As Black Friday kicks into full swing, one analyst detailed four retail stocks that are the early morning winners with the most traffic so far.
Paul Taggart | Bloomberg | Getty Images
In an interview with CNBC's "Squawk on the Street," UBS analyst Roxanne Meter said she is seeing cleaner balance sheets and better controlled inventories at retailers compared to last year.
"I think what you see going on is you've got a reversal of sourcing cost pressure so now retailers will have more power to promote and still be able to maintain margins," Meyer said.
Last year, retailers entered the holiday season with too much inventory so they had to discount extensively. But because of the reversal of sourcing cost pressure, Meyer expects companies to mimic 2011's promotions or even increase them while also maintaining healthy bottom lines.
So far she is "pretty encouraged about the start" to the crucial shopping holiday and estimated that the average discount is about 40 percent, roughly flat compared last year's markdowns.
"If we had to sum up who are the early morning winners and really seeing the most traffic, it would be Express, Victoria's Secret, Urban Outfitters and American Eagle Outfitters, " Meyer said.
She also cited TJX Cos. and Ross Stores as having continued strength this year as off-price retailers become more mainstream with the average consumer.
—By CNBC.com's Katie Little; Follow Her on Twitter @katie_little
Additional News: These 8 States Will Tax Your Amazon Purchases
Additional Views: What's Trending in Retail
______________________________
CNBC Data Pages:
- Dow 30 Stocks—In Real Time
- Oil, Gold, Natural Gas Prices Now
- Where's the US Dollar Today?
- Track Treasury Prices Here
______________________________
Disclosures:
Roxanne Meyer does not own shares of the companies mentioned in this article.
