Most consumer discretionary businesses succeed or fail based on the broader economy. Over the past six months, it seems like demand trends are working against their favor as the industry has tumbled by 5.8%. This drawdown was worse than the S&P 500’s 1% decline.
Investors should tread carefully as many companies in this space are also unpredictable because they lack recurring revenue business models. Taking that into account, here are three consumer stocks we’re swiping left on.
Caleres (CAL)
Market Cap: $597 million
The owner of Dr. Scholl's, Caleres (NYSE: CAL) is a footwear company offering a range of styles.
Why Should You Sell CAL?
- Annual sales declines of 1.4% for the past five years show its products and services struggled to connect with the market
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- Low returns on capital reflect management’s struggle to allocate funds effectively
Caleres is trading at $17.51 per share, or 5.6x forward P/E. To fully understand why you should be careful with CAL, check out our full research report (it’s free).
PVH (PVH)
Market Cap: $4.24 billion
Founded in 1881 by a husband and wife duo, PVH (NYSE: PVH) is a global fashion conglomerate with iconic brands like Calvin Klein and Tommy Hilfiger.
Why Are We Out on PVH?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $81 per share, PVH trades at 7.1x forward P/E. If you’re considering PVH for your portfolio, see our FREE research report to learn more.
Charter (CHTR)
Market Cap: $57.71 billion
Operating as Spectrum, Charter (NASDAQ: CHTR) is a leading telecommunications company offering cable television, high-speed internet, and voice services across the United States.
Why Does CHTR Fall Short?
- Sluggish trends in its internet subscribers suggest customers aren’t adopting its solutions as quickly as the company hoped
- Sales are projected to be flat over the next 12 months and imply weak demand
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Charter’s stock price of $415.42 implies a valuation ratio of 10.6x forward P/E. Read our free research report to see why you should think twice about including CHTR in your portfolio.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
