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ETFs & Stocks to Win Despite a Soft December Retail Sales
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Retail sales in the United States fell 1.1% sequentially in December 2022, following an upwardly revised 1% decline in November and worse than forecasts of a 0.8% fall. Year-over-year, retail sales grew 9.2%. Consumer spending makes up about 70% of U.S. economic activity. Thus, any gain/loss in it will likely brighten/hamper the economic growth picture.
Below we highlight a few areas and the related ETFs & stocks that may benefit handsomely.
Winning Areas
Non-Store Retailers
Sales at non-store retailers rose 13.7% year over year in December following an increase of 9.7% in November. Online sales rose 3.5% year over year to $211.7 billion during the period between Nov 1 and Dec 31, last year according to data released by Adobe Analytics. The five days between Thanksgiving and Cyber Monday were the major driver, providing a boost to sales (read: Online Holiday Sales Hit Record High: 5 ETFs to Tap).
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.
The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business. The fund charges 99 bps in fees.
McDonald’s is a leading fast-food chain that currently operates more than 39,000 restaurants in more than 100 countries. The fund has a Zacks Rank #2.
Food & Beverage Stores
Food & Beverage stores’ sales gained 6.9% year over year in the month versus 7.6% increase in November.
VanEck Retail ETF (RTH - Free Report) has considerable focus on Walmart. The fund follows the 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.
Zacks Rank #2 The Kroger Co. (KR - Free Report) operates in the thin-margin grocery industry.
Sporting Goods, Hobby, Musical Instrument, & Book Stores
Sporting goods, hobby, musical instrument, & book stores sales gained 3.9% year over year in the month versus 0.9% increase in November.
Sales at Sporting Goods, Hobby, Musical Instrument, & Book Stores gained 3.9% year over year.
Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) thus looks to be a great pick. The underlying Consumer Discretionary Select Sector Index of the fund seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index.
Coming to stocks, DICK'S Sporting Goods Inc. (DKS - Free Report) , with a Zacks Rank #2, operates as a major omni-channel sporting goods retailer, offering athletic shoes, apparel, accessories and a broad selection of outdoor and athletic equipment for team sports, fitness, camping, fishing, tennis, golf, water sports, etc.
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ETFs & Stocks to Win Despite a Soft December Retail Sales
Retail sales in the United States fell 1.1% sequentially in December 2022, following an upwardly revised 1% decline in November and worse than forecasts of a 0.8% fall. Year-over-year, retail sales grew 9.2%. Consumer spending makes up about 70% of U.S. economic activity. Thus, any gain/loss in it will likely brighten/hamper the economic growth picture.
Below we highlight a few areas and the related ETFs & stocks that may benefit handsomely.
Winning Areas
Non-Store Retailers
Sales at non-store retailers rose 13.7% year over year in December following an increase of 9.7% in November. Online sales rose 3.5% year over year to $211.7 billion during the period between Nov 1 and Dec 31, last year according to data released by Adobe Analytics. The five days between Thanksgiving and Cyber Monday were the major driver, providing a boost to sales (read: Online Holiday Sales Hit Record High: 5 ETFs to Tap).
Amplify Online Retail ETF (IBUY - Free Report)
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.
PetMed Express Inc. (PETS - Free Report)
America's largest pet pharmacy operates through its toll-free number and on the Internet. The stock has a Zacks Rank #3 (Hold).
Food and Drink Places
Sales at restaurants and bars increased 12% year over year versus 12.9% gains in last month. This positions the following fund and stock better.
AdvisorShares Restaurant ETF (EATZ - Free Report)
The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business. The fund charges 99 bps in fees.
McDonald's (MCD - Free Report)
McDonald’s is a leading fast-food chain that currently operates more than 39,000 restaurants in more than 100 countries. The fund has a Zacks Rank #2.
Food & Beverage Stores
Food & Beverage stores’ sales gained 6.9% year over year in the month versus 7.6% increase in November.
VanEck Retail ETF (RTH - Free Report) has considerable focus on Walmart. The fund follows the 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.
Zacks Rank #2 The Kroger Co. (KR - Free Report) operates in the thin-margin grocery industry.
Sporting Goods, Hobby, Musical Instrument, & Book Stores
Sporting goods, hobby, musical instrument, & book stores sales gained 3.9% year over year in the month versus 0.9% increase in November.
Sales at Sporting Goods, Hobby, Musical Instrument, & Book Stores gained 3.9% year over year.
Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) thus looks to be a great pick. The underlying Consumer Discretionary Select Sector Index of the fund seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index.
Coming to stocks, DICK'S Sporting Goods Inc. (DKS - Free Report) , with a Zacks Rank #2, operates as a major omni-channel sporting goods retailer, offering athletic shoes, apparel, accessories and a broad selection of outdoor and athletic equipment for team sports, fitness, camping, fishing, tennis, golf, water sports, etc.