There have been some individual instances of impressive earnings reports and stock performances, but broadly speaking, the retail sector is scuffling and those struggles are reflected by the SPDR S&P Retail ETF (NYSEArca: XRT). XRT, the largest dedicated retail exchange traded fund, has been in a tailspin in the current quarter and some traders see the group’s misery continuing.
Amazon (NasdaqGS: AMZN) and Dow component Wal-Mart (NYSE: WMT) have recently helped XRT’s rival, the VanEck Vectors Retail ETF (NYSEArca: RTH), perform less poorly than XRT. XRT, an equal-weight ETF, has been plagued by slumping apparel retailers, among other corners of the flailing retail industry.
RTH covers the 25 largest U.S. companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers.
XRT slumped last week, marking the ETF’s fifth straight weekly loss.
“Consumer spending increased only at a 1.9 percent rate during the first quarter, leaving many retailers struggling to maintain sales leading into earnings season. Numbers improved in April as consumer spending rose to its highest in a year, but the boost was mostly fueled by online retailers instead of the traditional big names. Amazon is currently the ETF’s biggest holding,” reports CNBC.
The internet retail sub-industry revealed the highest earnings growth at 143.1% for all 13 retail sub-industries, John Butters, Senior Earnings Analyst at FactSet, said in a note.