Big-Box Retailers Gear Up to Report This Week: ETFs in Focus

Core Viewpoint - The retail sector is under scrutiny as major retailers like Walmart, Home Depot, Lowe's, and Target prepare to report earnings amidst challenges such as tariffs, inflation, and changing consumer habits [1] Retail Sector Overview - Traditional retail ETFs, such as SPDR S&P Retail ETF (XRT) and VanEck Vectors Retail ETF (RTH), have seen gains of approximately 12.7% and 5.9% respectively over the past three months [2] - Retail sales in July rose less than expected, indicating potential strain on household budgets, despite some companies reporting resilient consumer spending [3] - Earnings growth for the retail sector is projected at 12.6% with a revenue growth of 5.6% [5] Company-Specific Insights Walmart - Walmart has an Earnings ESP of +1.26% and a Zacks Rank of 2, with a positive earnings estimate revision of $0.01 for Q2 fiscal 2026 [7] - As the largest retailer, Walmart's earnings are seen as a key indicator of consumer health, particularly in groceries and essentials [8] Home Depot - Home Depot has an Earnings ESP of +0.35% and a Zacks Rank of 3, with no earnings estimate revision in the past 30 days [9] - The company has experienced a softening demand for big-ticket home improvement projects due to housing affordability issues [11] Lowe's - Lowe's has an Earnings ESP of -0.56% and a Zacks Rank of 3, with a negative earnings estimate revision of $0.01 [10] - The company has delivered an average earnings surprise of 3.22% over the last four quarters [10] Target - Target has an Earnings ESP of -3.05% and a Zacks Rank of 3, with a negative earnings estimate revision of a couple of cents [12] - The company is balancing discretionary categories against stable grocery demand, with a focus on cost management and promotional strategies [13] ETF Insights SPDR S&P Retail ETF (XRT) - SPDR S&P Retail ETF tracks the S&P Retail Select Industry Index and holds 76 diversified stocks, with no single stock exceeding a 2% share [14] - The ETF has an asset under management (AUM) of $429.2 million and an average trading volume of 6.1 million shares [15] VanEck Vectors Retail ETF (RTH) - VanEck Vectors Retail ETF tracks the MVIS US Listed Retail 25 Index, focusing on the largest retail firms [16] - The ETF has an AUM of $255.5 million and trades an average of 4,000 shares daily [17]