By Kendall Claar
After being left for dead by investors during the onset of the COVID-19 pandemic in 2020, many mall-based companies listed on the SPDR S&P Retail ETF (XRT) have come back to life. With Black Friday only a week away, the ETF is up 61% year-to-date.
The strong recovery that the ETF has demonstrated this year comes despite the fact that neither Amazon (AMZN), Walmart (WMT), nor Target (TGT) is among its top holdings. In fact, the ETF is made up of roughly equal weightings in more than 100 stocks.
Department stores Dillard’s (DDS) and Macy’s (M), clothing store Abercrombie & Fitch (ANF) and jeweler Signet (SIG), the owner of Jared and Kay, account for some of the larger weightings in the ETF. Stocks for each company have more than doubled over the course of 2021.
Macy’s reported sales and earnings Thursday morning, topping previous forecasts and resulting in a bullish outlook for the rest of the holiday season. In a conference call with analysts, Macy’s chief financial officer Adrian Mitchel said, “The consumer is healthy, and we expect the strong demand to continue, particularly as people return to work.”
With bigger paychecks and greater savings, consumers seem more willing this year to venture out into traditional brick-and-mortar retail stores. However, many retail companies credit digital sales for their strong stock rally this year.