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Via FactSet StreetAccount

The holiday shopping season officially began over the Thanksgiving Weekend, generating plenty of discussion about traffic and sales trends. However, the significance of the weekend has once again been questioned by some analysts who suggested this year's early promotion ahead of the weekend likely diminished both the impact and the importance of the weekend's sales.

Takeaways generally described the weekend as somewhat disappointing overall. Estimates for overall sales for Thursday and Friday combined in the range of down 1.5% on flat customer traffic, while average spending per shopper was estimated to have decreased 1.4%. The main theme seemed to be the continued shift in consumer activity to online from in-store shopping, perhaps further exasperated this year by Amazon's week long lead-in to Black Friday deals (which started on November 20).

Several firms noted relative strong performance was experienced at Target and surprisingly, from some teen retailers including American Eagle Outfitters, Abercrombie and Fitch, and L Brands (Victoria's Secret, Bath & Body Works), though against muted expectations. It was also suggested by some surveyed that weakness experienced over the weekend was primarily fashion and promotion driven rather than a reflection of tepid consumer demand, with a number of analysts confident in names that are often associated with a compelling value proposition, including Target, J.C. Penney, Kohl's, and TJ Maxx.

Analyst Reaction From the Street

Oliver Chen, Cowen and Company

  • Estimates online traffic was +>20% and store traffic was down 2-4%
  • Believes the popularity of earlier promos likely drove actual Black Friday sales down modestly
  • Suggests promos starting earlier in the week appear to be the key change for Black Friday this year vs. last year, as most of the early deals were online as retailers try to gain customer mindshare earlier vs. peers and compete with Amazon.

Paul Trussell, Deutsche Bank 

  • Believes Black Friday weekend was soft overall as shoppers stuck to their lists (smaller baskets year-over-year), partly offset by further migration of traffic to online and before the weekend
  • Suggests Target came out on top with very long lines seen at its Thanksgiving opening and sustained traffic levels well into the night and the weekend 
  • Believes J.C. Penney also performed well and gained market share this year, driven by its earlier Thanksgiving opening time and robust soft home goods sales

Randal J. Konik, Jefferies & Company

  • Notes traffic trends that appeared healthy, with strong traffic in the teen space the biggest upside surprise
  • Suggests the solid demand seen throughout the weekend reinforces the firm's view that the consumer is healthy and most retailers still have the opportunity for a decent holiday season, up against low expectations
  • Feels American Eagle Outfitters was a standout, with strong traffic and conversion in response to the 40% off store-wide offer 
  • Saw healthy traffic levels at both Abercrombie and Fitch and Hollister as well, with notable year-over-year increases
  • Notes Urban Outfitters and Zumiez were both quiet and seeming to lose some Black Friday wallet share

Roxanne Meyer, MKM Partners

  • Notes last year a handful of retailers reduced promotional levels on Saturday/Sunday from Black Friday; this year many more kept them running over the weekend or kept them elevated overall vs. last year
  • Notes preliminary industry data for the Black Friday shopping weekend reveals that traffic continues to move online and that total sales are likely tracking below plan to-date
  • Believes traffic winners included L Brands (across brands) and Express while weaker traffic was seen from Gap and Chico's

Richard E. Jaffe, Stifel, Nicolaus, & Company

  • Believes 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
  • Remains 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 
  • Believes Holiday apparel sales will increase about 2% vs last year

Pamela Quintiliano, SunTrust Robinson Humphrey

  • According to the firm's channel checks on Thanksgiving and into early morning of Black Friday, traffic and conversion were well-below last year levels
  • Although the depth of promotions took a step-down throughout the weekend, feels traffic and conversion remained consistently above-average among the following: Old Navy, Justice, Abercrombie and Hollister, and Francesca's
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