D.A. Davidson named E.l.f. Beauty Inc. stock as its best holiday idea in health & beauty/leisure on Monday and home-improvement retailer Lowe’s as best idea in retailing broadlines & hardlines in an upbeat note predicting solid holiday sales growth this year. Reports suggest Black Friday weekend sales were up solidly versus last year, while Mastercard’s SpendingPulse said spending rose 12% on a relatively even split between in-store and online, analysts led by Linda Bolton Weiser wrote in a note. Sensormatics Solutions found in-store traffic was up 2.9% on Black Friday and up 19.7% on Thanksgiving Day. “These checks are consistent with our admittedly unscientific store checks which showed nice levels of traffic at stores. But, perhaps most importantly, our data work shows that retailers are having some success working down their inventory glut,” the analysts wrote in a note to clients. E.l.f. is expected to post another upside surprise for its fiscal third quarter, said the note. That’s because it is de-emphasizing holiday gift sets, which dampen gross margins; its point-of-sale growth in the first two months of the quarter stands at about 39%; and management had planned a big boost in marketing spending which should drive consumption in the quarter. Lowe’s, meanwhile, “usually performs well this time of the year, due in large part to relatively low holiday exposure / risk,” said the note. E.l.f. shares were up 0.9% premarket and have gained 67% in the year to date. Lowe’s was not active but is down 18% in the year to date, while the S&P 500 has fallen 15%.
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