Retail stocks are expected to get a lot of attention this week after big sales on Black Friday and Cyber Monday.
Amazon:
Amazon.com Inc (NASDAQ:AMZN) had its busiest day its ever had on Black Friday with consumers all around the world who went to the website to take advantage of more than 3,000 exclusive deals. Some of its best-selling products were the Kindle Fire HDX Range, diamond jewelry and men’s watches. Amazon sold more than 5.5 million products at a rate of 64 items a second.
However, this year Amazon has predicted that Cyber Monday will rake in even more sales than Black Friday. With competition from other e-commerce websites like Alibaba (NYSE:BABA) and eBay (NASDAQ:EBAY), it is expected that Amazon is offering as many deals as it can.
It’s important to remember that Amazon is not only an e-commerce website, but a huge IT company as well. Its cloud data center, Amazon Web Services (or AWS for short) has been rapidly gaining momentum and creating a lot of buzz among the public. Investors are curious to see if AWS could eventually dominate the data center space.
Amazon last announced its quarterly earnings on October 23rd, posting what was its biggest loss in more than a decade. They reported a per-share loss of 95 cents, widening from a 9-cent loss in the same quarter last year. Analysts expected a 74-cent loss. Although Amazon pulled in $20.58 billion in revenue, they also posted a net loss of $437 million. The loss was bigger than expected due to a surge in spending on R&D and product development on items like the Amazon Fire phone, which ended up being a big flop.
The company is currently worth around 160 billion dollars, 20% less than its peak in January earlier this year.
It will be interesting to see how Black Friday, Cyber Monday, and Holiday sales in general will affect Amazon stock.
Barnes & Noble:
Over the past seven quarters, Barnes & Noble (NYSE:BKS)has seen a decrease in book sales and a decrease in demand for its e-reader, the Nook. However, this yea Barnes & Noble tried to take advantage of being a physical bookseller by offering 500,000 discounted autographed books specifically for their stores across the United States on Black Friday.
The company got more than 100 authors – including E.L. James, Dan Brown, and Hilary Clinton – to sign at least 5,000 copies of their books.
In addition, the company is set to announce its fiscal second quarter 2015 earnings report on Thursday before the market opens.
Barnes & Noble is expected to report a profit above analysts’ estimates for the second quarter with earnings per share estimates of 17 cents, compared to 15 cents in the prior-year quarter.
Abercrombie & Fitch:
Abercrombie & Fitch (NYSE:ANF) has historically outperformed during the week of Thanksgiving. However, the stock had a surprisingly harsh Thanksgiving week, down 1.1%.
While the markets have gone up this year, shares of Abercrombie & Fitch have dropped 11.5% since the calendar year began.
The company is scheduled to announce its third quarter earnings report on Monday before the market opens with an estimated earnings per share of $0.41, up from $0.19 last quarter.
Most of Abercrombie and Fitch’s revenue comes within the US, thus the firm has been eager to expand its global reach.
The company currently has over 830 stores in the US and almost 170 stores in Canada, Asia, Australia, the Middle East and Europe.
Abercrombie & Fitch is now looking to start franchising in Mexico with the goal of having stores set up in four major Mexican cities by the end of 2015.
It is believed that the company’s expansion in Mexico will position it better to compete against its competitors like Aeropostale (NYSE:ARO) and American Eagle Outfitters (NYSE:AEO), and fast-fashion retailers such as Zara, Forever 21 and Hennes & Mauritz (ST:HMb).