Yesterday before the market opened, Walmart WMT reported solid results for the second quarter of fiscal 2025, beating earnings and revenue forecasts. The mega-retailer raised its fiscal year forecast for the second time this year, spreading optimism about the company’s growth.
This pushed WMT shares to a record high with the highest trading volume since mid-May. Investors looking to take advantage of the favorable moment should consider ETFs that have the largest stake in the world’s largest brick-and-mortar retailers. These include Consumer Staples Select Sector SPDR Fund XLP, Vanguard Consumer Goods ETF VDC, Fidelity MSCI Consumer Staples Index ETF FSTA, VanEck Vectors Retail ETF RTH and iShares Evolved US Discretionary Spending ETF IEDI.
Walmart’s profits in focus
Earnings per share were 67 cents, beating the Zacks Consensus Estimate of 65 cents and improving 9.8% from the year-ago quarter. Revenue rose 4.8% year over year to $169.3 billion, beating the consensus mark of $168.5 billion. Comparable sales in the U.S. rose 4.2%. In particular, e-commerce sales rose 21% globally, led by store pickup and delivery and the marketplace.
The mega-retailer raised its forecast for fiscal 2025. It now expects sales to increase 3.75 to 4.75 percent (compared to the previous forecast of 3 to 4 percent) and earnings per share in the range of $2.35 to $2.43 (compared to the previous forecast of $2.23 to $2.37). For the third quarter of fiscal 2025, Walmart expects sales to increase 3.25 to 4.25 percent and adjusted earnings per share in the range of 51 to 52 cents.
Below we have summarized the ETFs in detail for you:
Consumer Staples Select Sector SPDR Fund (XLP)
The Consumer Staples Select Sector SPDR Fund targets the broad consumer staples space and follows the Consumer Staples Select Sector Index. It holds about 38 securities in its basket, with Walmart coming in third at 10.7%. XLP has the largest allocation to consumer staples distribution and retail at 32.6%, while household products, beverages and groceries each account for a double-digit allocation. The Consumer Staples Select Sector SPDR Fund is the most popular consumer staples ETF, with $16 billion in assets under management and an average daily volume of 10.3 million shares. XLP charges 9 basis points in fees per year and has a Zacks ETF Rank of #3 (Hold) with a medium-risk outlook (read: 5 ETF Strategies to Follow Amid Current Market Turmoil).
Vanguard Consumer Staples ETF (VDC)
The Vanguard Consumer Staples ETF also targets the broad consumer staples sector by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It holds 105 stocks in its basket, with Walmart coming in third with an allocation of 8.8%. The Vanguard Consumer Staples ETF manages an asset base of $7 billion and charges a fee of 10 basis points per year. The VDC trades a good average volume of around 90,000 shares per day and has a Zacks ETF Rank of #3 with a medium risk outlook.
Fidelity MSCI Consumer Staples Index ETF (FSTA)
The Fidelity MSCI Consumer Staples Index ETF offers broad exposure to the consumer staples sector by tracking the MSCI USA IMI Consumer Staples Index and holding 107 stocks in its basket. Of these, Walmart ranks third with an 8.8% share. The Fidelity MSCI Consumer Staples Index ETF has amassed an asset base of $1.1 billion and trades on average a good volume of around 72,000 shares per day. FSTA charges investors an annual fee of 8 basis points and has a Zacks ETF Rank of #3 with a Medium Risk Outlook (see: all consumer staples ETFs here).
VanEck Vectors Retail ETF (RTH)
VanEck Vectors Retail ETF offers exposure to the 26 largest retail companies by tracking the MVIS US Listed Retail 25 Index, which measures the performance of companies engaged in retail distribution, wholesale distribution, online, direct mail and television retailing, multiline retailing, specialty retailing, and grocery and other staples retailing. Walmart ranks third with an 8.3% share. VanEck Vectors Retail ETF has amassed an asset base of $204.2 million and charges an annual fee of 35 basis points. It trades on lower volume of an average of 4,000 shares per day. VanEck Vectors Retail ETF has a Zacks ETF Rank #2 (Buy) with a medium risk outlook.
iShares US Consumer Focused ETF (IEDI)
iShares US Consumer Focused ETF is an actively managed ETF that provides exposure to US companies with a focus on US consumer spending and consumer staples. It holds 201 stocks in its basket, with Walmart coming in fourth place with a 7.1% stake. iShares US Consumer Focused ETF has amassed $21.5 million in its asset base and charges fees of 18 basis points per year. Volume is light for IEDI, as it trades on average 3,000 shares per day.
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Walmart Inc. (WMT): Free Stock Analysis Report
Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports
VanEck Retail ETF (RTH): ETF Research Reports
Vanguard Consumer Staples ETF (VDC): ETF Research Reports
Fidelity MSCI Consumer Staples Index ETF (FSTA): ETF Research Reports
iShares US Consumer Focused ETF (IEDI): ETF Research Reports
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