If your measure of the S&P 500 retail is amazon.com (AMZN), are missing all the action. Many lesser-known retailers are having a banner year.
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Shares of 12 stocks in SPDR S&P Retail ETF (XRT), including department stores dillard’s (dds), fuel seller United States (MUSE) and seller of women’s clothing Chico’s FAS (CHS), are up more than 10% this year, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and marketsmith. What about Amazon shares? They are down almost 41%, crushing hundreds of billions of dollars in market value.
Talk about a reversal of roles, and one worth noting ahead of a busy week for retailers to report their quarterly earnings. For years, Amazon.com shares soared while shares of most other retailers flopped at best. But the roles changed this year. The “Death By Amazon” index, which tracks the performance of retailers competing with Amazon, outperformed Amazon this year, says Bespoke Investment Group, creator of the index. But some retailers’ stocks are doing even better.
“It’s an interesting question whether the Death By Amazon… (index) is being punished along with Amazon rather than benefiting from the e-commerce giant’s share price woes,” Bespoke said.
Evaluating retailers in the S&P 500 and beyond
Finding winning retailers is not easy. Only 12% of the 97 stocks in the SPDR S&P Retail ETF have risen 10% or more this year. It’s a tough environment for retail stocks in general.
Uncertainty in Christmas shopping prospects is cushion spending plans. Inflationary pressure also hurts. Also, fears that a recession is coming or already here are not helping either. The SPDR S&P Retail ETF is down 28.3% this year, below the nearly 17% drop in the S&P 500.
And Amazon is one of the ugliest on the index. The stock is not only plunging this year, but analysts believe the online retail giant will post a loss this year of 8 cents per share this fiscal year. Last fiscal year it earned $3.24 per share. Rivals to the big brick-and-mortar stores are doing better, but not very well. Actions of walmart (WMT) are down more than 4% this year. And Walmart’s profit this fiscal year is expected to fall nearly 10%.
So who are the winning retailers?
Are department stores not dead?
Online retail has gotten so much attention that no one noticed that grandma still goes to the mall. Shares of Little Rock, Ark.-based Dillard’s, an old-school department store with an online presence, have seen their shares soar more than 47% this year to 361.66.
And it’s not just a speculative play. Analysts believe Dillard’s earnings this fiscal year will rise more than 6%. And that’s after a powerful earnings boom in 2022, when it reversed the previous year’s loss.
Some high performing retailers are easier to understand. With gasoline prices on the rise, it’s no surprise to see Murphy USA stock up more than 45% this year. The company, which also runs convenience stores at gas stations, is expected to post adjusted earnings-per-share growth of more than 80% this year.
And then there’s Chico’s FAS, a Florida-based fashion retail chain known for its clothing for middle-aged women. Wall Street must have rediscovered the look, driving shares up more than 25% this year. Unlike Amazon.com, which is drowning in red ink, Chico’s is on track to earn 85 cents a share this fiscal year, more than double its earnings in 2022.
If anything, 2022 proved to S&P 500 investors that there is more to retail than just Amazon.
Better than Amazon?
Top Retail Stocks This Year in SPDR Retail ETF
| Name | Heart | Retail Type | Shares to date % var. |
|---|---|---|---|
| dillard’s | (dds) | Department store | 47.6% |
| United States | (MUSE) | automotive retailer | 45.2 |
| Chico’s FAS | (CHS) | retail clothing | 25.8 |
| Casey’s General Stores | (COMFORTABLE) | Food retail | 18.9 |
| Penske Automotive Group | (P) | automotive retailer | 18.4 |
| caleres | (CALIFORNIA) | retail clothing | 17.2 |
| dollar tree | (DLTR) | Other | 17.1 |
| O’Reilly Automotive | (ORLY) | automotive retailer | 16.8 |
| automatic zone | (AZO) | automotive retailer | 16.7 |
| PAO | (PAO) | Specialized stores | 15.6 |
| BJ Wholesale Club | (B.J.) | Hypermarkets and Super Centers | 13.7 |
| Sprouts Farmers Market | (OFS) | Food retail | 13.3 |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
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