Black Friday And Cyber Monday Ring Up 2 Retail Winners, 1 Loser
Investing.com | Dec 04, 2019 04:58
The holiday shopping season is off to a strong start so far. In the U.S., online sales from Cyber Monday hit a record $9.2 billion, up 16.9% from a year ago, according to . This followed the $11.6 billion in online sales from Thanksgiving and Black Friday.
In-store purchases did not disappoint either as nearly 157 million people came out during this four-day holiday weekend, each spending an average of $504.
However, not all retailers benefited equally from the holiday rush. Companies providing maximum convenience with multiplatform buying options reaped the greatest rewards, as use of “buy online, pickup in-store” features have grown 43.2% year-over-year from Nov. 1.
Below we highlight two stocks set to be among the winners, as well as one big loser from the record-breaking holiday shopping weekend.
Shares of Target (NYSE:TGT) have soared this year, as investors responded to ongoing efforts made by the big-box retailer to revamp its business, remodeling its website and brick-and-mortar locations, as well as adding in-store order pickups.
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Raymond James firm analyst Matthew McClintock noted the impressive physical traffic at Target this weekend, adding that the most competitive retailers have been "able to continuously meet and replenish consumer demand through superior logistical infrastructures."
Benefiting from these initiatives, the stock, which closed at $124.04 on Monday, has gained around 88% this year, giving the company a valuation of $62.8 billion.
With the corporation's lineup of private brands as well as an exclusive partnership with Disney (NYSE:DIS), which now operates stores inside 25 select Target locations across the U.S., the Minneapolis-based company looks primed for strong sales this season. Not surprisingly, Disney-related products, such as Frozen 2 merchandise, were one of the top sellers for Target over Black Friday and Cyber Monday.
Best Buy (NYSE:BBY) continues to be one of only a handful of old-school retailers still thriving in the face of Amazon (NASDAQ:AMZN), as it successfully shifted focus to enhancing customer services which has helped drive traffic.
The once-embattled electronics giant has been one of the top performers in its industry this year, with its stock jumping 48% in 2019. Shares, which recently hit a 52-week high of $83.63, closed at $78.11 yesterday with a market cap of roughly $20.6 billion.
More gains are likely to come for the multinational tech product provider, which operates in Canada and Mexico, as it looks set to continue enjoying the holiday shopping rush, with gaming merchandise and televisions forecast to be in high demand.
Best Buy’s convenient pickup capabilities as well as its delivery options position it to take the lead this season. Customers will be able to gather products in-store within an hour of placing the order online, while Best Buy also launched 175 alternate pickup locations in the New York City and Chicago areas where there may not be a store close by.
Offering even greater purchasing ease, the company announced that it will provide next-day delivery for thousands of products with no membership required nor a minimum purchase.
In sharp contrast to the strong annual performances seen in the outperformers above, Kohl’s (NYSE:KSS) stock has been stuck in a downward trend for the most part of 2019, losing around 30%, as it struggles to find new ways to draw in shoppers.
Shares closed at $45.94 last night, not far from their recent 52-week low of $43.33, giving it a market cap of $7.3 billion.
The struggling department store operator got off to a weak start with Black Friday sales in physical stores dropping 6.2% compared to last year, according to ShopperTrak data.
That's bad news for Kohl’s, which has attempted to ramp up online sales and in-store pickup options. Earlier this year it expanded a partnership with Amazon, providing their products in 200 Kohl’s stores and enabling virtual shoppers to return Amazon items at more than 1,150 locations across 48 states within the U.S. So far, however, this affiliation has failed to rescue the U.S. department store chain.
Kohl’s already slashed its profit outlook for the year on Nov. 19, as quarterly earnings and sales fell from last year and missed estimates. Sales generated virtually and by stores open at least 12 months also fell short of the expected growth of 0.8%, increasing only 0.4%.
Without doubt, the rise of e-commerce companies has hurt bricks-and-mortar retailers in recent years. Clearly, Kohl’s is no exception.
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