Retailers are overhauling their operations as technology redefines the shopping experience. Still, secular trends are working against their favor as e-commerce continues to take share from brick and mortars. This puts retail stocks in a tough spot, and over the past six months, the industry has pulled back by 13%. This performance was worse than the S&P 500’s 4.7% decline.

Investors should tread carefully as many companies in this space can be value traps. Keeping that in mind, here are three consumer stocks we’re swiping left on.

Dollar General (DG)

Market Cap: $20.28 billion

Appealing to the budget-conscious consumer, Dollar General (NYSE: DG) is a discount retailer that sells a wide range of household essentials, groceries, apparel/beauty products, and seasonal merchandise.

Why Are We Cautious About DG?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
2. Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 29.9%
3. High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Dollar General is trading at $91.80 per share, or 15.7x forward P/E. Dive into our free research report to see why there are better opportunities than DG.

Monro (MNRO)

Market Cap: $412.4 million

Started as a single location in Rochester, New York, Monro (NASDAQ: MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes.

Why Do We Steer Clear of MNRO?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
2. Revenue base of $1.21 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
3. Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging

Monro’s stock price of $13.95 implies a valuation ratio of 14.4x forward P/E. If you’re considering MNRO for your portfolio, see our FREE research report to learn more.

Dillard's (DDS)

Market Cap: $5.55 billion

With stores located largely in the Southern and Western US, Dillard’s (NYSE: DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.

Why Do We Think Twice About DDS?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
2. Sales are projected to tank by 2.4% over the next 12 months as demand evaporates further
3. Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 2.2 percentage points

At $353.61 per share, Dillard's trades at 11.5x forward P/E. Read our free research report to see why you should think twice about including DDS in your portfolio.

Stocks That Overcame Trump’s 2018 Tariffs

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. 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 Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.