The holiday shopping season got off to a good start this weekend, as online Black Friday sales beat expectations and started to build some much-needed momentum for the retail sector. According to Adobe’s online sales tracker, consumers paid a record $9.12 billion for online purchases on Black Friday. This is a 2.3% increase over last year and well above expectations of a 1% increase. But that’s only one piece of the puzzle. In another preliminary report, Black Friday traffic in physical retail stores increased by around 3% compared to 2021, according to retail tracker Sensormatic, which attributed the increase to increased promotional activity and positive in-store experiences. As inflation weighed on consumers this year, more than 166 million people planned to shop from Thanksgiving Day through Cyber Monday, according to the National Retail Federation’s annual survey. That’s 8 million more than last year and the highest estimate since 2017. Final figures from the NRF are due out on Tuesday. KeyBanc cited Sensormatic’s data in a research note on Sunday – saying that if accurate, the numbers would be higher than what its analysts are seeing. In recent channel audits, KeyBanc found that traffic at brick-and-mortar retailers was “flat” year-over-year. Analysts point out that this year’s holiday shopping schedule is a day longer than in 2021. Many struggling retailers took advantage of this seemingly strong start to holiday shopping. Goldman Sachs said retailers like Target (TGT) and Bed Bath & Beyond (BBBY) attracted more consumers with deep discounts on products. In a separate note, Deutsche Bank noted “strong demand for beauty” at retailers including Ulta Beauty (ULTA), Kohl’s (KSS), Victoria’s Secret (VSCO) and Bath & Body Works (BBWI). Clothing retail traffic was also strong. Deutsche Bank analysts said American Eagle Outfitters (AEO) was a leader among teens. Gap’s Old Navy brand (GPS) as well as Abercrombie & Fitch (ANF) and its Hollister brand were also top performers. Conclusion While holiday shopping is underway, we continue to love discount retailers during these difficult times. We’re most bullish on Club holding TJX Companies (TJX), which operates TJ Maxx, HomeGoods and Marshalls. Major full-price retailers have been battling inventory gluts, which are a bumper crop of bargain merchandise that discounters like TJX, Ross Stores (ROST) and Burlington Stores (BURL) can turn for a good profit but also a good deal for customers. Many big-box retailers, meanwhile, are still working with excess inventory. They have over-ordered this year, expecting a repeat of the pandemic shopping spree in 2020 and 2021. But consumer spending has shifted from buying things to experiences like dining out and going on vacation, leaving many retailers with too much. The bad news for these stores was good for TJX, which outperformed the broader market this year. We expect stronger performance to come. (Jim Cramer’s Charitable Trust is long TJX. See here for a full stock list.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.Customers line up at the checkout counter of a Macy’s store during the Black Friday sales on November 25, 2022 in Jersey City, New Jersey.
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The holiday shopping season got off to a good start this weekend, as online Black Friday sales beat expectations and started to build some much-needed momentum for the retail sector.
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