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Retail sales disappointed in June with a 0.2% month-over-month gain falling short of the consensus estimate for a 0.5% increase. Core retail sales were up 0.2% month-over-month vs. +0.3% consensus. Retail sales were up just 0.5% year-over-year after factoring out the impact of gas and auto. However, the report marked the third in the row to show positive growth as the retail sector does its part to keep the U.S. economy out of a recession for now.
Categories that showed notable biggest year-over-year increases were health & personal stores (+6.5%) and the nonstore retailers category (+9.4%) that includes online sellers such as Amazon (AMZN), Etsy (ETSY), and Wayfair (W). The furniture/home furnishings (-4.6%) and building materials and garden equipment (-3.2%) categories lagged during the month in a trend to watch for companies such as Home Depot (HD), Lowe’s (LOW), La-Z-Boy (LZB), Ethan Allen Interiors (ETD), Sleep Number (SNBR), Williams-Sonoma (WSM), Best Buy (BBY), and Whirlpool (WHR). The restaurants category was up 0.1% month-over-month and 8.4% higher compared to a year ago as consumers continue to absorb higher menu pricing.
Walmart (WMT) fell 0.15% after the retail sales print, while Target (TGT) rose 0.48%. McDonald’s (MCD) traded flat. The retail catch-all SPDR S&P Retail ETF (NYSEARCA:XRT) was down 0.33%.
Looking ahead, the July report on retail sales will include the Amazon Prime Day haul and matching sales promotions across the sector.
