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5 ETFs & Stocks: Silver Lining in Soft May Retail Sales

June 15, 2017
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After witnessing decent growth in January, a decline in February, a moderation in March, a lukewarm improvement in April, U.S. retail sales again dropped 0.3% sequentially in May. This followed a 0.4% increase in April but fell shy of market expectations of 0.1% advancement. It also recorded the largest decline in 16 months (read: Q1 Earnings Fail to Revitalize Retail ETFs ).

Retail ETF SPDRÂ S&P Retail ETFXRT) lost 0.2% on June 14, 2017. We would like to note that there are several corners that can still be of investors’ interest. After all, in May, four out of 13 key categories registered expansion in retail sales and two saw unchanged growth.

Below we recommend a few ETFs & stocks to make the most of U.S. retail sales, even in an environment of declining sales growth.

Food and Beverage Stores

Retail sales for food and beverage stores grew 0.1% in May after 0.2% growth in April.

PowerShares Dynamic Food & Beverage Portfolio PBJ

The underlying index of the fund comprises stocks of 30 U.S. food and beverage companies. No stock accounts for more than 5.16% of the fund. It charges 58 bps in fees (see all Consumer Discretionary ETFs here).

Whole Foods Market Inc. WFM

The Zacks Rank #3 (Hold) company owns and operates the largest chain of natural food supermarkets in the U.S. The Zacks Industry Rank is in the top 15%.

Non-Store Retailers

Sales at non-store retailers rose 0.8% following a 0.9% rise in May.

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 of revenue from online and virtual sales. The fund charges 65 bps in fees.

Bridgeline Digital Inc. BLIN

This Zacks Rank #2 company is a digital engagement company. The company’s Bridgeline’s iAPPS platform integrates Web Content Management, e-commerce, e-marketing, social media management and Web Analytics. The Zacks Industry Rank is in the top 22%.

Health & Personal Care

Health and personal care stores remained flat in May with 0.8% growth in April.

The Health and Fitness ETF FITS

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.

Herbalife LTD. HLF

The Zacks Rank #1 (Strong Buy) is a global network marketing company offering a range of weight management products, nutritional supplements and personal care products. The Zacks Industry Rank is in the top 30%.

Building Material Stores

Retail sales for building material stores were flat in May from 0.6% growth in April.

iShares Edge MSCI Multifactor Materials MATF

The fund measures the performance of U.S. large- and mid-cap stocks in the materials sector that have ‘favorable exposure to target style factors ‘ (read: Material ETFs Rise on Solid Q1 Earnings ).

Tile Shop Holdings Inc. TTS

Tile Shop Holdings is the parent company of The Tile Shop. The Tile Shop is a specialty retailer of manufactured and natural stone tiles, setting and maintenance materials, and related accessories in the U.S.The Zacks Industry Rank is in the top 43%. The stock has a Zacks Rank #3.

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Bridgeline Digital, Inc. (BLIN): Free Stock Analysis Report

Tile Shop Hldgs, Inc. (TTS): Free Stock Analysis Report

AMPL-ONLN RETL (IBUY): ETF Research Reports

PWRSH-DYN FD&BV (PBJ): ETF Research Reports

HEALTH&FITNESS (FITS): ETF Research Reports

ISHRS-EMS M MAT (MATF): ETF Research Reports

Herbalife LTD. (HLF): Free Stock Analysis Report

Whole Foods Market, Inc. (WFM): Free Stock Analysis Report

SPDR-SP RET ETF (XRT): ETF Research Reports

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Zacks Investment Research

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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