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Black Friday Wrap-Up: A Look At Winners And Losers

 November 26, 2012 03:00 PM

(By Mani) The strong Black Friday sales set a positive tone pointing to mall traffic gains, double-digit e-commerce gains, and a 13 percent increase in total sales from Thursday-Sunday.

Black Friday, which is considered as the official start of the holiday shopping season, saw decent post-doorbuster shopping activity -- a change from the past 5 years. Since 2007, shoppers flock to stores early to take advantage of doorbuster deals, but would then go home once those deals were over.

Shopper Trak says store visits grew 3.5 percent, but retail sales declined 1.8 percent. America's Research claims Black Friday traffic increased 20 percent, but did not provide a sales estimate.

National Retail Federation (NRF) says that traffic to both stores and websites in the post-Thanksgiving weekend was up 9 percent, and total spending was up 13 percent. IBM Benchmark says that online sales grew 17 percent on Thanksgiving and 21 percent on BlackFriday.

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ComScore says that online sales grew 26 percent on Black Friday while Chase Paymentech says that online transactions grew 30 percent on Black Friday, but average ticket was down 11 percent. ComScore also says that digital content and subscriptions were up 29 percent.

Not surprisingly, lines were deepest for electronic products, including TV's, tablets, laptops, digital cameras, printers, and video games. While household and kitchen appliances were solid, electronics were once again the strongest category.

"Overall, we believe the traditional holiday shopping kick-off proved successful for the Opco Specialty Retail Universe," Oppenheimer analyst Pamela Quintiliano wrote in a note to clients.

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Several retailers such as Aeropostale Inc. (NYSE: ARO), Gap, Inc. (NYSE: GPS) and Old Navy switched promotions while the majority of others maintained Friday levels. Once again, Abercrombie & Fitch Co. (NYSE: ANF) and Hollister were the clear winners in terms of traffic and conversion followed by Aeropostale.

"NWY continues to have the highest level of traffic and gift-giving conversion among the misses, Quintiliano said.

While New York & Company Inc. (NYSE: NWY) was a winner, Ann, Inc. (NYSE: ANN) may potentially prove to be the most disappointing as traffic never fully materialized on stable promotions.

Coming to discount retailers, sales were generally positive on Black Friday, with Target Corp. (NYSE:TGT) appearing to perform the best. Target's store traffic looked much improved over last year, and seemed to build as the day continued. However, traffic seem to have decelerated quickly at Target after top items sold out in the first 2 hours.

On the other hand, Wal-Mart Stores, Inc. (NYSE: WMT) reported its best ever Black Friday events with nearly 10 million transactions (5,000 per second) being processed between 8PM-Midnight. Top items were gaming consoles, video games, DVDs, Furbys, Crock Pots, big screen TVs, tablets, laptops, and digital cameras.

"The Walmart stores we visited showed improved traffic over last year, though we would not necessarily call them very busy," BMO Capital Markets analyst Gerrick Johnson wrote.

Meanwhile, Foot Locker, Inc. (NYSE: FL) also had one of the most positive Black Friday sales. Foot Locker will benefit from several impactful launches of premium priced new basketball shoes last week. Nike, Inc. (NYSE: NKE) launched a new Jordan Retro shoe (Jordan IV) that sold out in a pre-sale earlier in the week.

In addition, it is a positive Black Friday checklist for Macy's, Inc. (NYSE: M) and Nordstrom, Inc. (NYSE: JWN).

"In our view, both Macy's and Nordstrom should benefit from a positive holiday weekend combination of: 1) solid observed traffic trends at A-malls; 2) strong ecommerce data (ecom is 9-10% of sales for both M & JWN, respectively)," UBS analyst Michael Binetti wrote.

Nordstrom should also benefit from the lowest exposure to Hurricane Sandy-impacted regions in early November.

"We are forecasting +3% and +5.8% November SSS for Macy's and Nordstrom, respectively, and believe there is upside to both forecasts," Binetti added.

Kohl's (NYSE: KSS) had a combination of solid industry traffic levels, higher inventories and visibly higher promotions compared to last year that would boost its November sales update this week.

"We are slightly raising our SSS estimate for November to +3% from +2% previously. We saw heavy traffic levels for the midnight open at the stores we visited on Black Friday. Store staff commented that traffic remained heavy until the early morning hours (~4am)," Binetti added.

At J. C. Penney Company, Inc. (NYSE: JCP), the results were a little bit mixed. Though, it witnessed visible crows, it suffered from opening hours disadvantage. J.C.Penney opened at 6am this year compared to 4am last year and compared to midnight for Kohl's and Macy's this year. The company's decision to open much later than the competition was a significant traffic disadvantage for the company on Black Friday.

"We believe JCP's later start time (6AM) led to lost market share likely at the expense of Macy's, which had solid and sustainable traffic throughout the weekend based on our observations," Deutsche Bank analyst Charles Grom said in a client note.

The traffic at Big Lots, Inc. (NYSE: BIG) on the stores opening was less than what we witnessed at other retailers, but we note that the stores are open all day on Thanksgiving, with certain specials driving customers to the stores that day.

"Given the solid performance BIG saw last year in November, we believe this year performance will be in-line at best compared to last year," said Grom who added that the overall Black Friday traffic was strong despite earlier Holiday opening hours and tough macro conditions.



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