Early Friday morning, opportunistic shoppers will spend hours scouring for some of the year's best deals, creating "clear winners and losers" in the retail sector, BMO Capital Markets analysts John Morris and Brandon Cheatham said in a note this morning.
"As the post-election rhetoric has started to abate, we believe that the U.S. consumer will come through in a big way and do what it does best - buy all the things," the analysts said.
Still, a number of retailers recently issued downbeat guidance for the current holiday quarter. Just last week, shares of Gap (GPS) and L Brands (LB) tumbled after the companies respectively projected full-year and current-quarter earnings below analysts' estimates.
But retailers appear to be approaching guidance with an "abundance of caution," positioning themselves for upside, Morris and Cheatham said.
"In our view, most of the negative outlook for holiday is company specific, and the key to 4Q outperformance will be on-trend product and overly negative expectations," they added.
This past weekend, Express kicked off Black Friday week sales with bigger and broader promotions from last year, though sweaters were less promotional and denim sales were in line with last year's, MKM Partners analyst Roxanne Meyer said in a note today.
Promotions at both Gap and Old Navy were down year-over-year ahead of Black Friday weekend, according to Meyer.