NEW YORK (TheStreet) -- Media reports judging retailer's Thanksgiving weekend performance have tended to focus on which company used the largest markdowns for its tablets, toys and other products. But the real winners are to be found among retailers that generated a boost in sales without having to depend on those promotions.
Analyst Camilo Lyon of Canaccord Genuity argues that with strong consumer followings showed less of a need to opt for discounts over the Black Friday weekend.
"Among the plethora of deals that persisted throughout the Black Friday weekend, webelieve the stronger brands/retailers prevailed over those that needed to use heavypromotions to drive traffic," Lyon writes in a note to clients on Monday. "Specifically, we believe LULU, DECK, KORS, SHOO and UAwere among the brands that offered relatively limited promotions, while not suffering fromlack of traffic/consumer interest."
He noted that athletic apparel likely fared better than traditional apparel as promotions were "shallower and/or narrower."Lyon reiterated his "buy" rating on lululemon athletica (LULU).
LULU data by YCharts
"Typically, LULU does not participate in Black Friday promotions; however, we believe this year the company smartly held back on displaying clearance items before the holiday so that it could offer value options to its customers during the Black Friday weekend," the note said. "As such, we noticed 2-4 racks of women's clearance and one rack of men's clearance at any one time during the weekend - in no way causing us concern with respect to gross margins. In fact, the volume of sale rack items was thin and predominately concentrated in the larger sizes. "In addition, LULU also brought in new product at the same time so as to fully optimize the in-store traffic," Lyon writes. "We therefore believe LULU benefitted from solid conversion at relatively healthy margins during the weekend." "Moreover, while recent press has been deservedly unflattering given the founder's misplaced comments ... we are hard-pressed to believe the value of the brand has permanently eroded as evidenced by the throngs of LULU loyalists that continue to view it as the premium athletic apparel maker of choice," the note says. Lululemon shares were rising 2.6% to $71.55 on Monday. Written by Laurie Kulikowski in New York. Follow @LKulikowski
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