The performance of the consumer staples sector has generally been weak over the past year, in terms of earnings and revenue growth. Amid the sluggish macro-economic environment, many companies in the consumer staples sector had to resort to tougher cost-control initiatives, inorganic growth and share buybacks.
This didn’t have much a negative bearing on their stock price performance at all, with the consumer staples stocks outperforming the S&P 500 index in the trailing 12 weeks. This performance momentum has continued into 2015, with the sector among the top performers in the admittedly short year-to-date period.
The perceived defensiveness of the sector likely was the biggest driver of this outperformance, which likely will get a lift from the improving economy and the positive impact of lower fuel costs on household disposable income.