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Mastercard's (MA) SpendingPulse Reveals '23 Holiday Sales Data
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Mastercard Incorporated (MA - Free Report) released preliminary insights about consumer spending trends across different categories this holiday season in its SpendingPulse report. Not adjusted for inflation, Mastercard SpendingPulse measures in-store and online retail sales across all payment types.
According to the latest report, U.S. retail sales, excluding automotive, improved 3.1% during the holiday season, which ran from Nov 1 to Dec 24 of this year, from the prior-year comparable period. However, the growth rate has fallen short of Mastercard’s holiday season expectation of a 3.7% increase, revealed in September 2023, as well as the prior-year comparable period’s registered growth of 7.6%.
While revealing their expectation this September, Mastercard management had already stated that consumers were likely to be highly picky and value-focused while spending during the 2023 holiday season amid access to a wide array of choices and a tighter budget constraint. Continued inflationary challenges may have made consumers more cautious about spending while favorable employment rates provided some respite. Personalized promotions of retailers from an early point of this year’s holiday season enabled consumers to get hold of the best deals and promotions.
Delving deeper into the retail trends, E-commerce and in-store sales witnessed year-over-year improvements of 6.3% and 2.2%, respectively, in the holiday season. Online retail sales witnessed a faster growth rate than in-store, attributable to the ease and affordability of online shopping.
As family and friends assembled in restaurants to celebrate the festivities outside of homes, restaurant spending notably climbed 7.8% this holiday season from the prior-year comparable period. It was higher than Mastercard’s growth expectation of 5.4%. Apparel sales rose 2.4% year over year. Additionally, the growth streak for grocery item sales, which are essential in nature, continued with a 2.1% increase during the holidays.
However, it seems that consumers were in no mood to expend considerable funds on electronics and jewelry. As a result, sales of these two categories declined 0.4% and 2%, respectively, from the corresponding year-ago comparable period's figures.
The findings of Mastercard SpendingPulse take into account aggregate sales activity in the tech giant’s payment network. Therefore, expanding U.S. retail sales in the 2023 holiday season implies an increase in the number of transactions being processed in MA’s payment network, thereby fetching higher revenues. Revenues from Mastercard’s payment network are derived from charging fees from customers, who can be issuers, acquirers and other market participants, in return for offering switching and other network-related services. It also charges fees on the gross dollar volume of domestic and cross-border transactions through MA-branded cards. Net revenues worth $11.9 billion were generated from the payment network in the first nine months of 2023, which grew 10.8% from the prior-year comparable period.
Shares of Mastercard have gained 23.6% in the past year compared with the industry’s 22.4% increase. MA currently carries a Zacks Rank #3 (Hold).
The bottom line of Huron Consulting outpaced estimates in each of the last four quarters, the average surprise being 25.69%. The Zacks Consensus Estimate for HURN’s 2023 earnings suggests an improvement of 38.8% from the year-ago reported figure. The consensus mark for revenues suggests growth of 20.5% from the year-ago number. The consensus mark for HURN’s 2023 earnings has moved 5.3% north in the past 60 days.
Parsons’ earnings outpaced estimates in two of the last four quarters, matched the mark once and missed the same in the remaining one occasion, the average surprise being 9.95%. The Zacks Consensus Estimate for PSN’s 2023 earnings suggests an improvement of 31.5% from the year-ago reported figure. The consensus mark for revenues suggests growth of 25.4% from the prior-year reading. The consensus mark for PSN’s 2023 earnings has moved 6.7% north in the past 60 days.
The bottom line of Instructure outpaced estimates in two of the last four quarters, matched the mark once and missed the same in the remaining one occasion, the average surprise being 1.87%. The Zacks Consensus Estimate for INST’s 2023 earnings suggests an improvement of 11.7% from the year-ago reported figure. The same for revenues suggests growth of 11.4% from the year-ago actual. The consensus mark for INST’s 2023 earnings has moved 8.9% north in the past 60 days.
Shares of Huron Consulting, Parsons and Instructure have gained 39.3%, 38.4% and 17.9%, respectively, in the past year.
