Retail stocks are wrapping up a defining earnings week, yet the sector's overall performance remains in negative territory. Although the State Street SPDR S&P Retail ETF (XRT) rebounded alongside the broader market in Friday afternoon trading, gaining nearly 1%, the fund is still down more than 1% for the week.

On an individual stock basis, AutoZone and Walmart have experienced sharp sell-offs following their earnings reports, plunging roughly 25% and 11% respectively this week, serving as the primary drags on the fund's performance. Should these declines hold through the closing bell, they would mark the steepest weekly drops for AutoZone since 2023 and for Walmart since 2022.

However, strong showings from department store operator Dillard's and pet e-commerce platform Chewy have helped limit the fund's losses, with both stocks surging more than 8% over the same period.