Sales of Kingsford charcoal are a good indicator of how much people are grilling. Charcoal is a key part of grilling season, and Kingsford is very dominant in the charcoal market. That being said, Kingsford sales were down significantly for the most important grilling months of the year.
Clorox, the parent company of Kingsford, just reported Q4 earnings. That’s the quarter ended in June for them, and where they do about 50% of their sales for the year. Unfortunately, that category was down on revenue from the high single digits into double digits.
First I’ll cover, which you all know that our grilling business, the largest quarter we have is Q4. It’s about 50% of our business and it’s a heavily weather dependent business. Unfortunately, for both Memorial Day and July 4, weather was terrible in the U.S., very rainy for Memorial Day and extremely hot for 4th of July and that meant the category was down anywhere from high single-digits to double-digits. And as a result, our Kingsford business came in short of expectations. I don’t look at that as any type of structural issue in Kingsford. We had good merchandising plans and where consumers did pull, we saw good take through. I think that is simply just the effects of weather, and obviously a portion of why we didn’t deliver.
Linda Rendle – Chair and CEO of Clorox
According to Clorox’s data of market share, they only were down on share by a three tenths of a point in June. That means it’s not that consumers were buying other grill brands, the whole category was down.
And again, I think for grilling as we go forward, merchandising plays an important role. Our price gaps look generally in line. Our shares held up. We were down three-tenths of a share point in June. Feel good about where we were despite a bad grilling category season…
Linda Rendle – Chair and CEO of Clorox
Between the low sales for Kingsford charcoal and Middleby’s results, I’m not expecting much from the grill brands that have yet to report this earnings cycle. Traeger reports next week, and beyond grill sales, we’ll see if their consumables business shows the same slowdown as Kingsford.