Citi Analyst Comments on Black Friday Sales; Strongest at ARO, GPS, PSUN, and URBN - Weakest at LTD and AEO

December 1, 2008 8:24 AM EST

Citi analyst comments on Black Friday sales: Retailers provided consumers with a reason to get out of bed by offering compelling doorbusters and low prices on hot gifts for Holiday. However, aggressive promotions couldn’t keep customers in the stores for long and shoppers soon headed home to bed and pulled the covers back over their heads. Black Friday left many retailers stuck with heavy inventories and facing what is sure to be a difficult Holiday season, while retailers with a strong value message took share by focusing on what consumers care about most – price.

Citi analyst also said, "We expect particularly weak Nov. sales given the later Thanksgiving (occurs in week 4 vs. week 3 Last Year) which could result in ~(3)-(4)% or worse comp headwind. We project our CIR Softlines Index to decline -14% in Nov. vs. -8.5% in Oct and -5.1% in Sept....Black Friday’s +17% Traffic Robust. We believe Black Friday traffic was robust but likely offset by lower conversion & average transaction values due to ongoing economic fears. Shoppers likely focused on more practical & less expensive items. According to NRF, BF Weekend traffic increased +17% vs. LY (172mm TY vs 147mm LY) & ShopperTrak reported +3.0% BF sales increase, smallest gain since ‘05’s -0.9%. Biggest channel share gains this yr at trad. dept stores (+4%) & online (+2%) while top sellers incl. clothing/accessories, media (books-CDs-DVDsvideo games), & cons. electronics."

(Stocks of Note Aeropostale (NYSE: ARO), Gap (NYSE: GPS), Pacific SunWear (Nasdaq: PSUN), Urban Outfitters (Nasdaq: URBN), Limited (NYSE: LTD) and American Eagle Outfitters (NYSE: AEO).

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