First quarter results encouraging
Like many other areas, a tone of cautious optimism underlies the numbers. A slight uptick in new home construction and remodeling has driven an increase in the early beginnings of 2010.
Validating the prediction of FCNews’ columnist Lew Migliore, after a few years of hoarding funds, consumers are itching to change the look of their home (FCNews, Jan. 25/Feb. 1). However, it is happening one room at a time, with consumers remodeling what has become an eyesore to them. “People can look at the same floor only for so long,” Migliore said.
Mills agree that the positive trajectory can be attributed to remodeling more so than new construction. “Wood business is up slightly,” Holm said. “Replacement traffic is up, ultimately driving our numbers to increase.”
Luc Robitaille, vice president of marketing at Boa-Franc, makers of the Mirage brand, is seeing consumers a bit more willing to open their wallets. “The first months are better than expected,” he said. “As the economy and housing market improves, consumer confidence in long-term value products is also slowly increasing. People are more willing to spend but at a modest pace. Nevertheless, retail has picked up somewhat and is generating better results than anticipated.”
Shaw also reported taking market share, touting its position as an industry leader, its “Made in the USA” product line and strong service and quality as factors. “The first few months of 2010 are going very well for Shaw hardwood with good momentum in both retail and new home construction,” said Kevin Thompson, hardwood manager.
Mohawk/Columbia are also reporting good things—as good as the slow but steady climb upward can allow. “We are seeing some improvement versus 2009, driven entirely by the residential replacement market,” Buchanan said. “New home construction is still minimal.”
Lauzon is seeing improvement as well. “This first quarter is definitely positive when compared to last year,” LeDuc said. Then again, the first few months of 2009 were considered some of the lowest of the recession.
Anderson spoke more specifically about the factors affecting the first quarter. “January was very slow, driven mostly by reduced store traffic caused by abnormal winter storms,” Woolsey said. “February and March picked up very nicely and sales area up in double digits from 2009. We [believe it is] the response to our new introductions at Surfaces and their immediate success in the marketplace.”
Mullican echoed those sentiments. “2010 has been OK,” said Neil Poland, president. “We believe it to be good news given the terribly cold and snowy weather.” The company was up month over month in January and February, and March is expected to be positive as well.
Indeed, the first few months of the year saw radical storms, crippling even the nation’s capital. “Some regions were particularly hampered by the unusually bad weather this winter,” Call explained. “To the extent the mid-Atlantic and Northeast—both key hardwood markets—were hit by multiple weekend storms, retailers have seen those sales pushed into the future.”