Close

Stocks Higher as Big Boys Give Up the Goods on Black Friday Sales (WMT) (TGT)

November 29, 2013 11:19 AM EST
Get Alerts WMT Hot Sheet
Price: $60.17 -0.91%

Rating Summary:
    38 Buy, 12 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
Join SI Premium – FREE
Stocks are higher across the board Friday as early Black Friday sales results point to a strong start to the 2013 holiday season. At 11AM, the Dow is up 53 points to 16,150, the Nasdaq is up 18 to 4,064 and the S&P is up 5 to 1,812.

The nation's two largest retailers, Wal-Mart (NYSE: WMT) and Target (NYSE: TGT), issued press releases this morning providing a glowing assessments of their Black Friday events - which started as early at 6PM on Thanksgiving.

In its release this morning, Wal-Mart said it had "more than" 10 million transactions at its registers between 6:00 and 10:00 pm last night. This compares with last year's release in which the company said it did "nearly"10 million transactions between 8:00 pm and midnight, analyst Patrick McKeever at MKM Partners notes. While the number was slightly higher this year, the time period was two-hour-earlier. Still this year looks better than last year, the analyst said. "On a net basis, assuming sales have been pulled forward two hours, and assuming average ticket is similar, it would seem safe to say Black Friday sales are up slightly this year vs. our flat Walmart U.S. same-store sales estimate for all of 4Q13 and guidance of the same," according to McKeever.

For Target, today's press release from the company on Black Friday sales was a first, at least in recent memory. McKeever views the release as a positive sign overall. While Target didn't give specific numbers, management does note that traffic and sales on Thanksgiving Day were among the highest the company has seen in a single day, and that’s a significant statement since stores were only open for four hours on Thanksgiving. The company also reported strong sales across channels and says that target.com saw 2x more orders in the early-morning hours yesterday as the doorbusters first became available. "Target is much more focused on getting its price message across this year, a little less focused on the creative merchandising, and we think the shift in message is resonating with consumers," the analyst said. "We're modeling flat comps for Target in 4Q13 as well, also consistent with guidance, but have more of an upside bias than we do with our Walmart estimate."

On Kohl's (NYSE: KSS), the analyst said their checks were mixed. "... one store we visited had much shorter lines outside the store pre-opening than last year, and we got right in at 8:05 pm vs. it taking some time to even get into the same store LY when it first opened at 10:00 pm. But another we checked later in the evening was the busiest we’ve ever seen on any Black Friday over the years we've been covering Kohl’s, with lines snaking around the entire store, good-sized baskets, etc." The firm believes while Kohl's had a slow start at 8:00 pm, it saw a nice pickup toward the later hours.

Commenting on the loser from all the early Thanksgiving openings, McKeever points to Fred's, Inc. (NASDAQ: FRED). Fred's is open on Thanksgiving every year, and will likely be hurt by Walmart moving its Black Friday sales events up to 6:00 pm on Thanksgiving evening. The firm is also cautious on the stock given its strong run-up despite still-soft fundamental trends.

While the early commentary from the big retailers was encouraging, "these early reports do not mean it’s going to be a great holiday season," McKeever cautions. "What we've been seeing more and more in recent years is an initial burst of holiday spending around Black Friday, followed by a pronounced lull, then a dramatic pickup toward the end," he said. "We would expect to see that again this year. It is also clear more and more holiday sales are migrating online, which hurts bricks and mortar retail sales."


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments, Insiders' Blog, Market Check, Retail Sales

Related Entities

Standard & Poor's