Black Friday: More Can Be Less

The news for Black Friday is that sales rose. Reports range from 3% to 7%, but is that really more? The consensus is that retailers heavily discounted prices.

Sales may have risen over the same time last year, but it’s difficult to imagine that profits rose in the process.

If discounts were greater than 3% to 7% on average and since there was no news of general pre-discount price increases over last year; and since sales include both the cost of goods sold and overhead as well as profits; reason would suggest the direction of profits was down, not up.

From that perspective, we imagine more is less this Black Friday.

Immediately relevant retail sensitive sector ETFs might be (XLY), (RXI), (XRT), (IYK), (VCR), (RTH), (ROB), (PMR), (PRFG), and (DPC).

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