Retail Sales Gains in July: ETFs & Stocks to Play

Retail sales in the United States inched up 1% sequentially in July 2024, following a downwardly revised 0.2% drop in June and way better than forecasts of a 0.3% gain. It is the biggest increase since January 2023, with sales at motor vehicle and part dealers rising the most (3.6%), followed by sales at electronics and appliance stores (1.6%).

Barring sales of food services, auto dealers, building materials stores and gasoline stations, sales rose 0.3%, compared to 0.9% in June and forecasts of 0.1%. Below we highlight a few areas and the related ETFs & stocks that may benefit handsomely from the retail sales.

Winning Areas

Electronics & Appliance Stores

Sales gained 1.6% sequentially in July and 5.2% year over year. Rise in electronics sales should boost semiconductor funds and stocks.

VanEck Vectors Semiconductor ETF SMH – The underlying MVIS US Listed Semiconductor 25 Index tracks the overall performance of companies involved in semiconductor production and equipment. The fund charges 35 bps in fees.

Best Buy BBY – As far as stocks are concerned, investors can take a look at BBY. It is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, health, security, appliances and related services. The fund has a Zacks Rank #2 (Buy).

Healthcare & Personal Care Stores

Sales gained 0.8% sequentially in July and 3.4% year over year.

Consumer Staples Select Sector SPDR ETF XLP – The underlying 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 9 bps in fees.

KimberlyClark KMB – Kimberly-Clark Corporation is principally engaged in the manufacture and marketing of a wide range of consumer products around the world. The company sells its products to supermarkets; mass merchandisers; drugstores; warehouse clubs; variety and department stores; retail outlets; manufacturing, lodging, office building, food service, and health care establishments; and high-volume public facilities. The fund has a Zacks Rank #3.

Food & Beverage Stores

Sales gained 0.9% sequentially in July and 2.9% year over year.

Fidelity MSCI Consumer Staples Index ETF FSTA – The underlying MSCI USA IMI Consumer Staples Index represents the performance of the consumer staples sector in the U.S. equity market. The fund charges 8 bps in fees.

Pilgrim's Pride PPC – Pilgrim's Pride Corporation is focusing on strengthening its Prepared Foods category. The category grew in the United States during the fourth quarter of 2019 on continued investments in R&D and sales as well as marketing of new product innovations. Also, the company has been increasing its product mix for organic category, including No-Antibiotics-Ever products, to cater customers' evolving tastes. The fund has a Zacks Rank #1 (Strong Buy).

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