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News

November 5, 2019

Canadians Planning To Reduce Holiday Spending

In advance of Black Friday, more than half of Canadians (55 per cent) say they will be spending less on holiday gifts this year, says a survey by Equifax Canada. This comes following its ‘Q2 Consumer Credit Trends Report,’ which showed total debt per consumer rose by 1.9 per cent at the end of the second quarter in 2019. The survey says women are more likely to spend significantly less at 61 per cent versus 48 per cent of men. Canadians under the age of 55 are significantly more likely to limit their spending because they are already carrying too much debt and they have a lot of anxiety about it. Shoppers between 35 and 44 have the most concern about current debt levels (58 per cent compared to 46 per cent for the general population) and the most anxiety (49 per cent compared to 39 per cent for the general population). The majority of people surveyed, however, are working towards being financially fit for the holidays with 58 per cent of them planning to prepare a holiday budget.


U.S. Manufacturers Showing Faster Output

The U.S. manufacturing sector saw a further modest improvement in operating conditions in October, supported by faster expansions in output and new business, says the IHS Markit U.S. Manufacturing Purchasing Managers’ Index (PMI). Rates of growth in both production and new orders accelerated to six-month highs. Subsequently, employment rose at the quickest pace since May and business confidence picked up to a four-month high. Meanwhile, rates of input price and output charge inflation softened and remained subdued, with selling prices broadly unchanged during the month. The seasonally adjusted U.S. PMI posted 51.3 in October, up slightly from 51.1 in September. The latest headline figure was the highest since April, but remained consistent with only a modest improvement in the health of the manufacturing sector. The overall rate of growth remained well below the long-run series average.


Lowe’s Banners Now Offer MultiVolt Solution

Lowe’s Canada has partnered with Metabo HPT, formerly known as Hitachi, to offer contractors, home builders, trade workers, and heavy DIYers tools equipped with its MultiVolt solution. Now available in Canada in-store and online at Lowe’s, RONA, Reno-Depot, and Ace Canada, this power tool platform makes it possible to switch from a corded to a cordless power source, without losing any efficiency. The Metabo HPT MultiVolt assortment includes saws, grinders, wrenches, hammers, and drills. 


IKEA Canada Launches Family Loyalty Program

IKEA Canada has rolled-out its IKEA Family loyalty program to markets nationwide. The reimagined program is fully digital from online sign-up to a digital card and offers benefits both in-store and online. These include a free hot drink at the IKEA Restaurant, member-only discounts, home furnishings inspiration via workshops, and exclusive shopping events. IKEA Family is also the hub for the retailer's Sell-Back program, enabling customers to apply to sell their gently-used IKEA products back, in exchange for store credit. The sustainable service gives used products a second-life and has seen more than 25,000 submissions since launching earlier this year. The company will continue to evolve the loyalty program as more benefits, rewards, and engagement opportunities are added over time based on customer interaction and feedback.


Clorox Sales Down Four Per Cent

The Clorox Company had net sales of $1.5 billion for the first quarter of its 2020 fiscal year, down four per cent over net sales of $1.56 billion in the first quarter of 2019. Net sales decreased two per cent in the cleaning segment, decreased 14 per cent in the household segment, and increased four per cent in the lifestyle segment. Gross margin for the quarter increased by 60 basis points to 44 per cent from 43.4 per cent in the year-ago quarter. Earnings for the quarter were $203 million, a two per cent decrease over earnings of $210 million in the year-ago period.


Architectural Products Lead Masco Sales Increase

Masco Corporation had net sales of $1.95 billion in the third quarter of 2019, an increase of two per cent over sales of $1.9 in the third quarter of 2018. In local currency, sales increased three per cent year-over-year. Plumbing products had a sales decrease of one per cent year-over-year, decorative architectural products had a sales increase of four per cent; and cabinetry products had a sales decrease of one per cent. Operating profit for the quarter was $316 million, up 10 per cent over operating profit of $286 million last year. The company had net income of $126 million for the quarter, down from net income of $180 million in the year-ago period.


