Oh the Weather Outside Is...
By now it’s apparent that November sales were largely disappointing across the board. It’s also probably time to adjust expectations, not for the actual pace of sales or how the holiday season will ultimately play out, but for how volatile this critical selling season is going to be. The consumer responded well to Black Friday and planned promotions. Almost all retailers who participated in the weekend hype reported strong traffic. But, in the wake of generally positive Black Friday reports, one key aspect was overlooked. What about the rest of the month?
With all the weather excuses and rationalizations put out there this morning it’s easy to become overly skeptical on the remainder of the holiday season. Whether you buy into these excuses or not, the warm weather was clearly a callout but should not have been such a surprise. Almost every company exposed to seasonal apparel indicated that October was boosted by the early chill and this morning my thermometer in the car read 68 degrees! This is sales volatility at its best. I’m not willing to write off the holiday just yet. The early pull on seasonal demand, the still tight inventories, benign promotions (so far) and the calendar set-up (one extra selling day before Christmas this year) all suggest a better December. Yes this puts more pressure on this month, but I suspect this was already expected and planned for by most retailers.
Upside to expectations: LTD, ROST, KSS, JWN, PIR
In-line: COST, ZUMZ, ARO, AEO, TJX, GPS
Downside to expectations: TGT, FRED, BJ, FDO, SSI, SKS, JCP, M, DDS, BONT, WTSLA, PLCE, HOTT, BKE, ANF, CATO
- Eric Levine