Business
Here’s what Black Friday sales are telling us about the retail sector – and our top pick
November 28, 2022
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The holiday shopping season kicked off over the weekend as online Black Friday sales beat expectations and started to create a much-needed boost for the retail sector. According to Adobe’s online sales tracker, consumers spent a record $9.12 billion online shopping on Black Friday. This is 2.3% more than last year and well above the expected 1% growth. But this is only one piece of the puzzle. In another preliminary report, Black Friday traffic at brick-and-mortar retail stores grew by about 3% compared to 2021, according to retail tracker Sensormatic, which attributed the increase to increased advertising activity and a “favorable in-store experience.” Even though inflation has hit consumers this year, more than 166 million people planned to shop from Thanksgiving to Cyber Monday, according to the National Retail Federation’s annual survey. This is 8 million more than last year and is the highest estimate since 2017. The final NRF figures are to be released on Tuesday. KeyBanc cited the Sensormatic data in a research note on Sunday, saying that if accurate, the numbers would be higher than what its analysts see. In recent channel reviews, KeyBanc sees that physical retail store traffic was “in-line” compared to last year. Analysts note that this year’s holiday shopping calendar is one day longer than in 2021. Many struggling retailers have benefited from this seemingly strong start to holiday shopping. Goldman Sachs said retailers like Target (TGT) and Bed Bath & Beyond (BBBY) have attracted more shoppers with big discounts on products. In a separate note, Deutsche Bank noted “strong demand for cosmetics” at retailers such as Ulta Beauty (ULTA), Kohl’s (KSS), Victoria’s Secret (VSCO) and Bath & Body Works (BBWI). The clothing trade was also stable. Deutsche Bank analysts said American Eagle Outfitters (AEO) is the leader among teenagers. Other prominent performers included the Gap’s (GPS) Old Navy brand, as well as Abercrombie & Fitch (ANF) and its Hollister brand. The Bottom Line With holiday shopping, we still love discount retailers during these difficult times. We are most optimistic about Club Holding TJX Companies (TJX), which manages TJ Maxx, HomeGoods and Marshalls. Major full-price retailers are facing a glut of inventory that serves as an incredible crop of cheap merchandise that discounters like TJX, Ross Stores (ROST) and Burlington Stores (BURL) can leverage for good profits, but also for profitable sales. deals. clients. In the meantime, many major retailers are still facing overstocking. They ordered too much this year, expecting a repeat of the pandemic shopping boom in 2020 and 2021. But consumer spending has shifted away from shopping for things like eating out and vacation trips, leaving many retailers with too many things left. The bad news for these stores was good news for TJX, which outperformed the overall market this year. We see stronger results ahead. (The Jim Cramer Charitable Foundation is long TJX. See full list of stocks here.) As a CNBC Investing Club subscriber with Jim Cramer, you will receive a trade notice before Jim completes the trade. Jim waits 45 minutes after sending a trade alert before buying or selling shares in his charitable foundation’s portfolio. If Jim was talking about a stock on CNBC, he waits 72 hours after a trade alert is posted before making a trade. THE ABOVE INFORMATION ABOUT INVESTMENT CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY RESPONSIBILITIES OR OBLIGATIONS ARE OR ARISING IN CONNECTION WITH YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT IS GUARANTEED.
Shoppers line up at the checkout counter at a Macy’s store during the Black Friday sales on November 25, 2022 in Jersey City, New Jersey.
Kena Betancourt | Getty Images
The holiday shopping season kicked off over the weekend as online Black Friday sales beat expectations and started to create a much-needed boost for the retail sector.
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