4 ETF Areas to Win Amid Slowing Retail Sales in May
Consumer spending declined notably in May. Retail sales fell by 0.9%, exceeding the expected 0.6% drop projected by Dow Jones economists, as quoted on CNBC. This decline follows a modest 0.1% dip in April and came amid heightened uncertainty regarding economic conditions and trade tensions.
When excluding auto sales, retail figures still disappointed with a 0.3% decline, compared to the anticipated 0.1% increase. However, a more focused measure, which strips out volatile categories like autos, gas, and building materials, showed a 0.4% gain. This metric is closely watched by economists because it feeds into GDP calculations.
Spending peaked in March as consumers rushed to make purchases ahead of anticipated tariff enactments from President Donald Trump's April 'liberation day' announcement. But by May, shoppers grew cautious, especially with big-ticket items.
Below we highlight a few areas and the related ETFs & stocks that may benefit handsomely from the retail sales.
Nonstore retailers (e.g., online sales) saw a 0.9% sequential increase and 8.3% yearly gain.
ProShares Online Retail ETF ONLN –The ProShares Online Retail Index is a specialized retail index that tracks retailers principally selling online or through other non-store channels. The fund charges 58 bps in fees.
Amazon.com AMZN – Amazon.com is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. The fund has a Zacks Rank #3 (Hold).
Sales gained 0.8% sequentially in May and 3.7% year over year.
SPDR S&P Retail ETF XRT – The fund gives exposure to US retail stocks. Apparel retail takes about 21% of the fund. The fund charges 35 bps in fees.
Urban Outfitters URBN – The Zacks Rank #1 company is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gifts products.
Sales for Miscellaneous Store Retailers rose 2.9% sequentially and 7.5% year over year.
VanEck Retail ETF RTH – The underlying 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. The fund charges 35 bps in fees.
Five Below FIVE – The Zacks Rank #2 company is a specialty value chain retailer that provides a wide range of premium quality and trendy merchandise for $5 or below. The company mainly targets teenagers or pre-teen shoppers for its products which include certain brands and licensed merchandise.
Sales for Furniture & Home Furnishing Stores increased 1.2% sequentially and 8.8% year over year.
iShares U.S. Consumer Focused ETF IEDI – The fund gives exposure to U.S. companies with a focus on U.S. consumer spending and consumer goods. The fund charges 18 bps in fees.
Home Depot HD – The Zacks Rank #3 company is the world's largest home improvement specialty retailer.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
Five Below, Inc. (FIVE) : Free Stock Analysis Report
SPDR S&P Retail ETF (XRT): ETF Research Reports
VanEck Retail ETF (RTH): ETF Research Reports
iShares U.S. Consumer Focused ETF (IEDI): ETF Research Reports
ProShares Online Retail ETF (ONLN): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
17 minutes ago
- Yahoo
CoreCivic would make $4.2M a month running ICE detention center in Leavenworth
KANSAS CITY, Mo. — The federal government has signed a deal with the private prison firm CoreCivic Corp. to reopen a 1,033-bed prison in Leavenworth, Kansas, as part of a surge of contracts from U.S. Immigration and Customs Enforcement (ICE). CoreCivic officials said ICE's letter contracts provide initial funding to begin reopening facilities while the company negotiates a longer-term deal. The Leavenworth deal is worth $4.2 million a month to the company, it disclosed in a court filing. ICE is using no-bid contracts, boosting big firms, to get more detention beds The City of Leavenworth has filed two lawsuits against CoreCivic. The first was filed in March, and another lawsuit was filed in May after a judge threw out the initial lawsuit. The city is accusing the corporation of trying to reopen the facility without acquiring the necessary permit from the city. CoreCivic claims that its contract with ICE allows it to bypass Leavenworth law. 'In other words, CoreCivic refuses to comply with the city's permitting process because, it contends, it will take too long to do so,' the city argues in its latest lawsuit. City of Leavenworth files new lawsuit against CoreCivic after judge throws out previous suit On June 4, court records show that a district judge sided with Leavenworth and issued a temporary restraining order against CoreCivic – preventing the corporation from reopening the shuttered Leavenworth facility until it receives a special use permit. Despite CoreCivic signing a contract with ICE, Leavenworth County Manager Scott Peterson said the temporary injunction is still in place. CoreCivic previously housed inmates at the detention center up until 2021. During that time, it was embroiled in several scandals – with U.S. District Court Judge Julie A. Robinson describing the facility as 'an absolute hell hole.' CoreCivic has been accused of rampant abuse, violence, as well as violating the constitutional rights of its detainees and staff, according to the lawsuit. Not only is CoreCivic expected to make more than $4 million per month – if its able to reopen its detention center in Leavenworth – it also has direct political ties to several GOP