November 4, 2019

Manufacturers Optimistic About Growth

October data signalled a modest improvement in business conditions across the Canadian manufacturing sector, driven by a sustained rebound in output and new business levels, says the IHS Markit Canada Manufacturing Purchasing Managers’ Index (PMI). The index was 51.2 in October, up from a, seasonally adjusted 51 in September. This is above the crucial 50 no-change value for the second month running. The reading is the highest since February, but signalled only a marginal improvement in overall operating conditions. Faster rates of output and new order growth boosted the headline PMI in October, more than offsetting a slightly weaker contribution from the employment component. Input cost inflation accelerated from the seven-year low seen during September. Manufacturers often commented on higher commodity prices in the latest survey period. Factory gate charges nonetheless increased only slightly, with some firms noting that subdued business conditions had held back their pricing power. Looking ahead, manufacturers in Canada are optimistic overall about their prospects for growth during the next 12 months.


Lowe’s Launches Merchandising Program

Lowe’s Canada has introduced a merchandising program into its Lowe’s stores across Canada. The Merchandising Service Team (MST) was developed to ensure a steady pace in maintaining merchandising programs in the stores so they are ‘grand opening ready’ at all times. The teams comprise five to seven store associates who are exclusively trained and focused on merchandising tasks. They are responsible for executing resets and to ‘snake through the store’ to carry out bay servicing according to a precise sequence and schedule that covers the entire store. They must ensure that planograms are properly executed, labels are accurate, and product displays are maintained. They will readjust elevations, reposition products, and provide feedback to management on the merchandising strategies. The stores originally had smaller MSTs; the new system has built upon that program to ensure merchandising execution is consistent and rigorous across all stores. The MST program also benefits vendors because it increases the retailer’s speed to market and all bays and products are serviced regularly resulting in improved quality of merchandising. As well, the teams make sure the store is more attractive and the overall customer experience is enhanced.


The Wooster Brush Company Rebrands

The Wooster Brush Company is undertaking a major rebranding effort throughout 2020 which will include new logo and changes to all packaging and point-of-purchasing (POP) materials. The company says the new look refreshes its brand, offering a cohesive strategy at retail across all channels. The campaign launching to announce these elements is ‘Same Great Product, Bold New Look.’ “We were seeking ways to better tell our story,” says Ben Maibach, vice-president of sales. “We want people to instantly recognize Wooster products and to also understand why to choose Wooster over everyone else — for quality, performance, and results. We believe this new look achieves just that.” The new design features red — the company's primary colour. Newly established icons communicate the key features and benefits of each product. Most notably, the new Wooster logo incorporates a paintbrush into the mark, evoking heritage of the world's first angle sash brush which was introduced by Wooster in 1937. The rebranded products will begin shipping in January 2020.


Investors Support La Coop fédérée

Caisse de dépôt et placement du Québec (CDPQ), the Fonds de solidarité FTQ, Fondaction, and Desjardins Capital will invest $300 million in La Coop fédérée, parent company of Group BMR. The proceeds of capital injection will be used to finance the capital acquisition and capital investment projects of La Coop fédérée and its divisions based on the company’s 2019-2022 strategic goals. La Coop fédérée is a Quebec-based agri-food company.


First Alert Launches Fire Spray

Home safety company First Alert has launched a spray can fire spray. First Alert Fire Spray was developed for consumers wanting a product that is easier to handle than traditional fire extinguishers during an emergency. The spray can design covers a wide surface area and contains a liquid firefighting agent that is effective on common household fires including paper, fabric, wood, cooking oil, and electrical fires. Designed specifically for developing fires, the point-and-spray technology means there are no pins to pull or levers to squeeze. The product is designed for one-time use and the patented discharge technology features an internal pouch that isolates the contents from the pressure. When the spray nozzle is pressed, only the contents are released and the propellant stays inside the can so that the fire is not agitated.


Softening Market Hurts Huttig Sales

Huttig Building Products, Inc. had net sales of $215.7 million for the third quarter of 2019, a decrease of 2.8 per cent compared to net sales of $222 million in the third quarter of 2018. The decrease was primarily attributed to a modest softening in certain market segments and a competitive pricing environment, particularly among commodity products. Millwork product sales decreased five per cent in the quarter compared to last year; building products sales increased 3.6 per cent; and wood product sales decreased 22.7 per cent. The company had gross margin of $44.7 million in the quarter compared to $44.6 million in the year-ago period. Adjusted EBITDA was $5.3 million versus $5.5 million last year.


Sales Rise At Simpson Manufacturing

Simpson Manufacturing Co., Inc. had consolidated net sales of $309.9 million for the third quarter of 2019, an increase of 9.1 per cent from net sales of $284.2 million in the third quarter of 2018. North American sales increased 10.7 per cent year-over-year. Gross profit was $137.6 million for the quarter, up 2.8 per cent over gross profit of $133.9 million in the year-ago period. North American gross margin decreased to 45.6 per cent from 48.8 per cent last year, primarily due to increases in material, factory, overhead, and labour costs. Overall income from operations was $61 million, an increase of 2.2 per cent from $59.7 million last year. Consolidated net income was $43.7 million compared to $44.4 million.


