The Most Wonderful Time of the Year (for Retailers)
If you’ve found yourself in a shopping mall or a downtown retail core lately, you’ve probably noticed it. With still a week to go before the Thanksgiving weekend, the blitz has already begun. What most of us refer to as the holiday shopping season–but for retailers is the “holiday selling season”—is gaining momentum now, and will be in full swing by late next week.
As if the visual cues weren’t enough, we can see from their filings that retailers are gearing up. It doesn’t take a very fancy query to illustrate the point: just text search “holiday selling season” on the SEC filings so far this month.
Of course, the more meaningful disclosure on holiday sales is not prospective, but retrospective. It’s the filings from the first quarter — looking back over the previous quarter or year — where we’re likely to get something like a true measure of how the holidays went for businesses. And it’s in companies’ Annual Reports where we get a glimpse at trends over time. We can learn, for example, that for a retailer like Toys R Us, almost 40% of the year’s net sales are from the holiday-focused fourth quarter.
Then again, holiday disclosure (perhaps like disclosure claims generally) should be regarded with a healthy dose of skepticism. Certainly, one should be wary of concluding too much from returns on the post-Thanksgiving surge alone. A case in point is the 8-K filed by Circuit City on December 4, 2003. The company’s CEO cheerfully reported that “On the Friday after Thanksgiving, we generated a new company record for the highest sales volume produced in a single day.” Pass the cranberry sauce. But the company’s subsequent report on the fourth quarter as a whole was as lukewarm as leftover stuffing.
And, of course, just five years later, Circuit City filed for bankruptcy.