candidates. ICE has cited a 'compelling urgency' for thousands more detention beds, and its efforts have sent profit estimates soaring for politically connected private companies, including CoreCivic, based in the Nashville, Tennessee, area and another giant firm, The Geo Group Inc., headquartered in southern Florida. CoreCivic, along with Geo, donated millions of dollars to largely GOP candidates at all levels of government and national political groups, the Associated Press reported. For more background information on CoreCivic and the Leavenworth lawsuit, click here. You can read the Associated Press' full report here. The Associated Press contributed to this report. Judge blocks private prison operator from housing ICE detainees at shuttered Kansas center City of Leavenworth files new lawsuit against CoreCivic after judge throws out previous suit Judge throws out suit against CoreCivic's proposed ICE detention center Former Leavenworth Detention Center worker recounts brutal attack City of Leavenworth files lawsuit against CoreCivic for attempting to open ICE facility without permit Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
17 minutes ago
- Yahoo
New Chick-Fil-A, Betty Rae's coming to Kansas City metro
KANSAS CITY, Mo. — A new Chick-fil-A and Betty Rae's are coming to the Kansas City metro. Metro North Crossing announced that a new Chick-fil-A is coming soon to the site of the former Metro North Mall at the intersection of U.S. Highway 169 and Barry Road. CoreCivic would make $4.2M a month running ICE detention center in Leavenworth Franchisees Amy and Andy Gallawa are expanding in the Northland with the new location. The Gallawa family already owns the location at Interstate 29 and Barry Road. The Metro North Crossing Chick-fil-A will include a dual drive-thru with a new store format design at the corner of Barry Road and Wyandotte, adjacent to Dutch Bros. Coffee. A late 2025 opening is anticipated. Betty Rae's will be opening a new location in Lee's Summit, Missouri, the ice cream shop announced. The new Betty Rae's is set to open in the Raintree area of Lee's Summit. This will be its first location in a grocery store, Cosentino's Price Chopper at 251 SW Greenwich Dr. The new location will be a full-service ice cream store within the Price Chopper. It will replace the Starbucks formerly in the store. A walk-up window will be added for customers to easily order from the outside. 'Cosentino Food Stores has served the people of Greater Kansas City and surrounding areas for 77 years and is excited to partner with another Kansas City, locally owned and operated staple, Betty Rae's, at our Raintree Price Chopper location,' said Chad Weinzerl, Cosentino's Food Stores. The new location will join the Betty Rae's Ice Cream stores in Waldo, the River Market, Olathe, Prairie Village, Overland Park and its test kitchen location in Merriam. A hiring fair is planned at the new location on Saturday, June 19, from noon to 2 p.m. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
18 minutes ago
- Yahoo
Lee's Summit IHOP workers say weeks have gone by without pay
LEE'S SUMMIT, Mo. — Workers at a Lee's Summit IHOP claim they haven't been paid in over a month. 'I don't know how to explain to a nine-year-old that I work at a job, but I'm not getting paid,' Chelsea Stoker shared with FOX4. 'I want to give them what they want, but I can't because I don't have money to do so.' Stoker is one of two dozen who work at the café located off 291 Highway. New Chick-Fil-A, Betty Rae's coming to Kansas City metro 'No one in the building is getting paid. The cooks. The managers, nobody,' server, Linda, said. 'We haven't been paid, and we are on our 6th week with no pay now.'The shop is also without working air conditioning, workers say. 'The two people that run this restaurant, it's not on them whatsoever. It's above them. They can't get answers either,' Linda added.'It's hotter than hell in there,' Linda Turney, a customer Thursday shared with FOX4. 'They are all working hard. They deserve the money. I hope they get it.' Fred Kelly, another customer eating at the shop, said, 'It's definitely a lot warmer in there than it used to be.'Workers say they've taken their wage concerns to the Department of Labor.'We just keep showing up, praying it's going to change, and praying that we are going to have air conditioning. We all like working with each other, kind of family-oriented, you know?' Linda added. Linda also believes it's not just her shop, but all shops this person(s) own in the Metro, who are experiencing the same issue. How you can help food pantries in the Kansas City area Business records show, this particular IHOP, and others in the metro, are associated with several names, including 'IHOP Restaurants LLC'. Linda says cash tips can be taken home, but it's the hourly wages, many are still waiting on. FOX4 reached out to several contacts who appear to be associated with this business, but we have not received a response to our inquiry. The Missouri Department of Labor was closed for the holiday, Thursday, so we were unable to ask the department questions about these concerns. IHOP's corporate team shared with FOX4, 'We have passed this along to the owner and operator of this restaurant.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
