Today - Friday, November 28, 2014
- Analysts with Guggenheim Partners try to put a number on the benefit to consumer spending of sustained lower gas prices
- The investment firm thinks $6B will be freed up for consumers in December and a total of $20B-$25B for the November to February period.
- Guggenheim identifies Rite Aid (NYSE:RAD) and Five Below (NASDAQ:FIVE) as two companies which could see momentum pick up beyond expectations due to the spending lift.
- Some huge retail names such as General Motors (NYSE:GM), Wal-Mart (NYSE:WMT), and Target (NYSE:TGT) had a banner day to end the week on enthusiasm over consumer spending trends.
- More on the retail sector's big day: 1) Black Friday read: Demand strong for beauty supplies and toys, 2) Amazon, eBay higher following Thanksgiving sales data, 3) Wal-Mart prints all-time high, 4) Retail ETFs catch a break.
- Related ETFs: XLY, XRT, VCR, RTH, RETL, IYK, FXD, FDIS, PMR, UGE, RCD, SZK.
3:01 PM| Comment!
- Reuters reports Procter & Gamble (NYSE:PG) is working with Goldman to explore a sale of its Wella hair care unit, and that a deal could fetch ~$7B.
- P&G, which has already been busy streamlining its consumer product lineup, is said to be "exploring all options for the unit," including the sale of just a portion of it. The company bought Wella for $7B in 2003.
- PG +1% AH.
12:59 PM| Comment!
- IBM estimates U.S. Thanksgiving online sales rose 14% Y/Y, aided by a 29.8% increase in sales from department store sites. Mobile respectively accounted for 32.3% and 52.1% of sales and site traffic, up from 25.8% and 42.6% a year ago. Average order value fell by $7 to $125.
- ChannelAdvisor (ECOM -0.9%) reports its clients' Thanksgiving same-store sales rose 20.1%. Their Amazon (AMZN +1.7%) same-store sales rose 25.9%, but their eBay (EBAY +0.8%) sales fell 3%. Notably, all other marketplaces collectively saw 110% growth - retailers such as Best Buy and Sears have been adding marketplaces to complement their direct sales.
- For reference, ChannelAdvisor reported 32.4% and 4.4% Amazon and eBay October same-store growth, respectively. eBay has been losing marketplace share to Amazon for some time, and was hit this summer by Google algorithm changes and a security breach.
- Early reports for Black Friday sales have generally been positive.
- J.C. Penney (JCP +3.7%) says a strong start to the Black Friday shopping weekend leaves it "well-positioned" to compete for the duration of the holiday period.
- The company struck more sales than a year ago with its 5:00 p.m. opening time on Thanksgiving an obvious significant factor.
- Hot categories included kitchen electrics, towels, fine jewelry, sleepwear, and Disney toys and apparel (a common theme across retail).
- Some independent channel checks are less rosy, citing JCP as having only moderate traffic compared to some peers.
- Best Buy's (BBY +1.8%) website is back up and running.
- In a statement to the media, Best Buy said a spike in mobile traffic caused its ill-timed outage earlier today.
- The company has been touting its price-match guarantee this holiday season which is believed to be creating large interest with shoppers.
- Macy's (M +2.5%) CEO Terry Lundgren says an estimated 15K shoppers visited the company's store in Manhattan's Herald Square yesterday.
- The department store chain opened up stores across the U.S. at 6:00 p.m. on Thanksgiving.
- The early read on Black Friday traffic from Macy's is that it's seeing a year-over-year increase.
- Lundgren also said in interviews that handbags and watches have sold well - particularly items made by Michael Kors.
- Macy's is one of a boatload of retail stocks that have set an all-time high today.
- Automobile stocks are higher as a group after oil prices slide.
- General Motors (NYSE:GM) is up 2.3% and Toyota is 1.1% higher, while shares of Ford (NYSE:F) are just poking out a modest 0.1% gain.
