Existing home sales improved in October
According to data released Monday by the National Association of Realtors (NAR), existing-home sales in October rose 1.4% to a seasonally adjusted annual rate of 4.97 million.
Compared to a year ago, the current figure is up 13.5%.
“Home sales have been stuck in a narrow range despite several improving factors that generally lead to higher home sales such as job creation, rising rents and high affordability conditions," said Lawrence Yun, NAR chief economist. "Many people who are attempting to buy homes are thwarted in the process."
An ongoing positive trend is a steady decline in the number of homes on the market, according to the NAR. Total housing inventory at the end of October fell 2.2% to 3.33 million existing homes available for sale, which represents an 8.0-month supply at the current sales pace, down from an 8.3-month supply in September. Inventories have been trending gradually down since setting a record of 4.58 million in July 2008.
Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Nov. 18, 2011
*Western – regional species perimeter foundation; Southern – regional species slab construction.
Crow’s Market Recap — A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow’s Weekly Market Report.
Lumber: Another mid-week buying spree firmed SPF lumber prices. Demand came from a broad range of customer segments. Distributors purchased fair volumes, while wholesalers reported buying and selling at an elevated pace. The rate of sales activity in the Southern Pine lumber market was somewhat less than the week prior, but varied from mill to mill. Having purchased the week prior, some buyers stepped to the sidelines. Others purchased moderate volumes, having missed the bottom. Increased demand, particularly at mid-week, firmed Coastal species lumber prices and sent many of them higher by Friday. Elevated sales activity and limited production headed into the holidays tightened available supplies, causing a degree of "panic" buying. Pre holiday buying and an improved futures market were said to be the causes for a slight rally in Inland species lumber markets. The week started out slow, with much the same enthusiasm as previous weeks. Buyers stepped in mid-week and covered some immediate needs. Availability of Idaho White Pine boards was thin and prices were firm. Prices for Spruce-Lodgepole Pine boards were mostly unchanged. A mid-week flurry of activity added a momentary air of excitement to the board market and allowed producers to clean up some items. Ponderosa Pine producers reported order files into the end of December for 5/4 Mldg&Btr. Most suppliers report order files for Radiata Pine Mldg&Btr are through December. More Western Red Cedar producers felt the market slipping gradually into the winter doldrums. Conversations between producers and customers turned more toward next year, with relatively little business being placed for the remainder of this year.
Panels: Producers of OSB reported improved market activity in most regions. Not a lot of volume purchases were reported, but traders indicated good success with small back-to-back orders. Buyers continued to purchase Southern Pine plywood in enough volume to push prices higher and mill order files further out. Rated sheathing prices $10-20 higher were typical, while order files extended into early December and as far out as the week of 12/12. Relatively strong sales activity in the Western Fir plywood market prompted producers to raise prices on sheathing panels. Participation from customers in the East was key to mill order files extending out into the week of December 5. Canadian plywood was sold in a narrower trading range than last week. Although the volumes purchased were on the light side, mills were able to extend order files to the week of Dec. 5 Particleboard and MDF sales were lackluster, something expected by producers and buyers this time of the year. As has been the case for months, producers in the East sold output more readily than those located in the West.
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Sales rise but profits fall at CG&P
Central Garden & Pet, a leading supplier of seeds, pottery, insecticides and other outdoor living products, reported net sales for its fourth fiscal quarter of $376.9 million, a 9% increase over the comparable period in fiscal 2010. The company’s operating loss was $4.6 million for both the fourth quarter of 2011 and 2010.
Sales gains were driven by the garden products segment, which reported net sales for the quarter of $165.1 million, a gain of 24% over the fourth quarter of 2010.
The garden products segment’s branded product sales increased $31.6 million, or 27%, to $148.5 million, while sales of other manufacturers’ products were $16.6 million, in line with the fourth quarter of 2010. The company’s gross and operating margins were adversely impacted by higher raw material input costs during the quarter. The garden products segment’s operating loss during the quarter was $6.9 million, compared with an operating loss of $7.6 million in the fourth quarter of 2010.
In fiscal-year reporting, Central Garden & Pet posted net sales of $1.6 billion for 2011, an increase of 7%, compared with $1.5 billion in the comparable 2010 period. Branded products sales were $1.4 billion, up 9% over the comparable 2010 period. Sales of other manufacturers’ products decreased 4% to $253.0 million.
Net income for the fiscal year ended Sept. 24 was $28.3 million, compared with $45.8 million in the comparable 2010 period. Operating income totaled $85.2 million compared with $109.1 million. The company’s gross and operating margins were adversely impacted by higher raw material input costs throughout the fiscal year.
"We are pleased with our top-line growth in a tough quarter, but are dissatisfied with the bottom line," said Bill Brown, the company’s chairman and CEO. "As highlighted on our last quarterly call, we have committed to a broad set of transformation initiatives that are expected to take significant cost out of the company, improve margins meaningfully and enable more aggressive reinvestment in our brands to drive top-line growth. Gus Halas, president and CEO of Central Operating Companies, who joined us in April, is already well underway in reshaping Central from what was essentially a portfolio of siloed companies, into a single, more integrated company that can better meet the needs of customers and deliver substantially better results for shareholders."
Halas also commented in a prepared statement: "We have a roadmap for improved financial performance beginning in the second half of calendar 2012 and into 2013. We expect to update shareholders on our progress in the coming quarters. Central is already on a dramatically different path than it has ever been before, and we expect it to lead to sustained growth and improved profitability well into the future."
Based in Walnut Creek, Calif., Central Garden & Pet is a supplier of lawn, garden and pet products under a variety of brands, including Pennington, Kaytee, Amdro, Sevin, Ironite, Norcal and New England Pottery.