Friday, December 30, 2011

The Truth About Black Friday

I expected better from the NY Times. I did not expect The Times would recycle, as it did in today’s article on the troubles at Sears Holdings, the often-reported but factually false statement that “retailers make all their money at Christmas. Or they don’t make any money at all.”

Black Friday. How often have we been “treated” to media reports that Black Friday, the day after Thanksgiving, derived its name because it is the day when the ledger books of retailers turn from red ink to black as shoppers rush out to buy, buy, buy all the stuff they’ll put under the Christmas tree, or Hanukkah menorah, for friends, family and mostly themselves?

Perhaps at one time, when retailing was an industry of mostly small, independent merchants, the Black Friday tale was true. But in today’s chain-store dominated retail world, most companies already are flush with profits. At the risk of bogging you down with too much data, take a gander at the list of 54 retailers below. All of them are public companies that reported results through the third quarter of their current fiscal year (the period ended for most around October 31, well before Black Friday). Next to each name are its net earnings in 2011 versus the same nine-month period in 2010. Losses are noted in parentheses.

You’ll notice that of the 54 companies, just 12 reported losses this year; nine did so a year ago. Some companies, such as Big Lots and Lowe’s, had lower profits this year compared to 2010, but they still showed black ink well before Black Friday.

It is true a bad holiday shopping season could easily wipe out any accumulated profit during the prior 39 weeks. But that doesn’t excuse inaccurate reporting that retailers make all their money at Christmas. Though we will never be spared the incessant hype for Black Friday and beyond, hopefully next year we won’t be told companies like Macy’s, which recorded more than half a billion dollars in net earnings through October, needs Black Friday to start earning a profit.

Company—9 mos. 2011—9 mos. 2010
Wal-Mart $10.980 billion vs. $10.781 billion
Target $1.948 billion vs. $1.885 billion
Dollar Tree $300.4 million vs. $234.8 million
Big Lots $92.3 million vs. $112.5 million
Dollar General $474.2 million vs. $405.3 million
Duckwall Alco ($550,000) vs. ($5.4 million)
Fred’s $23.6 million vs. $21.0 million
Home Depot $3.109 billion vs. $2.751 billion
Lowe’s $1.52 billion vs. $1.73 billion
Sears Holdings (includes Kmart) ($743 million) vs. ($232 million)
Belk $57.5 million vs. $32.6 million
Bon-Ton ($90.3 million) vs. ($63.5 million)
Dillard’s $322.4 million vs. $70.0 million
JC Penney ($65 million) vs. $118 million
Macy’s $511 million vs. $180 million
Saks $37.8 million vs. $22.9 million
Nordstrom $447 million vs. $381 million
Kohl’s $711 million vs. $626 million
Ross Stores $465.2 million vs. $393.0 million
Stage Stores ($1.7 million) vs. $5.7 million
Stein Mart $14.1 million vs. $29.9 million
TJX $1.02 billion vs. $1.01 billion
Urban Outfitters $146.0 million vs. $197.7 million
Abercrombie & Fitch $108.1 million vs. $57.7 million
American Eagle Outfitters $100.4 million vs. $53.6 million
Buckle $95.4 million vs. $85.2 million
The Children’s Place $53.0 million vs. $51.0 million
Gap $615 million vs. $839 million
Ann Taylor $84.4 million vs. $65.4 million
Cato Corp. $54.7 million vs. $47.9 million
Charming Shoppes $11.1 million vs. ($23.6 million)
Chico’s $115.8 million vs. $94.7 million
Coldwater Creek ($86.9 million) vs. ($7.1 million)
Limited Brands $491 million vs. $352 million
New York & Co. ($28.0 million) vs. ($91.5 million)
Talbots ($58.6 million) vs. $13.6 million
Wet Seal $14.0 million vs. $7.3 million
Big 5 Sporting Goods $11.7 million vs. $16.6 million
Cabela’s $73.0 million vs. $45.9 million
Dick’s Sporting Goods $152.8 million vs. $94.6 million
Golfsmith $6.5 million vs. $222,671
Hibbett Sports $43.2 million vs. $33.9 million
Office Depot $75.3 million vs. $53.7 million
Staples $701.1 million vs. $607.2 million
Books-A-Million ($10.4 million) vs. $2.2 million
Build-A-Bear Workshop ($8.1 million) vs. ($8.2 million)
Michaels Stores $79 million vs. $0
Toys “R” Us ($194 million) vs. ($162 million)
GameStop $165.2 million vs. $170.2 million
Williams-Sonoma $114.3 million vs. $86.8 million
Guitar Center ($64.8 million) vs. ($54.2 million)
Best Buy $467 million vs. $626 million
RadioShack $60.3 million vs. $149.1 million
Tiffany $260.8 million vs. $187.2 million

(Editor’s Note: This will be the last posting of 2011. Thank you all for sticking with me. If you like my musings and rants, tell a friend or relative to log on and sign up. It’s free, and sure to be topical and probably controversial in 2012. I hear there’s an election coming up... Have a happy and healthy New Year!)