Many economists have been predicting a flat holiday sales season in the U.S. due to a weaker economy brought on by higher inflation. So far however, the long Thanksgiving weekend has been more buoyant than expected. To begin, Black Friday sales broke $9 billion in sales which is a record number for the day. According to the head of retail at Salesforce (CRM), consumers are seeking value as seen in the strong correlation between discount percents and the resulting online sales.
Wall Street has also weighed in with their thoughts, with research firm Wedbush citing Deckers (DECK) – the parent of the UGG shoe brand – as the clearest winner of Black Friday week by their footwear and apparel team. Highlights include that UGG was one of the only brands tracked by Wedbush that was less promotional last week versus last year and one of few that saw growth in online searches. This “suggests that interest in the brand remains high even as most other brands see less robust demand,” Other positives include longer-than-usual lines at stores and significant buzz on social media.
DAILY CHART OF DECKERS (DECK)
In addition to Decker’s UGG brand, the company has a very successful sneaker brand named HOKA which reached $1 billion in sales in October. The product provides a more supportive and comfortable sole which has been very popular among middle aged athletes. The stock gapped up into a base breakout last week and is now in a confirmed uptrend.
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Mary Ellen McGonagle – MEM Investment Research