Finance

An employee places price tags on Black Friday sale items displayed for the media at a Wal-Mart Stores Inc. location in Burbank, California, U.S., on Thursday, Nov. 16, 2017.

Patrick T. Fallon | Bloomberg | Getty Images

Walmart and Target bucked the overall trend of a calmer Black Friday, as the big box retailers saw strong in-store foot traffic despite a large portion of retail moving online, according to Wall Street analysts.

Black Friday foot traffic declined about 6% since last year, the weakest result since 2014, according to ShopperTrak, but Walmart and Target attracted more in-store shoppers than the industry, analysts said. Meanwhile, online sales for Thanksgiving and Black Friday increased 17% year-over-year, according to Adobe Analytics.

Winners

Target and Walmart were stand-out performers this Black Friday with both retailers reaching strong traffic store-wide, according to most Wall Street retail analysts. Electronics and toys were the hot ticket items at the big box retailers, with a special emphasis on TVs, according to Bank of America.

“We saw healthy traffic levels at Walmart on Thursday night and into Friday, led by the 50″ Roku Smart TV deal and other electronic offerings,” said Deutsche Bank’s research analyst Paul Trussell in a note to clients on Sunday.

Morgan Stanley noted the big retails like Walmart, Target and Best Buy are among the best positioned to handle customers’ shift to buying online. Shares of Walmart have risen 20% in the last 12 months, shares of Target have climbed about 75% since last year and Best Buy is up about 25% in the same period.

“These retailers have become the biggest holiday destinations behind a wide assortment of holiday product, attractive deals, and solid omni-channel capabilities,” said Morgan Stanley equity analyst Kimberly Greenberger in a note to clients on Monday.

Lululemon, who’s stock is up 70% since last year, was another strong performer this holiday, with an “abundance” of clearance racks in stores to drive interest, according to MKM Partners.

“This was the most crowded lululemon store we’ve visited on Black Friday, and hands down it was the most crowded store in the King of Prussia mall,” said MKM analyst Roxanne Meyer in a note to clients Monday. The firm said Lululemon was more strategic this year in its marketing of Black Friday, with lots of emails promoting the sales.

Cowen highlighted department store Nordstrom as another winner of Black Friday with special deals and a strong assortment of products.

“We also noticed JWN had more in-store traffic compared to last year with pronounced customer interest in footwear, and Men’s apparel,” said Cowen’s retail analyst Oliver Chen.

Toymakers were another big winner, according to analysts.

“Retailers cited Frozen as a top seller; shelves were being restocked early Friday during our site visits,” said Jefferies. The firm has a buy rating on Hasbro, the market of the Frozen II dolls for Disney.

Losers

Wells Fargo said some of the laggards of Black Friday were cosmetics store Ulta and clothing company Gap. Old Navy lines were half has long as they were last year, according to Morgan Stanley. Shares of Ulta are down 21% in the last 12 months and shares of Gap are down nearly 40% since last year.

For the first time since MKM Partners can remember, embattled retailer Victoria’s Secret was not a top traffic driver.

“While elevated promotional levels at both Victoria’s Secret and PINK drove strong traffic at PINK relative to most others, we don’t think it did the trick at VS, and expect traffic to be down,” said Meyer. L Brands, which has dropped more than 42% in the past year, owns PINK and Victoria’s Secret.

Goldman Sachs said traffic appeared “very light” at Bed, Bath and Beyond, who’s stock is up 13% since last December.

Retailers were dealt the shortest possible holiday calendar scenario this year, with six fewer shopping days between Thanksgiving and Christmas than there were last year, which prompted retailers to start their promotions earlier, causing a surge in early shopping. Additionally, as the rise of e-commerce continues, consumers are more accustomed to shopping online, where they have “more transparency, more time to plan, and greater inventory availability,” said Chen. This trend softened in-store buying on one of the biggest shopping days of the year.

— with reporting from CNBC’s Michael Bloom.

Products You May Like

Articles You May Like

Dollar General lifts profit forecast, tops third-quarter expectations on sales
Late Thanksgiving cools Campbell soup sales as grocers delay shipments
CrowdStrike rises after beating in its third-quarter results
Billionaire businessman Ken Langone talks about stocks he likes, including JP Morgan and GE
There’s a unit inside Amazon that will be a $31 billion business in four years, RBC says

Leave a Reply

Your email address will not be published. Required fields are marked *