Black Friday Weekend Wrap Up: What Wall Street's Saying

NEW YORK (TheStreet) - Black Friday weekend has historically been a leading indicator for how much or little consumers plan to spend during the holiday shopping season. But with retailers extending deals even beyond the five-day stretch between Thanksgiving and Cyber Monday, consumers have been less inclined to shop over the past weekend. Early forecasts predicted that Thanksgiving weekend spending actually fell this year by 11% to $50.9 billion, according to the National Retail Federation. The NRF survey estimates that the average consumer will spend $380.95, down 6.4% from last year. "A strengthening economy that changes consumers' reliance on deep discounts, a highly competitive environment, early promotions and the ability to shop 24/7 online all contributed to the shift witnessed this weekend," said NRF President and CEO Matthew Shay. Must Read: Retail Stocks Slide as Black Friday Sales Sputter, Oil Falls to 5-Year Low Analysts seem to have varying initial conclusions about consumer spending over the weekend, though some were upbeat like Stifel's David Schick. Here's what he said: Take advantage of what we see as a false narrative today as conditions are still conducive to better retail performance (consumers improved, strategies improved, market conditions improved with lower rates y/y). We have no retail sources or work that suggests the NRF implications is near the situation. We continue to see Best Buy (Buy) and Target (Buy) as holiday winners in big-box and other compelling retail situations. Lots of speculative headlines happen this time of year, but we know that a broader spectrum of consumers are in better shape (on a y/y basis) than the last few years, and retailers are more realistic and prepared for the e-commerce threat. Must Read: Black Friday Scorecard: Best Buy Gets an 'A-' With More, Better Staff Other analysts were not as upbeat about the weekend. Here's what they said. Anna Andreeva, Oppenheimer With earlier store openings (more stores opening on Thanksgiving), promotions starting earlier in the week and mix shift toward online, the holiday shopping period is being stretched out. We also think Black Friday reads are becoming less relevant for holiday ahead--case in point, last year's inline Black Friday weekend still led to one of the worst holiday seasons for apparel. According to our checks in NYC/Virginia, traffic appeared strongest during first wave 8 PM on, followed by a lull Friday morning and pickup throughout the day. With lack of newness in apparel, accessories/intimates likely again took share (best traffic at [Michael Kors ], [L Brands ] Victoria's Secret and BBW); we think department stores outperformed specialty (Macy's , Nordstrom JWN). Of the 16 concepts we track, 33% were more promotional y/y, 14% less, and 52% in line with last year. While structural issues persist in apparel, macro is improving for consumer, while compares ease into '15. Camilo Lyon, Canaccord Genuity Oddly and eerily enough, our trip to the mall on Black Friday was too normal, too civilized, too easy. We found parking in less than 30 seconds where in past years it has easily taken us more than 30 minutes. The rush of people trampling one another for that next best deal was not to be found. We suspect the combination of pre-Thanksgiving discounts that began over a week ago, increased ubiquity of deals online, and the general feeling that sales and discounts would persist right up until Christmas curbed the anxious need to hit the malls. We also suspect consumer electronics took a large part of consumers' holiday shopping budgets. That Best Buy's website went down due to traffic overload speaks directly to that point. It also speaks to the concerns we raised in a note published on November 17 entitled "iPhone 6: The Grinch who might steal Christmas" which details the potential drain the new iPhone 6 could have on consumer spending. According to the National Retail Federation, holiday weekend sales fell 11% while traffic declined 5.2% year/year. Not surprisingly, this augurs for another highly promotional holiday season. We therefore continue to favor companies that have a brand or product with a discernable point of differentiation. In our coverage, this includes BUY-rated Deckers Outdoor , Under Armour , and KORS. Paul Lejuez, Wells Fargo Securities Although there is a bunch of noise around how retailers performed Black Friday (11/28) weekend, we believe it is really difficult to tell and isn't really the leading indicator for holiday that many try to make it out to be. We honestly can't say that it is clear whether you want to see strong sales or weak sales over the weekend (we could argue either way). Taking a step back, not enough retailers have seen healthy sales increases in recent quarters in our view, as promotions often eat away at gross profit dollars. We believe this holiday season is at risk for much of the same, as inventories are not in great shape, and deep discounts are not enough of a call to action to drive customers to the store. Few retailers have been able to consistently drive higher gross profit dollars/sq ft (including Burlington Stores , JWN, LB and Tiffany ), and in our view are best-positioned for holiday. Must Read: Black Friday Scorecard: Macy's Gets a 'B+' With Apparel, Watch Sales Paul Trussell, Deutsche Bank We believe Black Friday weekend was a moderate disappointment for retailers overall, as traffic, while strong at store openings ~6PM on Thanksgiving, soon waned. Online was a bright spot, but also siphoned in-store activity. Heavily discounted deals, especially in electronics, drove traffic, but lower basket sizes (according to the NRF) likely mitigated overall sales growth. Moreover, we are cautious on retailers' margins as we think promotional activity was modestly elevated vs. LY, and we suspect stores overhired in terms of seasonal employees. In our view, Kohl's came out on top with what we think were better traffic trends YOY, luring shoppers with compelling deals on electronics despite limited SKU count. Moreover, we believe KSS will benefit in 4Q from successfully signing up thousands of customers to its new loyalty program and we have adjusted our SSS estimate by 50 bps to 2.1%. Surprisingly, Family Dollar Stores was also a winner with heavy promotions in toys as its BOGO Free toy sale compared to BOGO 70% Off last year. Athletic footwear remained a strong category with the Jordan 6 Retro Infrared sold out at both Foot Locker and Finish Line at $185. J.C. Penney's traffic trends were OK but fell short of our expectations. 40%-60% off doorbusters were ample, and we observed the deepest discounts in fashion jewelry. We saw weak in-store traffic YOY at TGT on Thanksgiving night, though management did highlight that online sales grew 40%. We think the company missed the mark by holding surprise TV deals at the door, and we observed many units still remaining later in the evening on Thursday. At Big Lots , we saw a good performance for fireplaces, sofa sets, and tablets, but also limited traffic. Must Read: Black Friday Scorecard: J.C. Penney Gets a 'B+' With Strong Apparel, Home Goods Sales -Written by Laurie Kulikowski in New York. 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