Purchasing Paradox
Consumers are stressed about over spending for the holidays so they end up spending even more – to calm their nerves. But in doing so end up worsening their situation, per a report from Credit Karma.
- 96% of adults surveyed are worried about the economy.
- 27% are ‘doom spending’ – buying simply to cope with their stress.
- 32% of US shoppers have taken on debt in the past 3 months, particularly Millennials and GenX.
- 35% of Gen Z and 43% of Millennials are leaning into ‘doom spending’.
FINANCE
Victoria’s Secret (USA) reported a Q3 loss of $71 million. Net sales fell 4% to $1.27 billion, while comparable stores sales were down 7%. In North America, the brand’s biggest market, sales fell 11%. International sales fell 2.4%.
Foot Locker (USA) beat market expectations in Q3 with analysts noting a clear turnaround for the retailer. Total sales fell 8.6%, to $1,986 million, with comparable store sales down 8%. Net income fell 71% to $28 million.
Academy Sports and Outdoors (USA) reported Q3 revenue fell 6.4% to $1.4 billion. Comparable sales fell 8%. EBITA fell 18.8% to $174.5 million.
Express, Inc (USA) reported Q3 net sales rose 5% to $454 million, mainly driven by the growth of its Bonobos brand. Comparable sales fell 4%. The retailer reported an operating loss of $28.7 million, with a net loss of $36.8 million.
Citi Trends (USA) reported Q3 sales fell 6.7% to $179.5 million. Comparable store sales fell 6.2%. The company reported an operating loss of $6.0 million, compared with operating income of $31.6 million a year ago.
Dollar Tree (USA) reported Q3 net sales increased 5.4% to $7.3 billion. Comparable store sales rose 3.7%. Operating income declined 3.4% to $482.7 million.
PODCAST
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RETAIL
US Black Friday and Cyber Monday sales hit a new record, drawing 200.4 million shoppers, both online and in-store. Although off to a fast start, the race to Xmas still has three weeks to go – and retailers will be challenged to keep the momentum going.
- 49% bought clothing and accessories, 31% spent on toys, 25% purchased gift cards, and 23% bought video games, books and media, personal care or beauty items, per the National Retail Federation (NRF).
- Shoppers spent about $321.41 each on holiday-related items, per the NRF.
- Pre-holiday online spending rose 5.9% to $76.8 billion during October, per Adobe Analytics.
- Black Friday orders through Klarna jumped nearly 30%, as consumers leaned into credit to pay for purchases.
In Europe, Black Friday remained the biggest shopping day, however more consumers waited to make purchases hoping for better deals, per Awin Solutions.
In the UK, from Black Friday through to Cyber Monday online retail revenue rose an average of 8% over 2022, per Visualsoft. Fashion sales rose 30% year-on-year during the trading period and lingerie and underwear improved by almost 70% in revenue.
BuyBuy Baby (USA) will be reopening 100 stores, per Dream On Me, which purchased the brand from Bed Bath and Beyond during its bankruptcy filing. The new owner plans to expand internationally and open smaller-footprint locations, as well as find the right mix between e-commerce and physical stores.
MARKETS
Jerome Powell has indicated that the Federal Reserve could raise US interest rates further amid concerns that inflation is not yet fully under control.
Inflation across the eurozone fell by more than expected in November. The November estimate for CPI inflation dropped from 2.9% to 2.4% YoY, while the core inflation rate fell from 4.2% to 3.6% YoY.
In the US, firms are reluctant to fire workers, but they are less inclined to hire new workers – more evidence of a cooling, but not collapsing, labor market, per ING Bank.
Nearly two-thirds of Americans still think a recession is either “somewhat” or “very likely” to happen in the next year, per the Conference Board data.
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