The performance of consumer discretionary businesses is closely linked to economic cycles. Lately, it seems like demand trends have worked in their favor as the industry has returned 39.1% over the past six months, outpacing S&P 500 by 6.5 percentage points.

Although these companies have produced results lately, investors must be mindful because many are fads and only a few will stand the test of time. Taking that into account, here are three consumer stocks we’re swiping left on.

Stitch Fix (SFIX)

Market Cap: $561.5 million

One of the original subscription box companies, Stitch Fix (NASDAQ: SFIX) is an online personal styling and fashion service that curates personalized clothing selections for customers.

Why Should You Dump SFIX?

1. Demand for its offerings was relatively low as its number of active clients has underwhelmed
2. Historical operating margin losses point to an inefficient cost structure
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Stitch Fix’s stock price of $4.25 implies a valuation ratio of 13x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why SFIX doesn’t pass our bar.

Oxford Industries (OXM)

Market Cap: $604.1 million

The parent company of Tommy Bahama, Oxford Industries (NYSE: OXM) is a lifestyle fashion conglomerate with brands that embody outdoor happiness.

Why Should You Sell OXM?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Estimated sales growth of 1.4% for the next 12 months is soft and implies weaker demand
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $40.63 per share, Oxford Industries trades at 11.8x forward P/E. Dive into our free research report to see why there are better opportunities than OXM.

Scholastic (SCHL)

Market Cap: $722.2 million

Creator of the legendary Scholastic Book Fair, Scholastic (NASDAQ: SCHL) is an international company specializing in children's publishing, education, and media services.

Why Is SCHL Risky?

1. Products and services aren't resonating with the market as its revenue declined by 1.7% annually over the last two years
2. Low returns on capital reflect management’s struggle to allocate funds effectively, and its shrinking returns suggest its past profit sources are losing steam
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Scholastic is trading at $28.37 per share, or 18.8x forward P/E. If you’re considering SCHL for your portfolio, see our FREE research report to learn more.

Stocks We Like More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

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