After witnessing decent growth in January, a decline in February, moderation in March, lukewarm improvement in April, and a 0.1% decline in May, U.S. retail sales again dropped 0.2% sequentially in June. This is shy of 0.1% advancement expected by the market (read: Q1 Earnings Fail to Revitalize Retail ETFs).
Barring automobiles, gasoline, building materials and food services, retail sales dropped 0.1% after remaining unchanged in May, as per tradingeconomics. Retail sales saw an increase of 2.8% on a year-over-year basis.
Six out of 13 major retail categories have underperformed lately. Miscellaneous store retailers, gasoline stations, food services and drinking places, sporting goods and hobby, stores, food and beverages stores and clothing stores are some of the areas that were hit hard in the month. Retail ETF SPDRÂ S&P Retail ETF (XRT - Free Report) lost about 0.1% on July 14, 2017 (read: Retail ETFs Tumble on Macy's Profit Warning).
However, we would like to note that there are several corners that can still be of investors’ interest. After all, in May, seven out of 13 key categories registered expansion in retail sales.
Below we recommend a few ETFs & stocks to make the most of U.S. retail sales, even in an environment of declining sales growth (read: Target Relieves Some Pain of Retail ETFs).
Sales at non-store retailers rose 0.4% following a 0.8% rise in June.
PetMed Express Inc. (PETS - Free Report)
America's largest pet pharmacy operates through its toll-free number and on the Internet. Value-Growth-Momentum (VGM) score is ‘C.’
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.
Health & Personal Care
Health and personal care stores gained 0.3% in June with 0.2% growth in May.
Vitamin Shoppe Inc. (VSI - Free Report)
The company is a specialty retailer and direct marketer of nutritional products. VGM score of the stock is “A.”
The Health and Fitness ETF
The fund tracks the performance of companies globally that are positioned to profit from servicing those participating in health and fitness activities. It is likely to cash in on the growing health consciousness among consumers (read: 5 ETFs & Stocks: Silver Lining in Soft May Retail Sales).
Motor Vehicle and Parts Dealers
Sales from motor vehicle and parts dealers grew 0.1% from 1% in June.
CarMax Inc. (KMX - Free Report)
The company operates as a retailer of used cars. It sells vehicles through on-site wholesale auctions, as well as sells new vehicles under franchise agreements. VGM score of the stock is “C.”
First Trust NASDAQ Global Auto ETF (CARZ - Free Report)
The underlying index of the fund – NASDAQ OMX Global Auto Index – is designed to track the performance of the largest and most liquid companies engaged in the manufacturing of automobiles. The fund charges 70 bps in fees.
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