Retailers are adapting their business models as technology changes how people shop. Still, demand can be volatile as the industry is exposed to the ups and downs of consumer spending. This has stirred some uncertainty lately as retail stocks have tumbled by 4.3% over the past six months. This drawdown is a far cry from the S&P 500’s 5.7% ascent.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Keeping that in mind, here is one consumer stock boasting a durable advantage and two best left ignored.
Two Consumer Retail Stocks to Sell:
Shoe Carnival (SCVL)
Market Cap: $548.9 million
Known for its playful atmosphere that features carnival elements, Shoe Carnival (NASDAQ:SCVL) is a retailer that sells footwear from mainstream brands for the entire family.
Why Should You Sell SCVL?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Subscale operations are evident in its revenue base of $1.14 billion, meaning it has fewer distribution channels than its larger rivals
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 18.6% annually, worse than its revenue
At $20.03 per share, Shoe Carnival trades at 13.7x forward P/E. Read our free research report to see why you should think twice about including SCVL in your portfolio.
Academy Sports (ASO)
Market Cap: $3.99 billion
Founded in 1938 as a tire shop before expanding into fishing equipment, Academy Sports & Outdoor (NASDAQ:ASO) sells a broad selection of sporting goods but is still known for its outdoor activity merchandise.
Why Do We Think Twice About ASO?
- Products have few die-hard fans as sales have declined by 2.4% annually over the last three years
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Free cash flow margin dropped by 3.9 percentage points over the last year, implying the company became more capital intensive as competition picked up
Academy Sports’s stock price of $59.78 implies a valuation ratio of 9.5x forward P/E. Check out our free in-depth research report to learn more about why ASO doesn’t pass our bar.
One Consumer Retail Stock to Buy:
Warby Parker (WRBY)
Market Cap: $3.36 billion
Founded in 2010, Warby Parker (NYSE:WRBY) designs, manufactures, and sells eyewear, including prescription glasses, sunglasses, and contact lenses, through its e-commerce platform and physical retail locations.
Why Do We Love WRBY?
- Bold push to open new stores demonstrates an ambitious strategy to establish itself in underpenetrated territories
- Notable projected revenue growth of 12.5% for the next 12 months hints at market share gains
- Earnings per share have massively outperformed its peers over the last three years, increasing by 134% annually
Warby Parker is trading at $27.51 per share, or 54.1x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
