2023-12-01 16:49:40
by Deborah Mary Sophia and Aishwarya Venugopal
Retailers like Amazon.com and Foot Locker are optimistic regarding holiday sales following posting higher-than-expected numbers on Black Friday and Cyber Monday as deep discounts attracted shoppers on a budget on the biggest shopping days in the United States.
Early estimates for holiday shopping were encouraging for some investors, following retailers exercised caution heading into the season. U.S. online sales during the five-day period from Thanksgiving to Cyber Monday hit a record $38 billion, according to Adobe Analytics, while the National Retail Federation said more than 200 million people shopped in-store and online over the holiday weekend, beating estimates.
“While some aspects of consumption are significantly slower and lower, from a spending perspective there is still a lot of money sitting on the sidelines…(The holiday season) might actually be a little better than most people think,” said Jimmy Lee, chief executive of Wealth Consulting Group, which owns shares of Amazon.
Earlier this week, Ulta Beauty ULTA.O and Foot Locker FL.N raised their annual sales forecasts, with the shoe retailer announcing a strong start to holiday sales thanks to significant discounts .
Footfall to leisure and sporting goods stores during Black Friday increased by 322.9% compared to the daily average since the start of 2023, while the category saw an increase of 305.2 % the previous year, according to Placer.ai traffic data.
“We know we’re buying wallet share with value-conscious consumers this holiday season. Quarter-to-date, we’ve been pleased with the trends as consumers respond to our full-price assortments for holidays, in addition to our exciting offers,” said Mary Dillon, CEO of Foot Locker, during a conference call Wednesday.
Amazon’s Black Friday and Cyber Monday extension – which began on November 17 and continued through November 27 – was the largest ever compared to the same Cyber Monday weekend in years previous ones.
This year, in the week ending November 25, card spending increased 1.7% compared to the week ending the day following Black Friday last year, according to a report from BofA Global research . Corresponding increases in spending on party supplies were also larger this year, according to the report.
Deep discounts have been a key feature of this year’s Christmas shopping season and Christmas discounts might be even deeper in December, according to some retail executives.
Kohl’s KSS.N Chief Executive Officer Tom Kingsbury said last week that the company was “preparing to launch some very aggressive holiday promotions.”
Most retailers, including Walmart WMT.N and clothing chains Abercrombie & Fitch ANF.N and American Eagle Outfitters AEO.N , raised their annual forecasts, putting them on track for a strong quarter for the end-of-year holidays.
Since August 1, the consumer discretionary sector has seen the largest percentage increase in profits, according to LSEG IBES data.
Still, some retailers, including Kohl’s KSS.N , Best Buy BBY.N and Lowe’s Cos LOW.N , have tempered their sales forecasts for the year.
“The U.S. consumer is divided. Lower-income households are cutting back on discretionary purchases… But outside of the bottom line, we think household consumption remains resilient,” said Jason Benowitz, senior portfolio manager at CI Roosevelt.
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