November 1, 2019

Cash Payments Continue Decline

Cash payments continue to decline in favour of digital payment types, says the annual ‘Payments Pulse Survey: Small Business Edition’ from Payments Canada. The survey says nearly 80 per cent of small businesses are conducting fewer than 25 per cent of their transactions in cash, compared to 65 per cent in 2018. The year-over-year jump signals that cash is continuing to lose ground as a preferred method of payment as consumers increasingly choose alternative payment options. However, despite this decrease in the number of cash transactions, most (71 per cent) small businesses still feel an obligation to continue accepting cash as a method of payment and more than half (61 per cent) consider accepting cash as a key to their success. Businesses say the most efficient forms of payment methods to process are non-cash transactions, including eTransfers (27 per cent), cheque (17 per cent), credit card (19 per cent), automated funds transfer/direct deposit (14 per cent), and debit (six per cent). As well, 68 per cent of small businesses could be encouraged to adopt digital payments within their business, particularly if they have a clear return on investment (36 per cent).


Castle Launches Hockey Giveaway

Castle Building Centres Group Ltd. has launched its ‘Canadian Hockey Giveaway’ with a prize of two tickets to the Canadian 2020 NHL game of the winner’s choice. Contestants must follow Castle on Instagram and tag three friends to be entered into the draw. The contest is open from November 1 to 30 and the winner will be selected on December 2. Visit Castle’s Instagram page


HDI Completes Pacific Mutual Door Acquisition

Building products distributor Hardwoods Distribution Inc. (HDI) has completed its previously announced acquisition of Pacific Mutual Door Company. “This strategic acquisition brings with it a highly profitable business model and increases our existing presence in the attractive door and related millwork product category,” says Rob Brown, president and CEO of HDI.


ADP Launches Payroll Platform

ADP Canada has launched its ‘Workforce Now On the Go’ platform to help small business owners run payroll and manage time on their mobile phone, tablet, or desktop. The platform enables business owners to generate key insights into earnings, deductions, and taxable benefits to verify payroll. Employee hours and payroll data at both the company and employee level can also be viewed using the solution’s summary dashboard.


All Segments Down At Weyerhaeuser

Weyerhaeuser Company had net sales of $1.7 billion for the third quarter of 2019, a decrease over net sales of $1.9 billion in the third quarter of 2018. Net earnings for the quarter were $99 million compared to $255 million in the year-ago period. Adjusted EBITDA was $308 million versus $505 million. The timberlands segment had sales of $523 million for the third quarter, down from $532 million in the second quarter. The real estate, energy, and natural resources segment had net sales of $69 million compared to $81 million in the second quarter. Wood products had net sales of $1.2 billion compared to $1.3 billion.


Ingersoll-Rand Has Increase

Ingersoll-Rand plc had net revenues of $4.34 billion for the third quarter of 2019, an eight per cent increase over net revenues of $4.03 billion in the third quarter of 2018. Operating income for the quarter was $623 million with an operating margin of 14.3 per cent, up six per cent and down 30 basis points, respectively, over operating income of $587 million with an operating margin of 14.6 per cent last year. The climate segment had a seven per cent increase in revenues and the industrial segment had a 10 per cent increase in revenues. Revenue was strong in both commercial and residential HVAC.


October 31, 2019

BoC Maintains Overnight Rate

The Bank of Canada (BoC) maintained its target for the overnight rate at 1¾ per cent. The bank rate is correspondingly two per cent and the deposit rate is 1½ per cent. The BoC kept the rate static due to the state of the global economy which further weakened as ongoing trade conflicts are restraining business investment, trade, and global growth. Growth in Canada is expected to slow in the second half of this year to a rate below its potential, says the BoC. This reflects the uncertainty associated with trade conflicts, continuing adjustment in the energy sector, and the unwinding of temporary factors that boosted growth in the second quarter. Business investment and exports are likely to contract before expanding again in 2020 and 2021. At the same time, government spending and lower borrowing rates are supporting domestic demand and activity in the services sector remains robust. Employment is showing continuing strength and wage growth is picking up, although with some variation among regions. Consumer spending has been choppy, but will be supported by solid income growth. Meanwhile, housing activity is picking up in most markets. The BoC continues to monitor the evolution of financial vulnerabilities in light of lower mortgage rates and past changes to housing market policies.


