Retail sales in the United States increased 0.9% sequentially in April of 2022, after an upwardly revised 1.4% surge in March and matching market forecasts. The reading showed American consumers continued to spend despite red-hot inflation.
However, it marked the smallest gain in retail trade in four months. Consumer spending makes up about 70% of U.S. economic activity. Thus, any gain in it will likely brighten the economic growth picture. Year-on-year, retail sales increased 8.2%.
Below we highlight a few areas and the related ETFs & stocks that may benefit handsomely.
Winning Areas Non-Store Retailers
Sales of this category rose 2.1% sequentially. Year over year, sales were up 12.7%. Consumers’ interest in buying products online kept the demand high for the segment.
ProShares Online Retail ETF ( ONLN Quick Quote ONLN - Free Report) is a good bet to tap the winning trend of non-store retailers. The underlying ProShares Online Retail Index is a specialized retail index, tracking retailers that principally sell online or through other non-store channels.
For a single-stock selection, Zacks Rank #1 (Strong Buy)
Solo Brands ( DTC Quick Quote DTC - Free Report) appears as a good pick. It is a DTC platform which offers products directly to consumers primarily online through lifestyle brands Solo Stove firepits, stoves, and accessories, Chubbies apparel, Oru Kayak, a folding portable kayak and Isle paddleboards. Miscellaneous Store Retailers
Sales grew 4% sequentially in April and 18.6% year over year. Sales at department store rose 1.1% in April versus 2.9% in March. If job data remains stable, consumers may continue to splurge on activities.
Consumer Discretionary Select Sector SPDR ETF ( XLY Quick Quote 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.
Zacks Rank #1
Dillard's ( DDS Quick Quote DDS - Free Report) is a large departmental store chain featuring fashion apparel and home furnishings. Food Services & Drinking Places
Sales of this category gained 2% sequentially in April and 19.8% year over year.
AdvisorShares Restaurant ETF ( EATZ Quick Quote EATZ - Free Report) is a pureplay restaurant ETF. This ETF is active and does not track a benchmark.
The Zacks Rank #2 (Buy)
Jack in the Box Inc. ( JACK Quick Quote JACK - Free Report) is a restaurant company that operates and franchises through Jack in the Box quick-service restaurants, and is one of the nation’s largest hamburger chains. Motor Vehicle & Parts Dealers
Sales of this category gained 2.2% sequentially in April but fell 1.7% year over year.
First Trust SNetwork Future Vehicles & Technology ETF ( CARZ Quick Quote CARZ - Free Report) follows the S-Network Electric & Future Vehicle Ecosystem Index constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.
The Zacks Rank #3 (Hold)
AutoZone Inc. ( AZO Quick Quote AZO - Free Report) is one of the leading specialty retailers and distributor of automotive replacement parts and accessories in the United States. Clothing
Apparel and accessories sales gained 0.8% sequentially in the month and 8% year over year. Apparel Retail takes about 19.3% of the fund
SPDR S&P Retail ETF ( XRT Quick Quote XRT - Free Report) . The fund is thus well-positioned to benefit from the trend.
Zacks Rank #1
Boot Barn ( BOOT Quick Quote BOOT - Free Report) appears a nice bet here. It operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories.