Retail ETFs in Focus Ahead of Big-Box Q3 Earnings

Core Viewpoint - The retail sector is experiencing significant attention as major retailers prepare to report their earnings, with expectations of strong growth in both earnings and revenues [1][2]. Earnings Performance - 23 out of 34 retailers in the S&P 500 Index have reported earnings, showing a 17.3% increase compared to the same period last year, driven by a 6.3% rise in revenues [2]. - The retail sector is projected to achieve an overall earnings growth of 18% alongside a revenue growth of 6.3% [2]. - Traditional retail ETFs, such as SPDR S&P Retail ETF (XRT) and VanEck Vectors Retail ETF (RTH), have both gained nearly 5% over the past month [2]. Individual Retailer Insights - Home Depot has an Earnings ESP of +4.09% and a Zacks Rank of 2, with a positive earnings estimate revision of $0.01 for the upcoming quarter [5]. - Lowe's has an Earnings ESP of +2.00% and a Zacks Rank of 3, with no revisions in earnings estimates over the past 30 days [6]. - Wal-Mart has an Earnings ESP of +1.61% and a Zacks Rank of 2, with an average earnings surprise of 6.89% over the last four quarters [7]. - Target has an Earnings ESP of +0.73% and a Zacks Rank of 2, with a notable earnings surprise of 20.26% in the last four quarters [8]. - Nordstrom has an Earnings ESP of 0.00% and a Zacks Rank of 3, with a negative earnings surprise of 17.82% on average over the past four quarters [9]. - Kohl's has an Earnings ESP of -2.07% and a Zacks Rank of 2, with a significant negative average earnings surprise of 145.30% in the last four quarters [10]. ETF Overview - SPDR S&P Retail ETF (XRT) tracks the S&P Retail Select Industry Index, holding 78 diversified stocks with no single stock exceeding 2.3% of the total [11]. - SPDR S&P Retail ETF has an asset under management (AUM) of$ 382.5 million and an average trading volume of 4 million shares, with an annual fee of 35 basis points [12]. - VanEck Vectors Retail ETF (RTH) tracks the MVIS US Listed Retail 25 Index, focusing on the largest retail firms, with nearly 21% exposure to the top firm [13]. - VanEck Vectors Retail ETF has an AUM of $228.5 million and trades at an average volume of 2,000 shares per day, also charging 35 basis points in annual fees [14].