Third quarter retail report: Reviews a mixed bag for flooring, home furnishings

Home Inside FCNews Third quarter retail report: Reviews a mixed bag for flooring, home furnishings

September 12/19, 2016: Volume 31, Number 7

By Lindsay Baillie

As the third quarter winds down, projections point toward slightly slower retail activity in the home furnishings sector compared to the second quarter. According to the U.S. Census Bureau, total retail sales in the U.S. this year declined 0.3% in August compared to July. Analysts say this marks the first decline in five months as sales dropped for almost all sectors, with the exception of grocers and clothing stores. Within the home furnishings category in particular, home-improvement centers saw a decrease of 1.4%, and furniture and home furnishings sales fell 0.7% during the same period.

Several flooring dealers contacted by FCNews are anticipating an overall increase in the third quarter. Some say this is fueled by the surging luxury vinyl tile/WPC category. Eric Langan, president and owner of Carpetland USA, with multiple stores in Iowa and Illinois, said the third quarter has been successful, in particular August, which saw revenue increases of 20% above the year-ago period. He noted the retail and commercial contract sectors were particularly healthy.

Ted Gregerson, president and owner of Ted’s Abbey Carpet & Floor, with stores in Anniston and Birmingham, Ala., has seen a 12% increase in the third quarter. He attributes this increase to new business. “We have picked up a few small commercial jobs this past quarter.”

Kevin Rose, president and owner of Carpetland USA, Rockford, Ill., reports an uptick in sales during the third quarter—primarily due to an increase in advertising spending. “The third quarter is faring well. Our team is very upbeat and positive. I am very pleased with hard surface sales so far this quarter.”

Carlton Billingsley, president and owner of Floors and More in Benton, Ark., said the third quarter has been “very strong with sales up and commercial flooring backlog growing.”

Adam Joss, vice president of The Vertical Connection Carpet One, in Columbia, Md., said the third quarter was solid. “September has been a pretty strong month.”

Not everyone reported increases during the period, however. Signs of softness emerged at HOM Furniture, Coon Rapids, Minn., which has seen flat retail sales for both its flooring and furniture departments. However, the company’s commercial flooring business is much more robust, according to Kelly Cosgrove, flooring buyer.

In that same vein, Tim Schoolfield, owner of Country Side Carpets Flooring America in O’Fallon, Mo., attributed the softness in his sales to the weather. “It was a hot and sloppy wet summer here in the Midwest, and [the] last thing people were thinking about was replacing their floors.”

Olga Roberston, president of FCA Network, defined business as flat in Chicago. Looking ahead, she predicts the fourth quarter will be the same.

All in all, many flooring retailers FCNews interviewed feel 2016 will end with a flourish. Abbey’s Gregerson is particularly positive about the upcoming quarter. “Our expectation is we’ll be up a few percentage points in the fourth quarter. We are busy at the moment, and we are putting more money into advertising in October and November.”

Joss said the fourth quarter looks strong. “I don’t see anything on the horizon that would cause a slowdown. We haven’t sensed any hesitation in customers.”

Despite Country Side Carpets Flooring America’s anemic third quarter, Schoolfield said the fourth quarter looks good. “The weather is great and people are thinking about fixing up the house before the holidays.”

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