent, and complementary product sales decreased 3.6 per cent over the prior year period. Net income for the quarter was $25 million compared to $43.4 million in 2018. Adjusted net income was $72.6 million compared to $93.4 million.
North American Residential Market Leads Masonite Sales
Masonite International Corporation had net sales of $563 million for the second quarter of 2019, a decrease of one per cent compared to net sales of $567 million in the second quarter of 2018, driven by a decrease in base volume. Net income was $24 million compared to $35 million last year. Adjusted EBITDA increased two per cent to $80 million. North American residential sales were $380 million for the quarter, flat compared to the second quarter of 2018. Architectural net sales were $97 million, a 19 per cent increase from the second quarter of 2018. Total company gross profit increased four per cent to $129 million compared to $124 million in the year-ago period. Gross profit margin increased 110 basis points to 22.9 per cent.
August 9, 2019
Loyalty Program Enhances Earnings
Canadian Tire Corporation, Limited had consolidated retail sales of $4.03 billion for the second quarter of 2019, an increase of 1.3 per cent over consolidated retail sales of $4.25 billion in the second quarter of 2018. Excluding petroleum, consolidated retail sales were up 2.3 per cent year-over-year. Consolidated revenue was $3.69 billion for the quarter, up 5.9 per cent over $3.48 billion last year. Canadian Tire retail sales increased 2.1 per cent and comparable sales were up 1.9 per cent year-over-year. "Our exclusive brands and products are clearly resonating with our customers, and through our Triangle Rewards loyalty and credit card programs they are engaging with us more often and shopping across our channels and banners, signalling the effectiveness of our growing Triangle marketplace," says Stephen Wetmore, president and CEO.
Online Shoppers Want Transparency
A glitzy website or a modern app aren't enough to satisfy today's savvy online shoppers. They demand upfront transparency on fees, control over the delivery process, a clearly-stated returns policy, and loyalty rewards, says research from UPS. The '2019 UPS Pulse of the Online Shopper' study says 90 per cent of consumers research items before purchasing online and 95 per cent expect to see all shipping fees and taxes totalled before they'll complete the purchase. eCommerce consumers also want to feel valued and rewarded, with 19 per cent admitting they have more than five loyalty memberships. Shoppers want choice and convenience, but would rather not pay for it. They like next-day deliveries, but they will consider other options ‒ such as lower fees or incentives ‒ for slower shipping. Generally, though, online shoppers show a very low appetite for paying for shipping. That's why they'll take various actions to obtain free shipping, including adding items to the cart (36 per cent), choosing the slowest transit time (32 per cent), and searching online for a promo code (32 per cent). Returns also remain key to loyal customers, with 73 per cent saying the returns experience affects whether they would continue shopping with a retailer.
U.S. PMI Lowest Since September 2009
U.S. manufacturing firms signalled only a fractional improvement in business conditions in July, with the IHS Markit U.S. Manufacturing PMI dropping to its lowest since September 2009. Driving less robust overall growth was a slower increase in production and muted client demand. Although the rate of expansion in new business quickened, it remained historically subdued, with export orders contracting for the second time in the last three months. In line with less robust demand, optimism among manufacturers dipped to a series low. Firms were also more cautious towards hiring, with employment falling for the first time since mid-2013. The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index posted 50.4 in July, broadly in line with 50.6 in June. The latest reading signalled a fractional improvement in the health of the manufacturing sector, but also indicated the slowest overall expansion since the height of the financial crisis in September 2009.
IKEA Canada Launches $5 Click & Collect
IKEA Canada has launched a $5 'Click & Collect.' Whether purchasing a single item or an entire kitchen, customers can now order Click & Collect for a flat rate of $5 at all store locations nationwide. The service enables customers to select and buy products online and pick-up their purchases at a store or pick-up location. The retailer is also expanding its delivery offer and pricing, including parcel delivery starting at $7.99 Canada-wide. It continues to expand its TaskRabbit in-home assembly and mounting offer to new markets across Canada. Following a successful launch in Toronto, ON, and Vancouver, BC, in 2018, IKEA continued its roll-out for TaskRabbit to Edmonton and Calgary, AB, markets in May and is set to launch in Ottawa, ON, and Halifax, NS, markets in late August.
