New York : US retailers reported stronger-than-expected sales for November, as shoppers flocked to stores and spent more during the annual discount bonanza known as Black Friday.
Still, analysts cautioned that the discounting will need to continue in order to bring shoppers out this month, which could pressure margins.
Retailers as diverse as department store chain Macy's Inc, discounter Target and teen clothier Abercrombie & Fitch all reported far bigger-than-expected gains in sales at stores open at least year. Shares of many retailers rose.
The Thomson Reuters same-store sales index, based on 27 retailers reporting, showed an increase of 6 per cent for November, compared with Wall Street's estimate of 3.6 per cent.
The strong sales are the latest sign that the US economic recovery is on track as consumer spending accounts for 70 per cent of the economy.
"We're seeing the results of pent-up demand," said David Bassuk, a managing director at consulting firm AlixPartners. "There's no question this was extremely driven by discounts."
For the retail stocks to keep rising, shoppers need to keep spending and not be so reliant on specials.
"Ultimately, whether these stocks [up] is on the consumer's shoulders," said Wall Street Strategies analyst Brian Sozzi.
"Consumers need to start adding leverage to their balance sheet" and spend more in non-holiday periods.
Macy's raised its holiday sales forecast, but analysts warned retailers not to get ahead of themselves. For one thing, Bassuk said, the discounts are likely to eat into profit margins. Also, consumers are still grappling with a difficult economy.
"It hinges on whether the labour market continues to show improvement," said Ken Perkins, president of research firm Retail Metrics. "If that happens retailers will be in OK shape and not have to discount as much."
Last week the S&P Retail Index hit its highest level since 2007 and is up 26 per cent since August on hopes of improving earnings, leading some analysts to believe retailers' shares are at a plateau. Over Black Friday weekend, retailers benefited as more people spent money on themselves and weather cooled after a mild October, when people delayed buying winter clothes.
