On Monday, a KeyBanc analyst provided insights into the latest retail spending trends following Black Friday, indicating mixed performance across various sectors.
"This week's KFL Data is particularly difficult to interpret as Thanksgiving and Black Friday moved to week four of November 2024 vs. week three of November 2023. Thus, the comparisons will be difficult for this week and easier for next week," said KeyBanc in a research note.
The analysis highlighted a 3.3% decline in the All Retail category for the week ending November 24, marking a deceleration from the previous week's 0.5% decline. This drop also contrasts with the gains seen in prior months, where October showed a 2.7% increase, September a 1.2% decrease, and August a 1.7% increase.
In the Hardlines/Broadlines sector, there was a notable slowdown, with median indexed spending down 8.0% year-over-year compared to a marginal 0.3% decline in the previous week. The analyst attributed this trend to a shift away from pandemic-related spending patterns and pressures from higher living costs, weaker consumer credit conditions, and geopolitical uncertainty. Specifically, the Furniture & Home Furnishings category saw a significant 16.7% drop in indexed spend, and the Mattress category experienced a 37.3% decrease.
Home improvement retailers Lowe's (NYSE:LOW) and Home Depot (NYSE:NYSE:HD) reported indexed spending declines of 3.3% and 3.8%, respectively, both showing a deceleration from the prior week. Lowe's has reportedly outperformed Home Depot in nine of the last twelve weeks. In contrast, the Discount Store category faced an 8.2% decline in indexed spend, with Dollar Tree (NASDAQ:DLTR) being an exception, showing a 15.3% increase, while Dollar General (NYSE:DG) and Family Dollar experienced decreases.
Broadlines retailers also saw mixed results, with Walmart (NYSE:NYSE:WMT) experiencing a slight 1.5% decrease in indexed spend, and Target (NYSE:NYSE:TGT) facing a more substantial 13.7% decline. Walmart is believed to continue gaining market share, according to the analyst. Meanwhile, the Pet Shops, Pet Foods, and Suppliers category showed a minor 0.3% increase in indexed spend, which is a positive change from the six-week average.
The analyst concluded with expectations of more subdued retail performance in the near term, considering the various challenges consumers are facing. Looking ahead, companies like Lowe's, Target, and Wayfair (NYSE:NYSE:W) may see more favorable year-over-year comparisons. Dollar Tree and Ollie's Bargain Outlet (NASDAQ:OLLI) were noted as positive, while Best Buy (NYSE:NYSE:BBY), Five Below (NASDAQ:FIVE), Home Depot, Lowe's, Target, and Tractor Supply Company (NASDAQ:TSCO) were indicated as negative.
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