Product and Service

Companies included in retailer-house, lawn& garden equipment sector in home and garden tools and equipment industry primarily are retailers selling home appliances, lawn and garden equipment, tools, and hardware.


Demand for Product and Service

As indicated by typical sales data, the demand for lawn and garden seems to being declining in the past two years while the demand has been solid. It is probably a result of increased selling price (less promotion/rebate). However, it is more likely to be due to declining demand.  

The Sector

Sector’s current, trend, causes behind trend, and future

Current and Trend

  • Generally, the demand for lawn and garden tools and equipment has presented downward trend in the past two years as indicated by the typical retailer’s data of comparable sales.
  • The declining materials costs seem giving more space to companies in this industry to lower the price of their products.
  • We have seen increasing consolidation activities in the recent years.

Causes behind the trend

Considering increasing industry concentration, the current pressure of sales may be a reflection of decreasing demand, which has probably been related to general economic and demographic changes, growth in household income, and change in housing market.

Industry Future

Downward trend in this sector may not be able to make a quick turn considering the current situation in economy and housing market.



General Financial Performance of Companies In the Sector

The typical company’s data indicates that demand for lawn& garden tools and equipment has significantly declined since 2015. This has been reflected by the decreasing comparable store sale. The typical growth rate of comparable sales was -1%, -4.5% and -7% for 2015, 2016, and 2017 respectively. And the significant decrease in store sales also caused many stores to be closed.

Due to the deleveraging of occupancy costs as a result of the significant decrease in sales, the companies’ gross margin thus decreased significantly and the typical gross margin is about 19% in 2017. The typical operating margin went down to about -5% with a SG&A as percentage of sales of about 25%.

The typical average stock Price/sales ratio is: 0.05(debt/asset ratio of 27%).

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