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Author: Alan LittleDate: 2021-11-29

New COVID-19 fears taint Black Friday as Target (TGT), Walmart (WMT) slip 1%

Concerns about a new COVID-19 variant pressured US retailer stocks including Target (TGT) on Friday despite analyst expectations for strong holiday sales.

Major US retailers including Target (TGT) and Walmart (WMT) closed lower following a shorter session on Black Friday amid growing concern among investors about the spread of a new COVID-19 variant.

Trading resumed on Friday after markets were closed on Thursday due to Thanksgiving, but the beginning of the holiday shopping season didn’t bring much festive cheer for retailers.

Target looked set to make gains after Deutsche Bank said that it was on track to deliver 11% more sales over the Black Friday weekend, which includes Cyber Monday, compared to the same four-day period a year ago.

Analyst Krisztine Katai also believes that Target is “very well positioned” to perform admirably during the next four weeks, a viewpoint that was backed up by a company spokesperson who said that the retailer is “well stocked and ready”.

Katai added: “The retailer made inventory investments during third quarter 2021 and exited the quarter with more than $2 billion higher inventory levels year-on-year.”

Telsey Advisory Group’s Joseph Feldman also forecast a strong holiday season for Target, but this didn’t translate into share gains on Friday as TGT finished 0.88% lower at $246.57 in New York.

It was a similar story for rivals including Costco (COST) and Walmart, which closed 0.65% and 1.12% down, respectively.

Those declines were modest compared to other fashion retailers and department stores as Macy’s (M) slumped 6.1% while Gap (GPS) slipped 4.2% during trading.

The main cause of the sell-offs was fears about the discovery of a “heavily mutated” COVID-19 variant called Omicron, which was first detected in South Africa.

The latest concerns also hit airline and travel stocks in trading on Friday after a relatively quiet week for the industry.

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