Retail stock investors having a tough year

May retail sales rose 1.2 percent, roughly in line with expectations. Auto sales were especially strong, up 2 percent. But the rebound was bigger than that.

May retail sales

  • Building/garden: up 2.1%
  • Clothing stores: up 1.5%
  • Online stores: up 1.4%
  • Dept. stores: up 0.8%
  • Furniture: up 0.8%

It looks like the consumer is a bit stronger, certainly stronger than in April.

"Core" retail sales (excluding autos, gas, building materials and food services) were up 0.7 percent, better than an expected increase of 0.5 percent. The prior month was revised upward as well, to 0.1 percent.

This suggests second quarter GDP numbers will be revised upward.

While this is good news, retail sales year-over-year are up only 2.7 percent. That's a respectable but not great improvement.

Despite the concern about the poor first quarter, retail stocks have outperformed the overall market. TheSPDR S&P Retail ETF, a basket of retailers, up 3.3 percent year-to-date, is handily outperforming the S&P 500, which is up 2.2 percent.

But the gains are selective. This has been a very uneven year for retail. Macy's has done okay, but many big department stores, apparel companies and luxury retailers have had a terrible year and are well into correction territory:

Department stores YTD

Luxury retailers YTD

Apparel YTD

What has done well in 2015? Shoe companies like Steve Madden, Skechers and Foot Locker and auto parts like AutoZone, O'Reilly and Pep Boys. And anything related to home improvement is doing well.

Home improvement YTD

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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