Canfor To Go Private

Canfor Corporation has decided to become a privately-held company. The Vancouver, BC-based forest products company has entered into an arrangement agreement with Great Pacific Capital Corp., based on the recommendation of an independent committee of Canfor’s board of directors. Great Pacific Capital is a bank holding company for the Jim Pattison Group, also based in Vancouver. Under the terms of the agreement, Great Pacific, which along with its affiliates owns approximately 51 per cent of the issued and outstanding common shares of Canfor, will acquire all of the Canfor shares it does not already own by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia). The companies plan to hold a meeting in December to consider the transaction. The transaction is subject to shareholder and court approval. Canfor shares will be cancelled from trading on the TSX following closing of the transaction, which is expected to be before year-end.


Value, Performance Drivers For Coating Products

Demand for protective coatings and sealers is projected to increase 5.1 per cent per year to $25.2 billion in 2023, says the ‘Global Construction Chemicals’ study by Freedonia Group. Growth will be boosted by ongoing gains in construction activity globally, as well as increasing demand for higher value, better performing products with improved functionality. Demand for products manufactured with more environmentally friendly solvents and low or no VOCs in order to improve indoor air quality will also drive demand as will the continued trend for sustainability. Products that are easy to apply, dry quickly, and last longer will lead in market share. Innovation such as self-cleaning and biocidal products will help maintain growth in this market.


National Gift Card Rebrands As NGC

National Gift Card, a provider of automated prepaid technology, has rebranded as NGC. The Chicago, IL-based company serves the B2C and B2B gift card marketplace by sourcing, delivering, and managing over 500 physical and digital retail brands across North America for the loyalty, consumer reward, healthcare, financial, and insurance industries in Canada and the U.S. With over half of its card activations coming from its eGift portfolio, NGC anchored the new branding on its digital technology expansion which powers its proprietary gift card ordering portal, gift card API platform, mobile fundraising program, and B2C and B2B eCommerce websites and mobile apps for merchants. When the company acquired Benefit Mobile in 2018, it added an array of branded currency service solutions, such as gifting and self-use features, 'shop & earn' integrations for loyalty programs, mobile wallet integration, and gift card malls. Additionally, the company will launch a state-of-the-art gift card API service in early 2020.


Schneider Electric Launches Electricity Monitoring System

Schneider Electric has launched Wiser Energy, an integrated monitoring system for residential homes. The internet-connected device tracks and monitors energy activity and use to provide real-time, easy-to-understand data so homeowners can make their homes greener and more efficient – all through a mobile app. The product will help Canadians identify extra electricity consumption, understand how much electricity is being used, and remotely monitor appliances. The unit connects to a residential electrical panel and Wi-Fi network. Over time, the system learns about a home to identify appliances and energy use patterns. The app can help homeowners determine how they can change their habits to use energy smarter. The system can also provide instant customizable alert notifications.


Trex Sales Up 17 Per Cent

Trex Company, Inc. had consolidated net sales of $195 million for the third quarter of 2019, up 17 per cent over net sales of $166 million in the third quarter of 2018. Trex Residential Products net sales increased 24 per cent to $183 million and Trex Commercial Products contributed $12 million to consolidated third quarter sales. Consolidated gross margin for the quarter was 42.4 per cent, representing gross margins from Trex Residential Products and Trex Commercial Products of 43.4 per cent and 26.5 per cent, respectively. Net income for the quarter was $42 million, up 42 per cent over net income of $29 million in the year-ago period. Gross profit was $82 million compared to $67 million.


Lower Pricing Reduces Dow Sales Results

Dow had net sales of $10.8 billion for the third quarter of 2019, a decrease of 10 per cent over net sales of $12.7 billion in the third quarter of 2018, driven primarily by lower energy prices. Operating EBIT was $1.2 billion for the quarter with EBIT margin of 10.4 per cent compared to $1.6 billion and 12.7 per cent. The packaging and specialty plastics segment had net sales of $5.1 billion versus $6.2 billion in the year-ago period. The performance materials and coatings segment had net sales of $2.3 billion versus $2.6 billion last year. Volume growth for the segment in Asia Pacific and the U.S. and Canada was more than offset by local price declines in all geographic regions.


