Mastercard Inc (NYSE: MA) stock continued its bullish momentum rising 1% in the pre-market session on December 28th, 2018 (Source: Google finance). The company received an upgrade by Edward Jones from Hold to Buy.
Meanwhile, Aarobust shopping season from before Thanksgiving through Christmas has given retailers much to cheer about this year. According to Mastercard SpendingPulse, which provides insights into overall retail spending trends across all payment types, including cash and check, holiday sales increased 5.1 percent to more than $850 billion this year, which is the strongest growth in the last six years. Online shopping also saw large gains of 19.1 percent compared to 2017. The Mastercard SpendingPulse report details holiday shopping from November 1 through December 24. Key findings of the report indicate that despite weather challenges, this was a winning holiday season for retail overall.
Total apparel had a strong season with a growth rate of 7.9 percent compared to 2017, recording the best growth rate since 2010. The category followed through on a strong momentum that started during the back-to-school season and accelerated through fall right up to Christmas.
Home improvement spending continued to surge across the U.S. with spending during the holiday season up 9.0 percent. This trend started before the holiday season and helped the sector power through to a strong finish.
Department stores finished the season with a 1.3 percent decline from 2017. This follows two years with growth below 2 percent, some of which can be attributed to store closings. However, the online sales growth for department stores indicated a more positive story, with growth of 10.2 percent.
Electronics and appliances were down 0.7 percent. The home furniture and furnishings category grew 2.3 percent.
Poor weather did pose an issue during some primetime shopping periods. This included cold weather on Black Friday morning on the East Coast and wet weather conditions the weekend of December 15-16, on both the East and West coasts. Conditions were also less than ideal on Friday, December 21, in the East, with storms that impacted the final run of the season.
Moreover, during the third quarter, net revenue increased 15% as reported, or 17% on a currency-neutral basis. The new revenue recognition rules contributed 3 percentage points to this growth.
During the third quarter of 2018, Mastercard had repurchased approximately 5.6 million shares at a cost of $1.2 billion and paid $260 million in dividends. Quarter-to-date through October 25, the company repurchased an additional 1.8 million shares at a cost of $385 million, which leaves $0.8 billion remaining under current repurchase program authorizations