3 Consumer Stocks That Concern Us

August 29, 2025 at 00:37 AM EDT

WYNN Cover Image

The performance of consumer discretionary businesses is closely linked to economic cycles. Thankfully for the industry, demand trends seem to be healthy as discretionary stocks have gained 10.3% over the past six months. This performance has nearly mirrored the S&P 500.

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. On that note, here are three consumer stocks we’re steering clear of.

Wynn Resorts (WYNN)

Market Cap: $13.05 billion

Founded by the former Mirage Resorts CEO, Wynn Resorts (NASDAQ: WYNN) is a global developer and operator of high-end hotels and casinos, known for its luxurious properties and premium guest services.

Why Does WYNN Give Us Pause?

Lackluster 9.9% annual revenue growth over the last five years indicates the company is losing ground to competitors
Underwhelming 4% return on capital reflects management’s difficulties in finding profitable growth opportunities
High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens

At $126.75 per share, Wynn Resorts trades at 27.2x forward P/E. Dive into our free research report to see why there are better opportunities than WYNN.

Hyatt Hotels (H)

Market Cap: $13.88 billion

Founded in 1957, Hyatt Hotels (NYSE: H) is a global hospitality company with a portfolio of 20 premier brands and over 950 properties across 65 countries.

Why Do We Think Twice About H?

Revenue per room has disappointed over the past two years due to weaker trends in its daily rates and occupancy levels
Operating margin of 4.9% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
Negative returns on capital show management lost money while trying to expand the business

Hyatt Hotels is trading at $144.28 per share, or 47.2x forward P/E. To fully understand why you should be careful with H, check out our full research report (it’s free).

1-800-FLOWERS (FLWS)

Market Cap: $356 million

Founded in 1976, 1-800-FLOWERS (NASDAQ: FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.

Why Do We Avoid FLWS?

Sales tumbled by 9.9% annually over the last two years, showing consumer trends are working against its favor
Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 18.4% annually
Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

1-800-FLOWERS’s stock price of $5.72 implies a valuation ratio of 19x forward P/E. If you’re considering FLWS for your portfolio, see our FREE research report to learn more.

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3 Consumer Stocks That Concern Us

Wynn Resorts (WYNN)

Hyatt Hotels (H)

1-800-FLOWERS (FLWS)

High-Quality Stocks for All Market Conditions

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