ETF Areas & Stocks to Win on Upbeat July Retail Sales

Investing

Published: August 16, 2023 11:09 pm

Last Updated: August 17, 2023 12:02 pm

Retail sales in the United States gained 0.7% sequentially in July of 2023, marking a fourth successive rise, and beating market forecasts of a 0.4% increase, per trading economics. It followed an upwardly revised 0.3% gain in June, indicating consumer resilience despite high inflation and interest rates. Sales in July likely got a boost from Amazon’s Prime Day.

Below we highlight a few areas and the related ETFs that may benefit handsomely.

Non-Store Retailers

Sales at non-store retailers rose 10.3% year over year in July. Sequentially, sales are up 1.9%.

ProShares Online Retail ETF ONLN tracks the ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels.

The Zacks Rank #2 (Buy) Booking Holdings BKNG has agreements with hotels, airlines companies, cruise ships, transport companies and vacation providers, which enable it to accept bookings on their behalf. Information on these offerings and customer reviews are available on the company’s owned or operated websites, thus helping customers take informed decisions.

Food Services and Drinking Places

Sales at restaurants and bars increased 11.9% year over year and 1.4% sequentially.

AdvisorShares Restaurant ETF EATZ – 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 – McDonald’s is a leading fast-food chain that currently operates more than 39,000 restaurants in more than 100 countries. The stock has a Zacks Rank #2.

Health & Personal Care Stores

Sales in this segment increased 8.1% year over year and 0.7% sequentially.

Global X Funds Global X Health (BFIT) – The underlying Indxx Global Health & Wellness Thematic Index tracks the performance of companies listed in developed markets that provide products and services aimed at promoting physical wellness through active and healthy lifestyles, including but not limited to fitness equipment and technology, athletic apparel, nutritional supplements, and organic/ natural food offerings. The fund charges 50 bps in fees.

Unilever (UL) – Unilever is engaged in manufacturing of branded and packaged consumer goods, including food, detergents and personal care products. The company also has interests in specialty chemicals. The stock has a Zacks Rank #2.

Clothing

Sales in this segment increased 2.2% year over year and 1.0% 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 charges 35 bps in fees.

American Eagle Outfitters (AEO) – The Zacks Rank #2 company is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15–25 years.

General Merchandise & Grocery Stores

Sales in grocery stores increased 2.3% year over year and 0.8% sequentially. General merchandise stores also see a year-over-year sales increase of 2.5% while sales in this category rose 0.8% month over month.

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 #2.

Walmart (WMT) – The Zacks Rank #2 company has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player.
Unilever PLC (UL): Free Stock Analysis Report

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