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The holiday shopping season got off to a strong start over the weekend as Black Friday online sales beat expectations and began to provide much-needed momentum for the retail sector. According to Adobe’s online sales tracker, consumers shelled out a record $9.12 billion of online purchases on Black Friday. That’s 2.3% more than last year and well above expectations for a 1% increase. But that’s just one piece of the puzzle. In another preliminary report, Black Friday traffic at brick-and-mortar retailers rose about 3% during 2021, according to retail tracker Sensormatic, which attributed the increase to increased promotional activity and “favorable in-store experiences.” While inflation has put pressure on consumers this year, more than 166 million people planned to shop from Thanksgiving 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. The final numbers from NRF will be released on Tuesday. KeyBanc cited the Sensormatic data in a research note on Sunday and said the numbers would be higher than what its analysts see, if accurate. In recent channel checks, KeyBanc finds that traffic at brick-and-mortar retailers has declined year-over-year. Analysts note that this year’s holiday shopping calendar is one day longer than it was in 2021. Many struggling retailers benefited from this seemingly strong start to holiday shopping. Goldman Sachs said that retailers such as Target (TGT) and Bed Bath & Beyond (BBBY) attracted more consumers through deep discounts on products. On a separate note, Deutsche Bank noted “strong demand for beauty” at retailers such as Ulta Beauty (ULTA), Kohl’s (KSS), Victoria’s Secret (VSCO) and Bath & Body Works (BBWI). Apparel retail traffic was also strong. Deutsche Bank analysts said American Eagle Outfitters (AEO) was a leader among teens. Other featured artists included Gap’s Old Navy (GPS) brand, as well as Abercrombie & Fitch (ANF) and its Hollister brand. Bottom Line With holiday shopping underway, we still like discount retailers in these tough times. We are more bullish on Club holding TJX Companies (TJX), which operates TJ Maxx, HomeGoods and Marshalls. Major full-price retailers have been dealing with excess inventory, which serves as a bumper crop of cheap merchandise that discounters like TJX, Ross Stores (ROST), and Burlington Stores (BURL) can sell for a handsome profit but also a good bargain. customers. Many of the big retailers, meanwhile, are still dealing with excess inventory as well. They over-ordered this year, expecting a repeat of the pandemic shopping spree in 2020 and 2021. But consumer spending shifted from buying things to experiences like eating out and going on vacation, leaving many retailers with too much stuff. Bad news for those stores has been good news for TJX, which has outperformed the broader market this year. We see stronger performance ahead. (The Jim Cramer Charitable Trust is long TJX. See here for a full list of shares.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will 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 foundation’s portfolio. If Jim has 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, TOGETHER WITH OUR WAIVER. NO LIABILITY OR FIDUCIARY DUTY SHALL EXIST OR BE CREATED BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR BENEFIT IS GUARANTEED.
Customers line up at the checkout area of a Macy’s store during Black Friday sales on November 25, 2022 in Jersey City, New Jersey.
Kena Betancur | fake images
The holiday shopping season got off to a strong start over the weekend as Black Friday online sales beat expectations and began to provide much-needed momentum for the retail sector.
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