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The Black Friday deals were plentiful. All told, sales for the day hit a new record of $9.8 billion, up 7.5% from a year ago, according to Adobe Analytics.1
Retailers extended discounts to entice shoppers to buy early and often, and with five full weekends between Thanksgiving and Christmas, there’s reason for hope that the consumer will once again save the day.
Are there cracks just under the surface, though? Consider that Walmart’s CEO Doug McMillon warned that retail demand trends appeared to slow over the back half of October in the company’s Q3 report earlier this month.2
Still, as retail sales totals for last weekend tally up, there are mixed signals as the calendar now flips to December.
Interim Data in Focus
Interim company data can shed light on emerging themes before we read about them in quarterly earnings reports and conference call transcripts.
There’s arguably no better time of the year to review what’s happening monthly with some of the nation’s most important consumer companies.
Unfortunately, only a handful of big-name firms still report same-store sales. Let’s dig into those that have key numbers due out in the coming days. Insights gleaned from retailers and automakers can be critical to managing risk.
Costco November Sales on Tap
First, Costco (COST) has vaulted itself to become the second-largest weighting in the Consumer Staples sector, as measured by the SPDR sector ETF (XLP).3
Now worth more than Walmart (WMT) and Target (TGT), the discount club caters to a generally wealthier cohort, often comprised of growing families in America and, increasingly, around the world.4
Not only does the Washington-based retailer boast healthy sales growth from its stores, but reliable recurring revenue via its annual membership fee (and high retention rate, above 90%) make it an industry stalwart.5
Rumors persist that the annual fee, unchanged since 2017, will soon be on the rise. Richard Galanti, the firm’s CFO, said back in September that a membership cost increase was a “matter of when, not if.”6
COST Monthly Sales Growth Normalizing, Quarterly Results Two Weeks Away
Outside of earnings season, Costco’s monthly same-store sales reports often garner attention from the financial media, and there’s perhaps no more important bellwether update than its November interim sales report.
Be on the lookout for results on the afternoon of Wednesday, November 29.7 It really is a treasure trove of data, including a breakout of sales among the U.S., Canada, and its Other International geographic segment.
Important for the holiday shopping period, E-commerce sales are also provided. The data is also adjusted to exclude fluctuations in gas prices and foreign exchange movements.
The company reported 3.4% Total Company sales growth on an adjusted basis in its previous update with E-commerce sales 3.1% higher on a year-on-year basis for the four weeks ending October 29, 2023.8
Costco will report its full Q1 report on Thursday, December 14 AMC with a conference call later that evening. Lastly, its shareholders’ meeting takes place on January 18.
Apparel Sales Clues from The Buckle
It’s not all about the big-box stores. One small apparel retailer, The Buckle (BKE), issues its November comparable-store sales report a week before Costco’s Q1 2024 earnings results.
While just a $1.9 billion market cap firm, this mall-based retailer might offer a first glimpse at clothing and accessories demand for the first handful of weeks of the holiday season.
Expectations should be tempered, however, considering that The Buckle posted an 11.1% YoY decrease in net sales for the four weeks ended October 28, 2023, with a pronounced decline in women’s clothing revenue.9
Automakers Hope to Move On from Labor Disputes in October
Away from day-to-day purchases, investors will get a slew of monthly vehicle production and sales reports to chew through starting on Thursday, November 30. That is when Toyota (TM), Honda (HMC), Mazda (OTCPK:MZDAY), and Subaru (OTCPK:FUJHY) release monthly numbers.
Ford’s (F) figures come the following Monday. Before then, be on the lookout for potential volatility from General Motors (GM) when it hosts a business update conference call on Wednesday morning this week.
Ford and GM also have speaking dates at the Barclays Global Automotive and Mobility Tech Conference 2023 on Wednesday and Thursday this week.
Amid all that, Tesla (TSLA) shares could be on the move as its management team is slated to present at the Macquarie International Equity Conference 2023 from November 29 to the 30th in Australia.
Following an uncertain stretch for the domestic big 3 automakers during October’s labor negotiations, shifting gears back toward regular production activities is likely healthy for the industry. We will also soon find out how confident consumers were in November through these interim sales tallies.
The Bottom Line
There are signs of softening retail demand. Along with cautious commentary from Walmart’s CEO, the October Retail Sales report cooled off significantly from a hot streak from July through September.10
With the holidays in full swing, investors should keep up with near-term sales trends from important US and global retailers and auto manufacturers.
1 Black Friday online buying hits a record $9.8B in the US, $70.9B globally | TechCrunch, Ingrid Lunden, November 25, 2023
2 Walmart Stock Tanks 8% As Retailer Warns Consumers Still Tightening Their Belts, Derek Saul, November 16, 2023
3 XLP: The Consumer Staples Select Sector SPDR® Fund, State Street Global Advisors, November 27, 2023
4 Better Stock Buy: Walmart vs. Target vs. Costco | The Motley Fool, James Brumley, August 24, 2023
5 Costco Delays Membership Fee Hike as Member Growth Continues – Retail TouchPoints, Bryan Wassel, May 31, 2023
6 Costco says it will raise its membership prices, Today, Alex Portee, September 29, 2023
7 October Sales Results, Costco, November 1, 2023, Events & Presentations
8 Costco Wholesale Corporation Reports October Sales Results, GlobalNewswire, Costco Wholesale Corporate, November 1, 2023
9 THE BUCKLE, INC. PRESS RELEASE NARRATIVE FOR 11/2/2023, The Buckle, Inc., November 2, 2023
10 U.S. Retail Sales, Trading Economics, November 27, 2023
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
