Black Friday retailers are surging as online spending hits a record

black friday

The stocks of retailers — including a large handful of traditional brick-and-mortar companies — are surging as shoppers participate in Black Friday and Cyber Monday.
US retailers brought in a record $7.9 billion in online sales on Black Friday, while Cyber Monday sales are expected to be bigger than ever.

Retailers are off to a stellar start this holiday season thanks to the surging popularity of online shopping, and stock investors are taking notice.

US retailers brought in a record $7.9 billion in online sales on Black Friday and Thanksgiving, a 17.9% surge from the prior year, according to data compiled by Adobe Analytics, which tracks the 100 biggest online shops. The growth sent shares of companies like Amazon, Macy's, The Finish Line and Gap soaring more than 1.6% on Friday, with more strength being signaled at Monday's open.

Those gains make sense when you consider that online retailers are expected to rake in an additional $6.6 billion on Cyber Monday. Meanwhile, shoppers are on pace to spend 14% more than last year during the holiday season as a whole, according to Adobe.

Here's a rundown of the most notable holiday movers so far:

Amazon: +2.6% Friday, +1.2% Monday
Macy's: +2.1% Friday, +0.8% Monday
Gap: +1.6% Friday, +3.6% Monday
Kohl's: +1% Friday, +0.9% Monday
JCPenney: +0.6% Friday, +2.5% Monday
Walmart: +0.2% Friday, +0.8% Monday

Traditional brick-and-mortar retailers boosted their online efforts in the weeks leading up to the start of holiday shopping season, improving their websites and delivery processes, and it ultimately paid off for many of them.

While actual brick-and-mortar sales statistics aren't yet available, anecdotal evidence suggests a slight slowdown in foot traffic from previous years. Further, many shoppers who did make the trek to stores were believed to be simply browsing, doing diligence on products and saving their money for online purchases.

Amid the considerable gains in many holiday retailers, it's important to note that their strength didn't translate to gains in the most popular exchange-traded fund used to track the industry. The SPDR S&P Retail ETF slipped 0.4% on Friday, as declines in non-holiday-focused companies like PetMed Express, Rent-a-Center and Rite Aid led it lower.

That was unfortunate news for traders hoping to capitalize on the Black Friday bonanza by buying exposure to the ETF. They poured $233 million into the fund in the month leading up, including $121 million on November 17 alone, only to see it decline.

The fund's performance is an important cautionary tale for investors looking to use ETFs to bet on specific corporate events. In this case, traders would've been better off dealing in single stocks — preferably those best positioned to capitalize from the online-driven holiday rush.

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