4 ETF Areas & Stocks to Win on June Retail Sales
Retail sales in the United States stalled in June from May 2024, following an upwardly revised 0.3% rise in the previous period. Economists had expected a 0.3% decline in spending, according to Bloomberg data. Meanwhile, retail sales in May were revised higher to an uptick of 0.3%, from a prior reading of 0.1%, according to Census Bureau data.
Sales excluding food services, auto dealers, building materials stores and gasoline stations, which are used to calculate GDP, were up 0.9%, the largest increase since April 2023, following a 0.4% increase. Below we highlight a few areas and the related ETFs & stocks that may benefit handsomely from the retail sales.
Winning Areas
Non-Store Retailers
Sales at non-store retailers rose 8.9% year over year in June 2024. On a sequential basis, sales gained 1.9% in June.
Amplify Online Retail ETF IBUY – The underlying index of the fund utilizes a rule-based methodology to select a globally diversified group of companies with 70% or more sales coming online and virtually. The fund charges 65 bps in fees.
Amazon.com AMZN – Amazon.com is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. The stock has a Zacks Rank #2 (Buy).
Clothing
Sales in this segment increased 4.3% year over year and 0.6% sequentially.
SPDR S&P Retail ETF XRT – The S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The fund, which invests about 20% in clothing stocks, charges 35 bps in fees.
American Eagle Outfitters AEO – The ZacksRank #3 (Hold) company is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15–25 years.
Health & Personal Care Stores
Sales increased 4.3% year over year while sales rose 0.6% sequentially.
Consumer Staples Select Sector SPDR ETF XLP – The Consumer Staples Select Sector Index seeks to provide an effective representation of the consumer staples sector of the S&P 500 Index. The fund charges 10 bps in fees. The fund has a Zacks Rank #3 at present.
Colgate Palmolive CL – The Zacks Rank #2 Colgate-Palmolive Company’s business strategy closely defines efforts to increase its leadership in key product categories through innovation in core businesses, tracking adjacent categories growth and expansion into new markets and channels.
Furniture & Home Furnishing Stores
The segment saw a 0.6% sequential gain in sales, though sales were down 4% year over year.
VanEck Retail ETF RTH – The underlying MVIS US Listed Retail 25 Index tracks the overall performance of companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. The fund houses two top home improvement companies – Home Depot and Lowe’s Corp. Both companies hold about 12% of the fund.
Home Depot HD – The Zacks Rank #3 company is the world’s largest home improvement specialty retailer.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Colgate-Palmolive Company (CL) : Free Stock Analysis Report
Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports
SPDR S&P Retail ETF (XRT): ETF Research Reports
VanEck Retail ETF (RTH): ETF Research Reports
Amplify Online Retail ETF (IBUY): ETF Research Reports