Black Friday Sales Numbers: What Investors Need to Know
Nov 28th 2011 12:03PM
Updated Nov 28th 2011 12:32PM
What's happening in the headlines can affect you as an investor. Here's what's going on, what you need to know, and what you should do.
The cold, hard facts
The Financial Times is reporting that retail sales on Black Friday grew by their highest margin since 2007. According to ShopperTrak, sales expanded by 6.6% from the previous year to $11.4 billion. Initial estimates indicate that online sales grew even faster.
In case you just arrived from another galaxy, Black Friday is the name given to the first "official" shopping day of the holiday season in America, the day after Thanksgiving. It's typically the busiest shopping day of the year.
Consumer goods manufacturers and retailers around the globe eagerly await the day's numbers, trying to divine from them how busy, or not, the holiday shopping season will be. Many businesses do the bulk of the year's commerce in these last five weeks of the year. Economists also use Black Friday as an unofficial bellwether for economic strength and consumer confidence.
What you need to know
The logic is, if consumers are scared about the state of their finances, worried about losing a job, or fiscally frightened for any reason, they're not going to spend, even for the holidays. So this year's big Black Friday numbers should bode well, including for investors.
Any company that deals in items that might be given as gifts, like Apple (NAS: AAPL) , Best Buy (NYS: BBY) , Gap (NYS: GPS) , Target (NYS: TGT) , and Amazon (NAS: AMZN) , can expect to have a better holiday season than the last few years. People who are invested in such companies, or in companies that feed off increased shopping traffic, like Starbucks (NAS: SBUX) or McDonald's (NYS: MCD) , can probably expect better performance out of their portfolios as a result, too.
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At the time this article was published Fool contributor John Grgurich loves the smell of the newsprint in the morning, but owns no shares of any of the companies mentioned above. The Motley Fool owns shares of Apple, Best Buy, Gap, and Starbucks. Motley Fool newsletter services have recommended buying shares of Apple, Amazon.com, McDonald's, and Starbucks. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services formerly recommended. Motley Fool newsletter services have recommended writing covered calls in Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a scintillating disclosure policy.
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