March Retail Sales Sparkles: Industry ETFs & Stocks to Win
Zacks Investment Research | Apr 16, 2021 02:30AM ET
In March 2021, U.S. retail sales recorded the Sales surged 9.8% sequentially , following a downwardly revised 2.7% decline in the previous month and easily beating market forecasts of a 5.9% increase. The $1,400 checks sent to consumers from mid-March, and improvement in the weather after winter storms in Texas and some other parts of the South region in February led to this gain.
Consumer spending makes up about 70% of U.S. economic activity. Thus, any massive jump in it will likely brighten the economic growth picture. Below we highlight a few areas and the related ETFs that benefited the most.
h3 Clothing/h3Many mall-based clothing stores were closed amid lockdowns last year. So, pent-up demand boosted spending in this segment. Apparel and accessories sales skyrocketed 18.3% sequentially in the month and 101.1% year over year.
Apparel Retail takes about 19.3% of the fund SPDR S&P Retail ETF (XRT . The fund is thus well-positioned to benefit from the trend.
For single-stock selection, Zacks Rank #2 (Buy) Buckle (NYSE:BKE) Inc. SMH ) in a better position.
On the equity front, Zacks Rank #3 (Hold) Systemax Inc. SYX appears a good bet. The company is a direct marketer of brand name and private label products.
h3 Books, Music, Hobby, Gardening & Sporting Goods/h3The segment sporting goods, hobby, musical instrument, & book stores saw a surge in sales by 23.5% sequentially. Moreover, the segment’s sales were 73.5% higher year over year.
Building material & garden equipment & supplies dealerstoo witnessed a sequential sales surge of 12.1% in the month. Year over year, sales shot up 29.4%.
Such trends bode well for all retail and consumer discretionary ETFs like XRT, XLY and RTH. In this regard, investors can place a bet on Central Garden & Pet Co. PEJ , so the fund stands to benefit.
As far as stocks are concerned, investors can bet on Zacks Rank #1 Jack In The Box (NASDAQ:JACK) Inc. (U.S. Inflation Hits More Than 2-Year High: ETFs & Stocks to Win ).
Investors can also bet on Zacks Rank #3 AutoZone Inc. (NYSE:AZO). The company is one of the leading specialty retailers and distributors of automotive replacement parts and accessories in the United States.
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