October 30, 2019

GTA New Home Market Continues Recovery

Single-family home sales, with 954 detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses) sold in the Greater Toronto, ON, Area (GTA), were up 283 per cent from last September and just five per cent below the 10-year average, says the Building Industry and Land Development Association (BILD). There were a total of 3,061 new home sales for the month, up 73 per cent from September 2018 and six per cent above the 10-year average. Condominium apartments in low, medium-, and high-rise buildings, stacked townhouses, and loft units accounted for 2,107 new home sales, up 39 per cent from September 2018 and 12 per cent above the 10-year average. With a number of new projects coming to market, remaining inventory increased from the previous month to 18,745 units. Remaining inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings. BILD says the degree of improvement in both new home sales and new project openings this year has been contained, however, and there are no signs of overheating in the market.


Consumers Want To Be Understood During Holidays

Consumers want to be understood by brands, especially during a hectic shopping period like the holiday season. Specifically, 75 per cent of consumers wish retailers better understood their preferences and used that insight to send personalized offers, says research from customer data and engagement technology provider RedPoint Global. Personalization is also proven to drive purchases. Nearly 60 per cent of consumers are more likely to purchase from retailers who send them personalized content and offers. Shoppers have higher expectations for brands when they are members/subscribers. Of consumers that are loyalty members, 74 per cent expect brands to understand their needs and expectations better than other retailers where they are not a member. Getting to know consumers pays off, however. Over a third of consumers remain loyal to their ‘go-to’ brands for holiday shopping. This group say they exclusively purchase from retailers that they have shopped with in the past.


Amazon Canada Offers Business Services

Amazon Canada is now offering its Amazon Business and Business Prime across the country. Companies of all sizes can use the platforms to manage procurement and purchase supplies where Amazon Business is available. Selling partners have the opportunity to grow their businesses by reaching customers across nine countries. Amazon Business features offers, pricing, and quantity discounts, as well as tax exemption, for qualifying purchases. Selling partners also benefit from Amazon's eCommerce expertise, gain visibility of their full product catalogue on an established online store and have greater access to business customer decision-makers to help grow sales. Business Prime is an annual membership program designed for Amazon Business customers and features premium delivery services on their business account. Amazon Business is now live in Canada, the U.S., Germany, the UK, France, Italy, Spain, Japan, and India.


DEWALT Relaunches ToughSystem

DEWALT has launched the ToughSystem 2.0 Radio & Charger, the first product in an upcoming relaunch of the original ToughSystem product line, first announced in 2011. More information will be available on the rest of the line in early 2020. The radio features dynamic range control that gives users the optimal sound for indoor or outdoor use, via selectable settings. It incorporates four integrated, high-performance full-range speakers, an active subwoofer, and passive bass resonator, all driven by a 55W RMS amplifier to provide audio clarity. Compatible with all existing ToughSystem and future ToughSystem 2.0 modular storage solutions, the radio interface is intuitive and with robust stacking and locking side latches, it’s easy to assemble and disassemble. Integrated Bluetooth connectivity enables the radio and music from mobile devices to be controlled remotely via the DEWALT Sound Systems mobile app. A 2.1A USB port is included on the radio for mobile device charging while a large compartment on top provides storage and protection for a battery, phone, and the included AC power cable.


Architectural Segment Drives AWI Sales

Armstrong World Industries, Inc. (AWI) had net sales of $277.1 million for the third quarter of 2019, an increase of six per cent over net sales of $260.5 million in the third quarter of 2018. Sales were driven by higher volumes in the architectural specialties segment and higher mineral fibre average unit value (AUV). Operating income for the quarter was $113.3 million, up 39 per cent over operating income of $81.3 million in the year-ago period. Earnings from continuing operations were $90.7 million compared to $64.2 million, up 41.3 per cent. EBITDA was up 13.4 per cent for the quarter to $114 million and net income was up 14.8 per cent to $68 million. The architectural specialties segment EBITDA was up 18.1 per cent year-over-year and the mineral fibre segment EBITDA was up 12.7 per cent.


3M Sales Decline

3M had sales of $8 billion in the third quarter of 2019, down two per cent over sales of $8.2 billion in the third quarter of 2018. Total sales grew 4.7 per cent in the healthcare segment and 1.7 per cent in consumer, with declines of 4.4 per cent in transportation and electronics and 5.7 per cent in safety and industrial. Sales in Canada grew 0.6 per cent. Third-quarter operating income was $2 billion for the quarter, consistent with the prior-year period. Operating margins were 25.2 per cent. Net income was $1.6 billion for the quarter versus $1.5 billion last year.


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