Morgan Stanley Highlights Winners And Losers From Holiday Shopping Weekend

Specialty retail and departmental stores witnessed mixed Black Friday weekend sales versus 2015, with e-commerce remaining “the clear winner” and in-store revenue continuing to be under pressure, Morgan Stanley’s Kimberly C. Greenberger said in a report.

In-Store Mixed, E-Commerce Winner

Black Friday store checks and ShopperTrak data indicates only a 1 percent decline in in-store traffic on Thursday and Friday versus mid-single-digit declines “reported industry wide over the past few years, an impressive result,” Greenberger noted. She added, however, higher promotions exerted pressure on overall in-store revenue.

According to ComScore, e-commerce sales rose 17 percent on Thursday and 19 percent on Friday, versus 9 percent and 10 percent in 2015.

Deeper Discounts

“Most of the specialty retailers we cover offered in-line Black Friday promotions in terms of breadth (percent of assortment on promotion), but discount depths were deeper for many,” Greenberger wrote.

Urban Outfitters, Inc. URBN was the only retailer recording a significant rise in promotions. Anthropologie offered a 30 percent discount on everything, versus 25 percent last year.

Anthropologie, Gap Inc GPS's Banana Republic, Coach Inc COH, Michael Kors Holdings Ltd KORS and Abercrombie & Fitch Co.ANF offered higher discounts than last year. The week leading up to Black Friday also saw Gap, Banana Republic and American Eagle Outfitters AEO offering higher promotions year-over-year.

Weekend Winners

L Brands Inc LB, Lululemon Athletica inc. LULU and Hollister were the weekend winners, the analyst noted.

Victoria's Secret, PINK, Lululemon and Hollister witnessed “consistently strong traffic throughout the day,” although this was driven by higher promotions. Although PINK was less promotional than Victoria's Secret on a year-over-year basis, the former still registered significant traffic increases.

“LULU was a standout, although we observed a meaningful uptick in clearance breadth, particularly women’s tops,” Greenberger mentioned.

Weekend Laggards

Gap, Banana Republic, Michael Kors and Anthropologie were the weekend laggards. “Despite offering a similar promo at Gap and deeper promo at Banana Republic (50 percent off 5 full-price items vs. 50 percent off sweaters and 40 percent off the rest of your purchase LY), traffic fell y/y for both brands,” the analyst noted.

Ratings

Greenberger has the following ratings:

• Abercrombie & Fitch: Underweight.
• American Eagle Outfitters: Underweight.
• Coach: Underweight.
• Gap Inc: Underweight.
• L Brands Inc: Overweight.
• Lululemon: Equal Weight.
• Michael Kors: Equal Weight.
• Urban Outfitters: Equal Weight.