- There's some concerns that Ford's big bet on aluminum loses some of its relevance if gas prices shoot lower.
- Daimler (OTCPK:DDAIF) and BMW (OTCPK:BAMXY) are both beating broad market averages with +1% gains.
- EV automaker Tesla Motors (NASDAQ:TSLA) is down 2.1% on the day.
- The teaser trailer for Star Wars: The Force Awakens is being played at movie theaters across the U.S. this weekend for the first time.
- The Lucasfilm movie is slated to premiere on December 18, 2015 with a return of original stars Harrison Ford, Carrie Fisher, and Mark Hamill.
- Most analysts expect Disney (NYSE:DIS) to generate close to $1.2B-$1.3B in global box office receipts and +$700M in profit. The tally moves higher if consumer products, video games, and streaming rights are all fully factored in.
- There's a vibrant debate on SA between Disney investors on how much of the Star Wars payoff is already baked into Disney trading at +$90 per share.
- Star Wars YouTube channel
- Shares of Wal-Mart (NYSE:WMT) cleared $88 for the first time before easing back a bit.
- Earlier today, the retailer gushed about the awesomeness of its level of Thanksgiving Day sales, although some channel checks by analysts indicate store traffic was light compared to a year ago.
- Online sales appear to be where Wal-Mart is shining.
- The Bentonville giant may be out-performing other retail chains on the day with its far-flung network of stores making the drop in oil prices a bit more significant.
- Previously: Online sales sizzle for Wal-Mart on Thanksgiving
- There's a positive vibe across retail as early reports from major chains indicate strong e-commerce sales and an easing off of the promotional fervor that has wrecked profit margins in the sector.
- Though there's some vibrant debate on the degree of impact of lower oil prices on consumer spending, nearly all retail analysts see some trickle-down benefit for Q4.
- The catch-all S&P Retail ETF (NYSEARCA:XRT) is up 1.7% on the day.
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, FXG, RETL, PBJ, IYK, PEJ, FXD, IYC, FDIS, RHS, SCC, FSTA, UCC, PMR, PSL, UGE, RCD, PEZ, PSCC, PSCD, SZK.
- Best Buy's (BBY +1.8%) website is down at the moment.
- A message on the retailer's home page to Black Friday consumers: "Check back soon."
- Shares of BBY have trimmed off some of their early gains, but could feel a sharper sting if the outage minutes stretch into hours.
- Global airline carriers rip gains after OPEC decides to hold production levels steady to spark another drop in crude oil prices.
- As a group, airliners are poised to have their biggest up day of the year.
- Gainers: China Eastern Airlines (CEA +5.8%), Delta Air Lines (DAL +5.3%), China Southern Airlines (ZNH +5.5%), Air China (OTCPK:AIRYY +6%), Cathay Pacific (OTCPK:CPCAY) +6.7%, Air-France KLM (OTCQX:AFLYY) +8.5%, Deutsche Lufthansa (OTCQX:DLAKY) +5.9%, Singapore Airlines (OTCPK:SINGY) +4.8%, Gol Linhas (GOL +5.9%), Copa Holdings (CPA +3.2%), LATAM Airlines Group (LFL +3.2%), Air Canada (OTC:AIDFF) +8.9%
- The hacking incident at Sony Pictures (NYSE:SNE) appears to be serious with computer servers still offline and concerns growing that key corporate information was part of the breach.
- The company has been quiet about the nature of the hack and over the growing speculation that private information on movie stars is in the hands of the hackers.
- Workers at Sony Pictures have reported that pen and paper are being used at offices instead of computers.
- Target (NYSE:TGT) reports online sales increased 40% on Thanksgiving from a year ago, led by strong growth in the mobile category.
- Yesterday's tally marked the company's biggest online sales day ever.
- The retailer's free shipping offer for items ordered off its website is a significant difference for consumers from last year.
- Target stores opened at 6:00 p.m. last night and drew lines in the thousands at some locations due in part to a $575K Christmas cracker giftcard promotion.