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With fewer shopping days between Thanksgiving and Christmas this year, retailers are eager to get a jump on the holiday season. Yet one survey recently found certain merchants have even more incentive to open their doors early.
A recently released Placed survey uncovered which brick-and-mortar retailers holiday shoppers have a high propensity to visit. The study found that young adult apparel retailers and off-price department stores ranked highest among merchants we're willing to visit on Turkey Day.
Near the top of the list, the survey found consumers nearly 50% more likely to visit Aeropostale (NASDAQOTH: AROPQ ) on Thanksgiving based on pre-holiday observed visits. Given the difficulties this retailer has been facing lately, it should reconsider its "closed" status on what's quickly becoming opening day of the holiday shopping season. Aeropostale sported an ugly 6% top-line decline last quarter, primarily due to an unattractive double-digit drop in same-store sales. Furthermore, the teen apparel retailer has significantly discounted items, which has resulted in anemic gross margins and operating losses.
Off-price department stores Ross Stores (NASDAQ: ROST ) and TJX's (NYSE: TJX ) Marshalls also ranked high on the survey's list, with consumers 35% and 16%, respectively, more likely to visit these merchants. These retailers have enormous scale, making it easier for them to buy large amounts of inventory and cost-effectively deliver these goods to their customers. And since the economic downturn, Ross and Marshalls have benefited handsomely from the upsurge of their targeted value-conscious consumer. Sales at Ross have grown roughly 11% per year over the last five years. Earnings per share have increased a tremendous 30% annually during that same period. By comparison, sales at Marshalls have increased 8% annually over the most recent five years, and EPS has grown at a 23% annual clip during that same period.
American Eagle Outfitters (NYSE: AEO ) rounded out the list, with shoppers 12% more likely to visit the teen apparel retailer. American Eagle reported a 7% drop in same-store sales and a 2% decline in revenue last quarter. Like Aeropostale, American Eagle has recently suffered gross margin contraction, mostly due to merchandise markdowns. However, unlike Aeropostale, American Eagle has trimmed back its expenses and operating footprint.
Will these four retailers change their minds and open their doors to consumers one day ahead of Black Friday? That's anyone's guess. But it certainly seems they risk leaving money on the table by not opening their doors on Turkey Day.
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