January Retail Sales: Winning & Losing ETFs & Stocks

Retail sales in the United States rose 0.3% sequentially in January 2020, slightly higher than a downwardly revised 0.2% uptick in December and in line with market expectations. Sales rose 4.4% year over year in the month (see all consumer discretionary ETFs here).

Against this backdrop, we highlight a few ETFs and stocks that should win or lose from the January retail sales report (read: These 4 Sector ETFs Look Attractive in February).

Winners

Online Stores

Online and mail-order retail trade jumped 0.3% sequentially in January from a 0.1% drop in December.

eBay Inc. (NASDAQ:EBAY)

The Zacks Rank #2 (Buy) company is one of the largest online retailers in the world. It belongs to a favorable Zacks industry (placed at the top 45% of 250+ industries).

Amplify Online Retail ETF (IBUY

The underlying EQM Online Retail Index utilizes a rules-based methodology to select a globally diverse group of companies with 70% or more of online and virtual sales. The fund charges 65 bps in fees. Uber (NYSE:UBER) (3.49%), Grubhub (3.30%) and Netflix (NASDAQ:NFLX) (3.12%) are the top three holdings of the fund.

Restaurants

Receipts at restaurants and bars grew 1.2%, almost same as the prior month. On a year-over-year basis, sales at food services & drinking places jumped 8.2% in January.

Invesco Dynamic Leisure and Entertainment ETF PEJ

The underlying Dynamic Leisure & Entertainment Intellidex Index is comprised of stocks of U.S. leisure and entertainment companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors. The fund charges 63 bps in fees (read: 3 Sector ETFs & Stocks to Win on Upbeat January Jobs Data).

Brinker International Inc. (NYSE:EAT)

The Zacks Rank #2 (Buy) company primarily owns, operates, develops and franchises various restaurants under Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s) brands. It comes from a top-ranked Zacks industry (top 30%).

Loser

Apparel

Sales at clothing stores slumped the maximum since 2009 in January. Sales fell 3.1% sequentially in January.

SPDR S&P Retail (NYSE:XRT) ETF XRT

The underlying S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. Apparel Retail takes about one-fourth of the fund. The fund has lost 2.3% in the past month.

American Eagle Outfitters Inc. (NYSE:AEO)

This is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15-25 years. It has a Zacks Rank #4 (Sell).

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