Visualizer Platform Aids In Matching Paint Colours
Renoworks Software Inc. has launched its ColorExpress visualizer platform for the Sherwin-Williams and its network of manufacturer partners. The platform was developed to address the needs of building product manufacturers who are part of the Sherwin-Williams supplier program. The technology allows end-users to mix, match, and blend the Sherwin-Williams paint catalogue with their building products including siding, trim, doors, windows, flooring, and cabinetry. It turns the customization and visualization design workflow into a more fluid experience for end-users and provides Sherwin Williams' manufacturer partners with engagement solutions and services to enhance their online and offline experiences. The platform will also provide manufacturer partners with other Renoworks' solutions such as detailed analytics, lead capture, and business insights into consumer usage and behaviour.
Softer Demand Affects Continental Sales
Continental Building Products, Inc. had net sales of $124.2 million in the second quarter of 2019, a decrease of 10.8 per cent over net sales of $139.3 million in the second quarter of 2018. Wallboard sales volumes decreased 6.1 per cent to 678 million square feet (MMSF), compared to 722 million square feet (MMSF) in the prior year quarter, primarily attributable to softer demand. Operating income was down 36.4 per cent to $19.4 million, compared to $30.6 million in the prior year quarter. Net income decreased 41.3 per cent to $12.8 million compared to $21.9 million. Adjusted EBITDA was $32.9 million, down 20.4 per cent from $41.4 million in the year-ago period.
August 8, 2019
Edmonton Residential Sales Up 11 Per Pent
Total residential unit sales in the Edmonton, AB, census metropolitan area (CMA) real estate market for July rose 11.49 per cent compared to July 2018, says the REALTORS Association of Edmonton. While sales rose, the number of new residential listings dropped 10.01 per cent from July 2018 and overall inventory in the Edmonton CMA dropped 13.58 per cent from July of last year. Single family home unit sales increased 17.79 per cent, while condo unit sales dropped 0.89 per cent, and unit sales of duplexes increased 4.42 per cent from the same period of time last year.
Mobile Technology Transforming Shopping Experience
Nearly all IT decision-makers (99 per cent) say that their retail stores have implemented at least one mobile technology in-store, highlighting the potential for technology to transform the shopping experience, says a survey from Jamf, an Apple device management provider. It says it's clear that retailers are utilizing technology to elevate the retail experience. Retailers say that mobile technology enables them to optimize inventory planning and management (96 per cent) and point-of-sale (96 per cent), personalize the customer experience (96 per cent), and boost employee productivity and motivation (95 per cent). In fact, 91 per cent of respondents confirm that mobile technology makes their retail brand more competitive and/or drives increased revenue by streamlining the sales process. Half also report that customer satisfaction has improved significantly after deploying devices. Mobile technology will likely play an even greater role in a future retail environment. Nearly all respondents plan to increase mobile technology use in the future and already are offering, or plan to offer, company-issued mobile devices for staff use (95 per cent), point-of-sale systems (95 per cent), connections between physical and online shops (93 per cent), fixed interactive screens in store (94 per cent), and shared devices (90 per cent).
MANN+HUMMEL Completes Hardy Filtration Acquisition
Filtration solutions company MANN+HUMMEL has acquired Hardy Filtration, a Quebec-based air filtration company. This will expand the global footprint and manufacturing capabilities of Tri-Dim Filter Corporation's business, which MANN+HUMMEL acquired in 2018. MANN+HUMMEL is a global, family-owned company providing filtration solutions for automotive and industrial applications, indoor, industrial and public air quality, and the sustainable use of water. Hardy Filtration, founded in 1993, further expands the company's offering in innovative air filtration solutions. Hardy has been developing, manufacturing, and marketing a large variety of filtration products, such as air filters, paint booth filters, and dust collector bags, for various applications for more than 25 years.
Newell Sales Down
Newell Brands had net sales of $2.1 billion for the second quarter of 2019, a decline of 3.9 per cent compared with net sales in the second quarter of 2018. Net income was $89.8 million compared to $132 million. The food and appliances segment had a core sales decrease of 7.1 per cent and home and outdoor living had a core sales decline of 1.1 per cent. Connected home and security divisions posted positive core sales which were offset by lower core sales in outdoor and recreation. In the quarter, the company announced its intent to retain the Rubbermaid commercial products business, including the related Rubbermaid outdoor, closet, refuse, and garage business lines, which had been classified as held for sale and discontinued operations. The decision to keep the business was based on the strength of the Rubbermaid commercial products brand, its competitive position in a large and growing category, and its track record of strong cash flow generation, sales growth, and strong margins.
