Retail watch: Black Friday winners, Cyber Monday buzz and eyes on discounting

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The reports on Black Friday sales volume and traffic indicated that sales were solid as expected, but more importantly the level of discounting appears to not be as bad as feared.

Telsey Advisory Group analyst Dana Telsey noted that what different about Black Friday Weekend 2023 was that it started earlier with promotions beginning in mid-October. “Expectations were tempered following the barrage of earnings reports over the past two weeks highlighting a cautious, choiceful, and discerning consumer, inventory was in good shape, and price reductions of 30%-40% on average were not alarming,” she noted.

Bank of America pointed to solid traffic at Walmart (WMT), Target (TGT), and Costco (COST) on Black Friday. Analyst Robert Ohmes said Walmart (WMT) and Target (TGT) traffic was particularly strong in electronics, toys, and grocery for the stores the BofA team visited.

Jefferies Randal Konik updated that Abercrombie & Fitch (ANF) continued healthy full-price selling during Black Friday and into Cyber Monday. He said Abercrombie & Fitch’s (ANF) promos are down this year from 30% off everything last year to 25% off everything, while Hollister and A&F Kids’ promos are flat year-over-year. Looking ahead, the firm believes that ANF is well-positioned to drive strong margins and finish the year strong. Gap (GPS) was also called well-positioned after promo levels across Banana Republic and Gap were flat, and decreased at Old Navy decreased. “We believe the new CEO, Mr. Dickson, has positioned GPS for its turnaround story, putting the company on the right track to drive continued improvements ahead,” updated Konik. Elsewhere, promos were noted to be flat at Academy Sports and Outdoors (ASO), Dicks Sporting Goods (DKS), and Yeti Holdings (YETI) this year.

In terms of hot brands, Mattel’s (MAT) Barbie line of toys and On Holdings’ (ONON) line of shoes have been called out by several firms as racking up big sales over Black Friday and into Cyber Monday. E-commerce platform Shopify (SHOP) was also a big Black Friday winner with a record sales tally.

Looking ahead, Cyber Monday online sales are expected to smash the old record, but there are some concerns if the strong Black Friday and online sales trends will continue or if consumers sapped up all their energy looking for early bargains. In terms of the calendar effect, with Christmas falling on a Monday this year, it marks the longest possible period between Thanksgiving and Christmas at 32 days, which historically has seen a deeper lull and more last-minute shopping given a full weekend before December 25. Adding it all up, the SPDR S&P Retail (NYSEARCA:XRT) was up 0.27% premarket on Monday. Walmart (WMT) tracked 0.20% higher and Costco (COST) traded flat. Amazon (AMZN) was up 1.15% and Shopify (SHOP) rallied 3.88%. Etsy (ETSY) rose 1.25% and Wayfair (W) gained 0.48%.