Heating, Air-conditioning & Refrigeration Distributors International (HARDI) released its monthly TRENDS report on Jan. 31, showing that sales by HARDI distributors declined by 7.8% during December 2023 vs. November.

For the year, member distributors saw overall 12-month sales decline by 0.3%.

“December was not the most difficult monthly comparison of the year, but it was the weakest sales decline,” said Brian Loftus, HARDI Macroeconomic & Residential Market Analyst. “The results this month were challenged by one less billing day and heating degree days were off by 20% year-to-year and 20% below normal.”

The Days Sales Outstanding — a measure of how quickly customers pay their bills — was near 43 days during December 2023.  

Loftrus noted that the DSO has a normal seasonality, so comparing corresponding months is best to know what the latest number is portraying. The DSO slipped from 44.5 days during December 2020 to 43.5 during December 2021 and December 2022. The DSO for December 2023 was down to 43.0, which Loftus noted is impressive after the rapid increases in rates and market downshifting.

“This sales growth rate trend looks very discouraging, but that is not what I took from the report,” Loftus elaborated. “From an operating perspective, the sales-to-inventory ratio is improving, and the sales comps are easy during the next six months. Going forward, the pace of existing home sales is turning and mortgage rates are shrinking. This annual growth rate chart will be turning higher very soon.”

HARDI members market, distribute and support heating, air-conditioning and refrigeration equipment, parts and supplies. HARDI epresents more than 460 distributor members, which represent over 5,000 branch locations, and close to 500 supplier, manufacturer representative and service vendor members.