Yahoo Finance Live’s Brian Sozzi gives his take on total retailer web traffic during Black Friday.
video transcript
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Jared Brickle: Welcome back. For retailers, this Black Friday is a matter of life and death. Businesses are under intense pressure to make it happen this holiday season after some reported slowing sales. It’s no surprise that his take on Brian Sozzi today is focused on retail.
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Brian Sotzi: Yeah I think you’re starting to get to know me Of course, today Black will focus on Fridays and retail. We pulled out some cool charts from the team at Evercore ISI looking at his web traffic online. This is the overall web traffic currently tracked by Evercore ISI.
Now, as you can see, it’s below the level of last year. And an additional red flag, it’s not really accelerating. Coming into this Black Friday season, it’s not like there’s been an explosion of people going online searching for the deals we’ve been talking about. So it just isn’t — it’s not a good chart there.
But if you dig even deeper, like Evercore did, you’ll find that some companies, some of the major online retailers, haven’t really seen any significant acceleration either. Let’s take a look at Amazon’s site traffic. Of course, we are gearing up not only for Black Friday but also for Cyber Monday, so be aware that Amazon’s ticker is very hot on our platform this morning.
Even Amazon net can see that it is gaining a lot of momentum on Black Friday. I think this shows that consumers are still very cautious. That they’re going to wait for that absolute salivary deal. And if they don’t understand that, they’re just not buying this crap.
Best Buy is next. Another thing I’m going to flag here from this report. This is not – this is probably – Best Buy shows no acceleration of online shopping based on web scraping done by Evercore ISI.
Well, this matches what we heard from Best Buy last week. That Sales — Same-store sales in North America are down 15% ahead of Black Friday. That’s a surprising, surprising reduction for a company with large inventories. At the same time, we have to clear our inventory and we are very aggressive with a lot of promotions.
My take is this, stay at Best Buy. No shockers here. Best Buy’s holiday season may never arrive. And Soz the Grinch is back, enjoying Black Friday and perhaps looking for discounted gifts at Best Buy. For , starting the holiday season can be a daunting task. I mean, it’s very bad. And to me, that suggests he’s an earnings warning waiting to come in the first week of January.
Jared Brickle: Well, well, I’m — we’re going to get to the bottom line right here. I read this a few years ago so let me ask. It’s usually the biggest shopping day of the year, unrelated to Black Friday or Thanksgiving that week. And that’s just the Saturday and Sunday before Christmas.
Well, in a few weeks, the year will end. I think Christmas will come on Saturday or Sunday. So is it possible that we’ll see blockbusters if people are simply delaying all purchases?
Brian Sotzi: Come on, Jared. that’s why you are here. In theory, having the holiday season and Christmas on a weekend should help retailers. But by then, discounts at Banana Republic, Abercrombie & Fitch, or Walmart and Target could be 30% to 40% off, and 60% to 70% off depending on the category. teeth. And even with enough volume moving, I think the margins are pretty underwhelming.
Jared Brickle: Pre-announcement, this is what I want, what I wish I had. Earnings disappointments are usually broadcast by companies before the closing date. Not always. what do you think about this? Are there other companies in your sights besides Best Buy?
Brian Sotzi: We typically receive many warnings and positive advance notices during the first two weeks of January, usually after the peak holiday season. There will be a winner this holiday season. you see walmart I wouldn’t be shocked if they came out and lifted their guidance in early January.
And the second thing to notice is that this will be a holiday season with very distinctive winners and losers. Also, more store closures may be announced in January. I’m talking about Bed Bath & Beyond in this morning’s Journal article. That’s one of the retailers likely to close hundreds more stores.
Jared Brickle: Well, I–Let’s pick up YFi Interactive. Here we pull up the retail landscape, the heatmap. This is what happened today. You see more red than green. Red was also concentrated on some of those megacaps.
As you can see, Brian, this bifurcated market. I have shown this a lot compared to 1 month. At the top of the screen are BJ, Ulta, DG, Dollar General, Kroger, TJX and Dollar Tree. At the bottom is where to find many of these e-retailers: Amazon is down 44% here.Shopify, sorry for highlighting here. Wayfair down 82%.
But last month, many of those e-retailers were also hit. So Amazon is at the bottom, down 22%. However, American Eagle Outfitters is up 44% on him. Please allow me to display only the beginning of the year. So you can really see the rise. This is impressive. Many stocks have failed to renew their midyear highs. Some of these guys have.
Brian Sotzi: Yeah, I love seeing these retail stocks during the day on Black Friday. That was an interesting chart you threw in there. I think investors realize the crowd isn’t where it should be. And then of course there are the Adobe numbers, which I find very disappointing. At least early on. The next report from Adobe will be at 6:30 tonight.
