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 6%. This drawdown is a stark contrast from the S&P 500’s 5.4% gain.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Taking that into account, here is one resilient consumer stock at the top of our shopping list and two we’re passing on.

Two Consumer RetailStocks to Sell:

Dillard's (DDS)

Market Cap: $7.81 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 Are We Cautious About DDS?

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. Forecasted revenue decline of 2.1% for the upcoming 12 months implies demand will fall off a cliff
3. Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 2.1 percentage points

Dillard's is trading at $499.13 per share, or 11.9x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why DDS doesn’t pass our bar.

Macy's (M)

Market Cap: $3.55 billion

With a storied history that began with its 1858 founding, Macy’s (NYSE: M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.

Why Do We Avoid M?

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. Forecasted revenue decline of 4.3% for the upcoming 12 months implies demand will fall even further
3. Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability

At $13.14 per share, Macy's trades at 6.8x forward P/E. If you’re considering M for your portfolio, see our FREE research report to learn more.

One Consumer Retail Stock to Buy:

O'Reilly (ORLY)

Market Cap: $83.07 billion

Serving both the DIY customer and professional mechanic, O’Reilly Automotive (NASDAQ: ORLY) is an auto parts and accessories retailer that sells everything from fuel pumps to car air fresheners to mufflers.

Why Do We Love ORLY?

1. Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 3.9% over the past two years
2. Unique assortment of products and pricing power result in a best-in-class gross margin of 51.3%
3. Robust free cash flow margin of 11.1% gives it many options for capital deployment

O'Reilly’s stock price of $97.88 implies a valuation ratio of 31.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even 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.

Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.

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