Most consumer discretionary businesses succeed or fail based on the broader economy. This sensitive demand profile can cause discretionary stocks to plummet when macro uncertainty enters the fray, and over the past six months, the industry has shed 8.3%. This drop was worse than the S&P 500’s 2% fall.

Investors should tread carefully as many companies in this space are also unpredictable because they lack recurring revenue business models. On that note, here are three consumer stocks we’re swiping left on.

Tapestry (TPR)

Market Cap: $14.59 billion

Originally founded as Coach, Tapestry (NYSE: TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.

Why Is TPR Not Exciting?

1. Annual revenue growth of 1.4% over the last two years was below our standards for the consumer discretionary sector
2. Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
3. Anticipated sales growth of 2.7% for the next year implies demand will be shaky

Tapestry’s stock price of $70.01 implies a valuation ratio of 14.2x forward P/E. Read our free research report to see why you should think twice about including TPR in your portfolio.

Malibu Boats (MBUU)

Market Cap: $570.4 million

Founded in California in 1982, Malibu Boats (NASDAQ: MBUU) is a manufacturer of high-performance sports boats and luxury watercrafts.

Why Should You Dump MBUU?

1. Sluggish trends in its boats sold suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Earnings per share fell by 29% annually over the last five years while its revenue was flat, showing each sale was less profitable
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

At $29.05 per share, Malibu Boats trades at 8.8x forward P/E. Check out our free in-depth research report to learn more about why MBUU doesn’t pass our bar.

Adtalem (ATGE)

Market Cap: $4.00 billion

Formerly known as DeVry Education Group, Adtalem Global Education (NYSE: ATGE) is a global provider of workforce solutions and educational services.

Why Does ATGE Give Us Pause?

1. Sales trends were unexciting over the last two years as its 8.2% annual growth was below the typical consumer discretionary company
2. Estimated sales growth of 6.4% for the next 12 months implies demand will slow from its two-year trend
3. ROIC of 8.8% reflects management’s challenges in identifying attractive investment opportunities

Adtalem is trading at $108.97 per share, or 17.3x forward P/E. Dive into our free research report to see why there are better opportunities than ATGE.

Stocks We Like More

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 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.