Small Sales Decrease For nVent
nVent Electric plc had net sales of $540 million in the second quarter of 2019, a decrease of one per cent compared to sales of $543 million in the second quarter of 2018; organic sales increased one per cent year-over-year. Operating income was up 33 per cent to $87 million from $65 million last year and net income was $60.9 million compared to $43.3 million. Net sales for the thermal management segment were down seven per cent to $129 million year-over-year; net sales for electrical and fastening solutions were up two per cent to $151 million.
August 7, 2019
GTA Housing Market Continues To Tighten
There were 8,595 residential sales in the Greater Toronto, ON, Area (GTA) in July, says the Toronto Real Estate Board (TREB). This was up 24.3 per cent compared to July 2018; on a month-over-month basis, sales were up by 5.1 per cent. New listings were up compared to July 2018, but by a much lesser annual rate than sales at 3.7 per cent and active listings at the end of the month were down by 9.1 per cent year-over-year. TREB says this shows market conditions have clearly tightened compared to last year. "GTA households continue to increase by 40,000 to 50,000 each year due to strong population growth," says John DiMichele, CEO of TREB. "As more and more households come to terms with the stress test and move back into the market in the coming months and years, they could suffer from a chronically under-supplied marketplace and an acceleration of home price growth to unsustainable levels. Fortunately, policy makers have acknowledged the housing supply issue and are working toward solutions."
Confidence Mixed For U.S. Home Renovation Professionals
Confidence is mixed among U.S. renovation professionals for the third quarter of 2019, says the ' Q3 2019 Houzz Renovation Barometer.' For the architecture and design sector, the outlook is the most optimistic of the past two years, however, the construction sector sentiments are some of the lowest since 2015. For the architecture and design sector, the 'Expected Business Activity Indicator' related to project inquiries and new committed projects increased one to 71 in the third quarter compared to the second quarter. Expectations increased for project inquiries (up three points) and remained steady for new committed projects. For the construction sector, the 'Expected Business Activity Indicator' decreased to 71 in the quarter, down three points compared to the previous quarter. The decrease is a result of a decline in expectations for both project inquiries (down two points) and new committed projects (down three points).
Rayonier To Sell Quebec Pulp Mill
Rayonier Advanced Materials Inc. plans to sell its Matane, QC, pulp mill and related assets to Sappi Limited, a global diversified wood fibre company. The mill produces approximately 270,000 metric tons of high-yield pulp and sells the product globally for use in manufacturing. The mill was acquired as part of Rayonier's acquisition of Tembec Inc. in November 2017. The company will continue to manufacture and sell approximately 240,000 metric tons per year of high yield pulp out of its Témiscaming, QC, facility. The transaction is expected to close in the fourth quarter.
Slight Gains In CanWel Revenues
CanWel Building Materials Group Ltd. had consolidated revenues of $385.7 million for the second quarter of 2019, an increase of 0.9 per cent compared to consolidated revenues of $382.1 million in the second quarter of 2018. Sales for the distribution segment increased by 0.7 per cent, largely due to the inclusion of the results from acquisitions. These improvements were partially offset by the impact of construction materials pricing which generally continued on a downward trend until late in the quarter. Sales by product group in the quarter were made up of 62 per cent construction materials compared to 63 per cent last year, with the remaining balance resulting from specialty and allied products of 31 per cent and forestry and other of seven per cent. Gross margin dollars were lower by six per cent at $54.4 million, and the gross margin percentage was also lower at 14.1 per cent of revenues versus 15.1 per cent in the year-ago period. Adjusted EBITDA was $27.5 million, flat compared to the second quarter of 2018.
Lower Pricing Contributes To Resolute Sales Decrease
Resolute Forest Products Inc. had net income of $25 million for the second quarter of 2019, a decrease over net income of $72 million in the year-ago quarter. Sales for the quarter were $755 million, a decrease of $221 million compared to sales of $976 million last year. Lower pricing in most business segments contributed to the results. Operating income was $40 million compared to $64 million in the second quarter of 2018. The wood products segment had an operating loss of $3 million in the quarter, compared to an operating income of $6 million in the first quarter, mainly due to weaker pricing. Shipments, however, rose by 56 million board feet due to improved rail car availability and a modest increase in U.S. lumber consumption compared to the first quarter.