Walmart's Slide Hits Top Consumer Staples ETFs in Differing Ways

The recent Walmart pullback has had a ripple effect on top consumer staples ETFs. Over the past 90 days, Walmart's stock price has fallen by around 14% from $130 to $112. However, when looking at a longer time frame, Walmart's performance is not as bleak, with a year-over-year gain of 9% and a five-year increase of 132%. The company's Q1 FY27 report reaffirmed its guidance rather than raising it, citing a headwind in Health & Wellness due to legislation and tariff uncertainty.

Fidelity MSCI Consumer Staples Index ETF (FSTA) has the heaviest Walmart exposure among the three top consumer staples ETFs, with a 13.4% weight. This is due to its broader mandate, which includes small- and mid-cap stocks in addition to large-cap companies. Despite this high concentration of Walmart stock, FSTA has held up relatively well, with a year-to-date gain of 8.7%. This resilience can be attributed to the offsetting performance of other staples names such as Coca-Cola and Procter & Gamble.

Consumer Staples Select Sector SPDR Fund (XLP) has a narrower index and a lower Walmart weight of 10.4%, making it less susceptible to single-name stock movements. XLP's year-to-date gain is nearly flat, up 9.6%. Vanguard Consumer Staples Index Fund (VDC) also tracks a broad basket of consumer staples names and has a similar Walmart weight of 14.0%.

As the market looks ahead, several key macroeconomic indicators will be crucial in determining the direction of these ETFs. The next Census retail sales release and CPI print are particularly important, as they can signal changes in consumer sentiment and spending habits. Additionally, quarterly reviews for FSTA and VDC, as well as the S&P Dow Jones sector rebalance for XLP, may also impact their performance.