Stock Building Supply reports loss in half-year results
Stock Building Supply, the second largest pro dealer in the United States, reported $89 million in losses for the six-month period ended Jan. 31. This compares to profits of $81 million for the same period a year ago.
Revenues were reported at $1.79 billion, down 25.7 percent from sales of $2.4 billion during the comparable period last year.
As part of cost-cutting moves by parent company Wolseley, Stock closed 22 branches during the six-month period, ending with 286 locations. In July 2007, the pro dealer operated 308 outlets. Stock also reduced its head count during the period by 1,750.
Ferguson, also owned by U.K.-based Wolseley, turned in a stronger performance, with revenues rising 3.2 percent to $5.5 billion. Profits were up by 4.9 percent to $350 million. In response to the slowing residential market in the first half of its fiscal year, Ferguson reduced its head count by 1,575, approximately 6 percent of its total employees.
Revenues for Wolseley Canada increased by 3.7 percent to C$684 million. Profits were lower, however, with a 15 percent drop, from C$41 million a year ago to C$35 million in the current period.
Overall, Wolseley’s revenues increased 2 percent to approximately $15.8 billion during the six-month period. But profits dropped 23 percent to approximately $595 million, which the company attributed to losses posted by Stock.
Wolseley is a worldwide distributor of plumbing and heating supplies and building materials, with operations in 27 countries.
Outdoor power equipment category sees resurgence
The backyard shed is getting a makeover. The marquee categories of spring season outdoor power equipment (leaf blowers, pressure washers, mowers and trimmers) are seeing changes on two major fronts: type of features and channels of distribution.
The mass channel is seeing resurgence in outdoor power equipment (OPE) activity. Particularly in pressure washers, up year-over-year from 5.7 percent share to 11.0 percent share; and riding mowers, up from 4.0 percent to 8.0 percent. Across the major categories, mass merchants gained 2.8 percentage points.
The NPD Group attributes that gain to the mass channel’s ramped up merchandising efforts around the categories, as well as their related merchandising efforts around outdoor living in general, including outdoor fire pits and outdoor furniture.
“The other factor is the 18- to 34-year-old consumer seems to prefer the mass merchants,” said Mark Delaney, NPD Group’s director of home improvement. “And they represent the demographic that is increasingly moving into home ownership.”
Given the steady stream of green promotions at retail, gas-powered products are seeing a plateau or decline in popularity, based on the consumer research — though the combustion engine continues to dominate the walk-behind mower category. Among riding mowers, the zero-turning-radius mower is the new kid on the block, accounting for almost a quarter of units sold in 2007. Zero-turn share has grown from 18.5 percent in 2006 to 24.0 percent in 2007.
“Home owners are increasingly looking for professional grade equipment,” said Delaney. “Zero-turning radius mowers have traditionally been used by pros and have now caught on with consumers in a big way.” It doesn’t hurt that “zero-turn” prices have come down significantly, he said.
The data also suggests that the wealthy OPE customer isn’t the powerhouse demographic, compared to other sectors. The $100K and above segment is handily outspent by the $45K to $74.9K segment.
“That stands to reason,” said Delaney. “The higher income bracket usually has pros take care of their landscaping for them.”
Caterpillar launches pilot at Home Depot
Caterpillar, the Peoria, Ill.-based manufacturer of construction, mining and industrial equipment, has begun a test of its rental outlets with Home Depot in Texas, according to a report in Rental Equipment Register. The online publication reported that more Home Depot test locations will be added this year, although few other details were available.
Home Depot did not immediately respond to a request for comments.
Currently, there are more than 1,600 independently run Cat Rental stores throughout the world, offering construction-related equipment and specialty tools. Caterpillar has stated it would like to grow that number by more than 550 locations over the next three years.
Home Depot operates its own equipment and tool rental departments in approximately 1,200 of its stores. According to the company’s Web site, Home Depot’s rental outlets have more locations than any other tool rental company in the United States.