Black Friday Standouts Include Kohl's Corp. (KSS) and Macy's, Says Stifel

Black Friday standouts in softlines retail include Kohl's Corp. (NYSE: KSS) and Macy's (NYSE: M), according to Stifel analyst Richard E. Jaffe. With everyday low prices, TJX Cos. (NYSE: TJX) and Ross Stores (NASDAQ: ROST) saw only light traffic, though the analyst continues to sees the two retailers as well positioned.

Other retailers/stocks mentioned in the report include American Eagle Outfitters (NYSE: AEO), Abercrombie & Fitch (NYSE: ANF), Bath and Bodyworks (NYSE: LB), and Children's Place (NASDAQ: PLCE).

Overall, Jaffe has a muted outlook for the holidays, especially given consumer spending shift away from apparel, and he expects a "post Black Friday lull."

"Black Friday has turned into Black November as retailers began promoting earlier in the month in attempt to pull forward holiday sales following a slow start to November, driven by unfavorable weather and a lack of apparel newness. We believe, for the most part, the consumer was able to resist these early promotions and instead waited until Thanksgiving to begin her holiday shopping," said Jaffe.

'Looking forward, we remain cautious regarding the Holiday season as external headwinds (weak mall traffic and financial market concerns) and a lack of apparel newness will likely hold back apparel sales despite an extra day of selling vs. LY (an expected 100-200 bps benefit to y/y sales growth) and continued online sales growth. Overall, we believe Holiday apparel sales will increase about 2%,” continued the analyst.

Jaffe added, "It appears that customers turned out in force yesterday and today to take advantage of what they perceive to be excellent values. However, limited newness and innovation in apparel assortments and a lack of acceptance of current fashion trends likely held back consumers’ spend on apparel. Instead, we believe the shift in consumer spending to jewelry, beauty (fragrance, cosmetics and lotions), home, electronics and experiences and away from apparel continued over Thanksgiving and Black Friday."

Discussing winners and losers, the analyst said, "Standouts today include: Kohl’s and Macy’s. Traffic was also heavy throughout the mall, especially American Eagle, Abercrombie, Hollister, Bath and Bodyworks and Pink. Aeropostale’s promotions did drive moderate traffic but the store was the most promotional out of the teen retailers with 60% off the entire store. Outside the mall, Kohl's drove traffic with a combination of attractive promotions (Kohl’s Cash) that were well advertised (especially in home and electronics). TJX and ROST, with their policy of everyday low prices, saw only light traffic. These businesses are well positioned and appear well inventoried. We believe that, as in years past, their time will come. Traffic was weak at kid’s clothing stores, including Children’s Place, as Thanksgiving and Black Friday shoppers appeared to be more focused on big-ticket merchandise and self-purchasing."

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