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 10.1%. This drop was worse than the S&P 500’s 3.2% loss.

While some companies have durable competitive advantages that enable them to grow consistently, the odds aren’t great for the ones we’re analyzing today. With that said, here are three consumer stocks we’re swiping left on.

Marriott (MAR)

Market Cap: $84.14 billion

Founded by J. Willard Marriott in 1927, Marriott International (NASDAQ: MAR) is a global hospitality company with a portfolio of over 7,000 properties and 30 brands, spanning 130+ countries and territories.

Why Do We Avoid MAR?

1. Revenue per room has underperformed over the past two years, suggesting it may need to develop new facilities
2. Subpar operating margin of 15.4% constrains its ability to invest in process improvements or effectively respond to new competitive threats
3. Free cash flow margin is anticipated to expand by 1.1 percentage points over the next year, providing additional flexibility for investments and share buybacks/dividends

Marriott’s stock price of $316.38 implies a valuation ratio of 28.2x forward P/E. Read our free research report to see why you should think twice about including MAR in your portfolio.

Mister Car Wash (MCW)

Market Cap: $2.29 billion

Formerly known as Hotshine Holdings, Mister Car Wash (NYSE: MCW) offers car washes across the United States through its conveyorized service.

Why Do We Think MCW Will Underperform?

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. Cash burn makes us question whether it can achieve sustainable long-term growth
3. High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Mister Car Wash is trading at $7.00 per share, or 14.7x forward P/E. Dive into our free research report to see why there are better opportunities than MCW.

Performance Food Group (PFGC)

Market Cap: $13.04 billion

With a massive network spanning 155 distribution centers and delivering over 250,000 different food products, Performance Food Group (NYSE: PFGC) distributes food and food-related products to over 300,000 restaurants, convenience stores, theaters, and institutions across North America.

Why Do We Steer Clear of PFGC?

1. The company has faced growth challenges as its 19.8% annual revenue increases over the last five years fell short of other consumer discretionary companies
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 1.1% for the last two years
3. Returns on capital are increasing as management makes relatively better investment decisions

At $83.01 per share, Performance Food Group trades at 16.6x forward P/E. If you’re considering PFGC for your portfolio, see our FREE research report to learn more.

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