The verdict is in on Black Friday 2019…but ASX small caps and headline stats delivered differing results
Link copied to
Black Friday was so-called because the goal was to get retailers ‘back in the black’, but did it live up to its name for ASX small caps or was it just an overhyped fizzer?
The performance of ASX small caps in the retail and consumer sectors would suggest it was just another day.
In the retail sector the biggest gainer was Motorcycle Holdings (ASX:MTO), which advanced 6 per cent. In the month of November, that title belonged to pawnbroker Cash Converters (ASX:CCV), which was up 7 per cent.
But looking at the whole year, the picture looks even rosier with an average gain of 15 per cent. The leading stock was plus-size fashion outlet City Chic Collective (ASX:CCX), up 167 per cent.
Consumer-focused small caps were more robust. Five gained over 10 per cent on Black Friday including textile and homewear chain Merchant House (ASX:MHI), which jumped 33 per cent. Merchant was followed by Olivers’ Real Foods (ASX:OLI), which was up 24 per cent.
While the broader sector was unchanged in November and for the year to date, some stocks enjoyed gains. The leaders were electric scooter maker VMoto (ASX:VMT), up 293 per cent in 2019, and Datadot Technology (ASX:DDT), up 220 per cent.
NAB however reckons the event is paying dividends. It noted that overall sales for the day were up 45 per cent compared with the year before and has doubled since 2013’s event.
Some sectors enjoyed substantial gains, most notably Games and Toys, which was up by 75 per cent.
Of course many retailers, particularly online sellers, run promotions beyond just Black Friday. On that basis, 12 sales days were above the average sales for the month (on Mondays only) and of these, seven were towards the end.
NAB forecast the strongest ABS retail headline figure since February. However it warned growth would be subdued.
“Ultimately, it remains our view that retail sector fundamentals will continue to underperform,” chief economist Alan Oster said.
“Higher unemployment, sluggish wage growth and elevated debt will keep the brakes on spending growth, interest cuts notwithstanding. Ultimately, more stimulus is needed to fundamentally change this equation.”
Oster also warned strong Black Friday sales could represent Christmas spending being brought forward, which would lead to downside in December.