The S&P 500 Consumer Staples Index recorded a negative return of 3.8% in the month of May but still performed better than the wider S&P 500 Index that saw a negative return of 6.4%, according to data compiled by S&P Global Market Intelligence.
Only six of the 33 consumer staples companies in the S&P 500 index recorded positive returns during the month, with Covergirl parent Coty Inc. achieving a positive return of 14% as it moves ahead with its $1.75 billion stake sale with Luxembourg-based investment firm JAB Holding Co. SARL.
Coty was the second-best performing stock in the S&P 500 in May and first in the consumer staples segment.
Chocolatier The Hershey Co. ranked second among other companies in the sector with a 6.3% return following first-quarter results that were well above analysts' estimates. The increase in the company's net sales in the U.S. and Canada offset declines in its international operations.
Monster Beverage Corp. also fared well in May, recording a 3.8% positive return. Shares of the California-based energy-drink maker surged as much as 8% at the start of the month when it released its first-quarter earnings, reporting a 21% year-over-year increase in net income and a 26.7% increase in diluted EPS.
Meanwhile, Constellation Brands Inc. crashed the hardest in the consumer staples sector with a 16.3% negative return following the Trump administration's plan to slap a 5% tariff on Mexican imports to the U.S. starting June 10. Shares of the Corona and Modelo beer brewer plunged as much as 8.55% on May 31 following the White House's announcement.
According to the alcoholic beverage company's site, it operates two breweries and one glass plant in Mexico, where it brews and bottles its flagship Corona brand and other products. A 5% tariff on its imports to the U.S. could come as a blow to the New York-based company as it already faces an up to 6% increase in glass and labor costs in Mexico, in addition to an anticipated rise in transport costs.
The Kraft Heinz Co. was also among the weakest performers with a 15.6% negative return. It came after the company admitted to overstating its EPS and net income figures for the fiscal years ended Dec. 31, 2016, and Dec. 30, 2017, by approximately $181 million. Since the announcement on May 6, shares of the food company have continued trading downward through June 3 by 13.27%. It also received two noncompliance notices from Nasdaq over its failure to file its Form 10-Q and 10-K reports on time.
Frozen potato products producer Lamb Weston Holdings Inc. also suffered a negative return of 15.2% in May, despite the company posting strong fiscal third-quarter results in April. Zacks Investment Research on June 4 downgraded the company's rating to sell from buy, saying its selling, general and administrative expenses "have been rising year over year for the past few quarters, and is likely to remain high in fiscal 2019."
Across the S&P 500 Index, the real estate segment was the only sector to record gains during the month, with a total return of 1.2%, while the S&P 500 Energy Index saw the biggest slump with a negative return of 11.1%.
U.S. payment processor Total System Services Inc. was the best performing stock in the index with a total return of 20.8% as the company moves forward with its $21.5 billion merger of equals with Global Payments Inc.