Editors' pick: Originally published Jan. 21.
The one-two punch of a stock market downturn that's stoking U.S. recession fears and a sub-par holiday shopping season has walloped many retail stocks.
The SPDR S&P Retail ETF (XRT) has nosedived about 14% in the past three months, almost twice the drop in the broader S&P 500. Retailers such as department store Macy's (M) and home goods retailer The Container Store (TCS) have warned in recent weeks of sluggish consumer spending. The dreary news from some of these big-name retailers comes despite a strengthening in the U.S. labor market late in 2015.
Meantime, economic data to support the mass sell-off in retailers has not been too difficult to find.
The government reported that overall retail sales fell 0.1% in December compared to November and were up just 2.2% from December 2014. For the entire year, retail sales only increased 2.1% from 2014, the smallest annual increase since 2009. The National Retail Federation shared that holiday sales in 2015 increased 3% from the previous year to $626 billion, compared to its forecast for 3.7% growth.
But not all retail stocks have been swept into the doom and gloom that has become pervasive in the sector. TheStreet takes a look at three retail stocks that have managed to outperform the S&P 500 in the past three months. Their results indicate that these may be the retailers to own for what could be a choppy consumer spending environment in 2016.