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Mastercard's (MA) SpendingPulse Reveals '23 Holiday Sales Data
Mastercard Incorporated (MA - Free Report) released preliminary insights about consumer spending trends across different categories this holiday season in its SpendingPulse report. Not adjusted for inflation, Mastercard SpendingPulse measures in-store and online retail sales across all payment types.
According to the latest report, U.S. retail sales, excluding automotive, improved 3.1% during the holiday season, which ran from Nov 1 to Dec 24 of this year, from the prior-year comparable period. However, the growth rate has fallen short of Mastercard’s holiday season expectation of a 3.7% increase, revealed in September 2023, as well as the prior-year comparable period’s registered growth of 7.6%.
While revealing their expectation this September, Mastercard management had already stated that consumers were likely to be highly picky and value-focused while spending during the 2023 holiday season amid access to a wide array of choices and a tighter budget constraint. Continued inflationary challenges may have made consumers more cautious about spending while favorable employment rates provided some respite. Personalized promotions of retailers from an early point of this year’s holiday season enabled consumers to get hold of the best deals and promotions.
Delving deeper into the retail trends, E-commerce and in-store sales witnessed year-over-year improvements of 6.3% and 2.2%, respectively, in the holiday season. Online retail sales witnessed a faster growth rate than in-store, attributable to the ease and affordability of online shopping.
As family and friends assembled in restaurants to celebrate the festivities outside of homes, restaurant spending notably climbed 7.8% this holiday season from the prior-year comparable period. It was higher than Mastercard’s growth expectation of 5.4%. Apparel sales rose 2.4% year over year. Additionally, the growth streak for grocery item sales, which are essential in nature, continued with a 2.1% increase during the holidays.
However, it seems that consumers were in no mood to expend considerable funds on electronics and jewelry. As a result, sales of these two categories declined 0.4% and 2%, respectively, from the corresponding year-ago comparable period's figures.
The findings of Mastercard SpendingPulse take into account aggregate sales activity in the tech giant’s payment network. Therefore, expanding U.S. retail sales in the 2023 holiday season implies an increase in the number of transactions being processed in MA’s payment network, thereby fetching higher revenues. Revenues from Mastercard’s payment network are derived from charging fees from customers, who can be issuers, acquirers and other market participants, in return for offering switching and other network-related services. It also charges fees on the gross dollar volume of domestic and cross-border transactions through MA-branded cards. Net revenues worth $11.9 billion were generated from the payment network in the first nine months of 2023, which grew 10.8% from the prior-year comparable period.
Shares of Mastercard have gained 23.6% in the past year compared with the industry’s 22.4% increase. MA currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the Business Services space are Huron Consulting Group Inc. (HURN - Free Report) , Parsons Corporation (PSN - Free Report) and Instructure Holdings, Inc. (INST - Free Report) . While Huron Consulting currently sports a Zacks Rank #1 (Strong Buy), Parsons and Instructure carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Huron Consulting outpaced estimates in each of the last four quarters, the average surprise being 25.69%. The Zacks Consensus Estimate for HURN’s 2023 earnings suggests an improvement of 38.8% from the year-ago reported figure. The consensus mark for revenues suggests growth of 20.5% from the year-ago number. The consensus mark for HURN’s 2023 earnings has moved 5.3% north in the past 60 days.
Parsons’ earnings outpaced estimates in two of the last four quarters, matched the mark once and missed the same in the remaining one occasion, the average surprise being 9.95%. The Zacks Consensus Estimate for PSN’s 2023 earnings suggests an improvement of 31.5% from the year-ago reported figure. The consensus mark for revenues suggests growth of 25.4% from the prior-year reading. The consensus mark for PSN’s 2023 earnings has moved 6.7% north in the past 60 days.
The bottom line of Instructure outpaced estimates in two of the last four quarters, matched the mark once and missed the same in the remaining one occasion, the average surprise being 1.87%. The Zacks Consensus Estimate for INST’s 2023 earnings suggests an improvement of 11.7% from the year-ago reported figure. The same for revenues suggests growth of 11.4% from the year-ago actual. The consensus mark for INST’s 2023 earnings has moved 8.9% north in the past 60 days.
Shares of Huron Consulting, Parsons and Instructure have gained 39.3%, 38.4% and 17.9%, respectively, in the past year.