A 12% premarket sell-off in Staples (NasdaqGS: SPLS) on Wednesday was set to rain on the parade in retail exchange traded funds, which have rallied this year.
The office-supplies company reported lower-than-expected quarterly profit and cut its full-year view. “Our first-quarter results show that we’re making good progress on our key growth initiatives and we’re gaining share in North America, but at a cost to our bottom line,” said Ron Sargent, Staples’ chief executive.
Deutsche Bank analysts said Staples shares would be soft Wednesday “on the miss and guide down and questions around its ability to drive profitable sales as the industry leader.”
The stock is a component in the $2.5 billion Consumer Discretionary Select Sector SPDR Fund (NYSEArca: XLY) as well as SPDR S&P Retail ETF (NYSEArca: XRT).
SPDR S&P Retail ETF
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.