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Black Friday weekend sales data from third-party analytics providers indicate a merry start to the holiday season — with online sales taking more share.
Four-day Black Friday weekend sales totaled about $60bn, according to Customer Growth Partners. Consumer electronics and appliance sales rose 6.4 percent, vs CGP’s estimate of 6.1 percent growth, while apparel sales rose 5.4 percent, in line with the firm’s projection, but still the best growth since 2011.
Meanwhile, deal hunters were rewarded with promotions at least as good as last year, many analysts say, citing channel checks. Nomura Instinet’s Simeon Siegel is a bit more bearish on this front, writing in a note that retailers’ offering of 40 percent to 50 percent off "hardly seems a win." He believes that Black Friday is no longer a period of excitement for managers, but more a period of anguish.
Here’s what other Wall Street analysts are saying about this weekend’s results.
KeyBanc; Edward Yruma, Bradley Thomas, Brett Andress
"We think the holiday shopping season got off to a healthy start," with signs pointing to potential for a "strong" season.
"Online continues to grab incremental share given the normalization of promotions across physical and digital channels." "The shifting of promos earlier and online was a notable trend."
Telsey Advisory; Dana Telsey, Joseph Feldman
"With Holiday offerings and promotions starting just after Halloween, Black Friday didn’t have the same sense of urgency as in the past."
Cowen, John Kernan
"Thanksgiving holiday 2018 demonstrated the ongoing shift towards online from brick & mortar and the continued willingness among consumers to spend their discretionary dollars on apparel, footwear, accessories and electronics."
"If there was one takeaway from area mall visits — "Lululemon was the foot traffic champion by an enormous margin, impressive given the brand was not promotional."
Despite the outcome of the holiday season, Cowen says that "tariff and supply chain issues could create uncertainty over initial guidance for 2019 across the entire sector, which is likely to limit near-term valuation multiple expansion and create volatility."
Wells Fargo, Ike Boruchow, Tom Nikic
"All in, on the heels of declining sentiment and growing fears across the retail space, the traffic/pricing data points coming out of last week’s important holiday selling period are very encouraging, in our view."
"This all comes as ecommerce sales were likely robust as well."
"On top of the solid traffic, what we found to be equally as compelling was a fairly consistent pricing cadence during Black Friday Weekend (very similar to last year and much better relative to 2016 and 2015)." While promotions continued to begin even earlier this year (85 percent of concepts offered BF deals before Thursday vs. 81 percent LY), "overall promotions were essentially flat to slightly lower YoY."
Most positive callouts from Black Friday Weekend: Lululemon, Ulta, Ralph Lauren and Foot Locker.
Nomura Instinet, Simeon Siegel
"Unfortunately, as we’ve been discussing, worse-than-feared inventory forced a flat-to-worse" promotional environment for this year’s Black Friday.
"For those able to hold flat, 40- to 50-percent off hardly seems a win; we believe Black Friday has gone from a period of mgmt. excitement to anguish."
Nomura’s proprietary SKU tracker showed that 80 percent of the monitored companies offered more on sale online Black Friday 2018 than last year. Only Sally Beauty Holdings Inc., Fossil Group Inc. & Gap brand had fewer products.
BI, Poonam Goyal, Jennifer Bartashus, Morgan Tarrant
"Black Friday weekend sales drew crowds online as sales surpassed Adobe estimates, climbing 25 percent from a year earlier," Bloomberg Intelligence analysts wrote in a note. Digital sales are expected to accelerate today, "exceeding Adobe’s high-teens sales expectations."
"In channel checks, we saw stores draw traffic on Black Friday, comparable to levels we saw in 2017." "Traffic was patchy on Thanksgiving, yet notably more robust at Walmart vs. Target." Target, Walmart and Costco on-store traffic levels may have been hurt given that many doorbuster promotions available online and in stores.
"Leaner inventory positions should aid retailers’ margins, but mounting shipping costs will offset." "Retailers with easy-to-navigate mobile platforms are likely benefiting from better conversion," including Kohl’s, Macy’s, Target and Lululemon.
"Electronics, home goods and cold-weather athletic wear were the items most sought by buyers," according to BI channel checks.
Barclays, Matthew McClintock
"Similar to last year, we found both the promotions and promotional level for Black Friday weekend to be largely uninspiring."
"Online sales were the biggest winner for this year’s Black Friday weekend," "Our channel checks indicated that physical traffic was likely down from 2017, even at retailers that have had solid traffic year-to-date such as Target."
"The hottest items this year appeared to be the usual TV deals, although we noted that several retailers appeared to excel at picking up toy market share following the Toys R Us bankruptcy."
Summary of Third-Party Data Providers:
ShopperTrak: Findings indicate that shopper visits resulted in only a combined 1.0 percent year-over-year decline for brick-and-mortar retail stores and shopping centers on Thanksgiving Day and Black Friday, with a 1.7 percent decline in traffic on Black Friday versus 2017.
Adobe Analytics: The Thanksgiving weekend (11/24-11/25) was the biggest online shopping weekend in U.S. history at $6.4bn
Verizon’s Holiday Retail Index showed a 31 percent increase in year-over-year Black Friday eCommerce traffic, but online traffic only increased 3.6 percent on Thanksgiving Day. Traffic rose 33 percent for the Monday, Tuesday and Wednesday period before Thanksgiving.
Customer Growth Partners: "Retailers enjoyed a solid but not spectacular Black Friday shopping weekend, as online and in-store promotions proliferated earlier in the week and on Thanksgiving, cannibalizing sales that once occurred on Saturday and Sunday."
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