U.S. retailers are poised to report November sales above forecasts, helped by an increase in shopper visits over the Black Friday weekend, promotions that were spread throughout the month and more consumers shopping for themselves.
Retailers hope to continue that momentum on Cyber Monday, a term referring to the day many people make online gift purchases after the long Thanksgiving weekend. Online sales got off to a strong start on Black Friday, rising 9 percent from last year, according to comScore.
In morning trading, Amazon.com Inc shares hit an all time high of $181.84 before paring those gains.
But most retail stocks had a muted reaction as shares were bid up heading into the Black Friday weekend, which unofficially kicks off the holiday shopping season, amid signs that consumers were more willing to spend.
"A lot of the enthusiasm is a bit misplaced," said Walter Stackow, an analyst with Manning & Napier. "We still have a consumer who is heavily indebted," he added, noting that unemployment was still high.
The industry group National Retail Federation said on Sunday that shopper traffic was up 8.7 percent between Thanksgiving Day on Thursday and Sunday, compared with the same period in 2009, and spending per person rose to $365.34 from $343.31 a year earlier, the NRF said.
The NRF data contrasts with that of Shoppertrak, which said that traffic to stores on Friday rose 2.2 percent from a year ago and sales rose by a mere 0.3 percent, which shows that where shoppers made purchases, it was often on discounted items.
That difference could reflect the fact that more people shopped on Thanksgiving and online, diluting the Black Friday rush to stores, analysts said.
The strong weekend follows month after month of sales gains at top U.S. retailers, as the economy has stabilized and shoppers have paid down some of their credit card debt, and retailers' shares have rallied in recent months as a result.
Last Wednesday, the S&P Retail Index hit its highest level in more than three years, rising 30 percent since a yearly low in early July, but analysts said they may not have much room to rise.
"It might be tough for the 'Santa Claus Rally' to continue into December," JP Morgan analyst Charles Grom wrote in a note to clients.
STILL EARLY IN HOLIDAY SEASON
While Black Friday weekend attracts a lot of public attention, analysts also noted that it does not necessarily make a great predictor for the entire holiday season.
"We're focusing on what we think are going to be market share gainers, whether you are talking about the holiday or beyond that," said Edward Jones analyst Matt Arnold. He named Target, Kohl's and Tiffany & Co as companies set to gain customers.
The S&P Retail Index was down 1.3 percent, echoing the broader market's 1.1 percent fall.
Shares of Macy's were down 1.8 percent, while Kohl's were down 2.3 percent and J.C. Penney Co. Inc.'s were down 1.4 percent. Wal-Mart Stores Inc. shares were down 0.4 percent and Aeropostale's slipped 0.5 percent. Target shares were off 1.5 percent
A fuller picture of how much shoppers spent over Black Friday weekend will come on Thursday when 28 leading retailers, from department store operators Macy's and Penney Co. to discounter Target Corp. and teen retailer Aeropostale, report November sales.
Wall Street analysts on average are expecting retailers to report a same-store sales jump of 3.5 percent for November, with department stores and teen apparel chains leading the way. Last November, same-store sales were up 0.5 percent.
U.S. shoppers spent 6.4 percent more on average this Black Friday weekend than last year and hit department stores and clothing shops, rather than focusing on discounters as they had done in recent years.
JP Morgan's Grom forecast that most retailers will likely "beat Street estimates by a wide margin."
"The consumer continued to show resilience as November started strong and Black Friday did not disappoint," Grom wrote.
Several executives including the chief executives of Penney and Macy's, as well as industry analysts, noted that shoppers are spending more on themselves as their finances improve. JP Morgan's Grom said shoppers "were also treating themselves to a bit more than in the past."
A colder Thanksgiving weekend in large parts of the country also boosted sales, after a warm October prompted shoppers to delay buying items such as sweaters.
Customer Growth Partner President Craig Johnson called Black Friday weekend "the strongest we've seen since 2007" but said that one solid weekend did not guarantee a blockbuster holiday season.
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