Retail Numbers Soar for Black Friday

Joel Anderson |

They should call it "In-the-Black Friday." Initial numbers on the all-important first weekend of holiday shopping reached all-time highs, posting major year over year gains and sparking some hope that holiday spending might help to bolster an ailing economy. Stocks in major online and brick-and-mortar retailers were both on the rise as as the S&P Retail index was up close to 3.5 percent in early trading.

Brick-and-Mortar Retailers on the Rise

While a chorus of naysayers protested the early Black Friday openings, the free-market appears to have spoken the loudest, possibly indicating that the practice is here to stay. Holiday shoppers spent an estimated $11.4 billion on Black Friday and $52.4 billion for the weekend, both records, according to ShopperTrak, a tracker of retail and mall traffic. Foot traffic at brick-and-mortar retailers was also up 5.1 percent. The National Retail Federation (NRF) also cited a study from BIGresearch showing that a record 226 million shoppers hit the stores over the weekend, up 6.6 percent from last year's 212 million. What's more, the average shopper dropped $398.62 over the course of the weekend, up 9.3 percent over last year's $365.34. All this contributed to the retail rally in the markets as major stores saw gains in their share value. Best Buy (BBY) is up over 3.5 percent, Macy's (M) gained over 5.5 percent, and Saks (SKS) jumped over 6.5 percent amid gains across the sector.

Online Sales Post Major Gains

Without the benefit of Cyber Monday, online retailers were already pushing their sales to unprecedented levels over the weekend. ComScore, a Virginia based research firm, released numbers showing a 26 percent increase in online Black Friday spending to $816 million and an 18 percent increase on Thanksgiving Day spending to $479 million. All this has prompted speculation that a record Cyber Monday is in the works, with some analysts believing that last year's record of over $1 billion spent on the Monday following Thanksgiving could go down. All this helped buoy shares in major online retailers, with Amazon (AMZN) gaining close to 6.5 percent and eBay (EBAY) jumping almost 5.25 percent.

Sign of Things to Come?

Speculation over whether or not the strong Black Friday sales indicated a solid outlook for the holiday shopping season or early deal-hunting that was pulling out December sales was mixed. Several commentators remained skeptical that the record sales could continue into a strong holiday season on the whole. Ken Perkins, president of Retail Metrics, was optimistic about the potential for a strong holiday season, stating "A solid Black Friday suggests the rest of the season should be pretty good. Those who have jobs have been willing to spend.”

However, others were quick to remind investors that Black Friday isn't always a bellwether for the entire season. Seth Mason of SeekingAlpha.com asserted that this Black Friday was likely a repeat of 2008 when retailers offered big deals to attract business, enjoyed record sales on Black Friday in the midst of the financial crisis, then saw numbers recede throughout December, stating that "...like 2008, this year’s impressive Black Friday performance was a result of retailers 'pulling forward' demand by slashing prices at unprecedented levels, offering loss leaders, and spending gobs of money on marketing." Wendy Moe, a marketing professor at the University of Maryland, reiterated this, stating: "In the past, it was pretty standard that if you had a good Black Friday, you would have a good holiday season. But now, people are really planning for Black Friday, and it's not clear whether they're going to continue buying after that or if they're done."

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
WYN Wyndham Worldwide Corp Common Stock 72.32 -1.52 -2.06 929,503
EBAY eBay Inc. 28.42 1.03 3.76 14,437,530
AMZN Amazon.com Inc. 740.34 -3.31 -0.45 3,561,307
M Macys Inc. 42.48 0.06 0.14 3,662,473
BBY Best Buy Co. Inc. 45.67 0.22 0.48 3,815,484

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