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4 Consumer Discretionary Stocks to Buy as Inflation Cools
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With inflation cooling to its lowest level in more than three years, the U.S. economy is signaling a shift toward stability. August saw inflation rise by just 2.5% year over year, down from 2.9% in July. This steady decline, coupled with the expectation of an interest rate cut from the Federal Reserve, is setting the stage for improved consumer confidence. For investors, this marks an opportune moment to consider sectors poised to benefit from these positive trends.
One of the beneficiaries of this cooling inflationary environment is the Consumer Discretionary sector. Whether it’s spending on apparel, electronics or home improvements, the demand for discretionary products typically rises when inflation is under control. These trends are paving the way for a rebound in consumer spending, creating favorable conditions for companies such as G-III Apparel Group, Ltd. (GIII - Free Report) , Victoria's Secret & Co. (VSCO - Free Report) , Wolverine World Wide, Inc. (WWW - Free Report) and Crocs, Inc. (CROX - Free Report) .
Reduced inflationary pressures lower the costs of raw materials and production for companies. This means that businesses can either pass on savings to customers through lower prices, stimulating demand, or improving their profit margins. The dual benefit of lower input costs and increased consumer spending could lead to stronger earnings growth in the coming quarters, making this a promising sector for investors.
Another factor supporting consumer discretionary stocks is the anticipated interest rate cut by the Federal Reserve in the upcoming meeting as inflation eases. Consumers may be more inclined to finance big-ticket purchases as borrowing costs decrease. At the same time, companies within this sector can benefit from lower borrowing costs for expansion, increasing their ability to invest in new products or markets.
Below, we have highlighted four companies in this sector that are well-positioned to capitalize on the combination of cooling inflation and a more accommodative monetary environment.
Past-Year Stock Price Performance for Our Picks
Image Source: Zacks Investment Research
4 Strong Consumer Discretionary Stocks
G-III Apparel Capitalizes on Strategic Brand Expansions
G-III Apparel Group stands out as a strong investment prospect, driven by its strategic global expansion and brand portfolio enhancement. The company’s licensing agreements, such as the highly anticipated Converse apparel launch in Fall 2025, along with partnerships with leading brands like Halston, Nautica and Champion Outwear, are poised to unlock new revenue streams. G-III’s increased stake in All We Wear Group will boost its European presence, with expected sales growth exceeding $200 million in the next three to five years. The robust performance of its owned brands, Donna Karan, DKNY and Karl Lagerfeld, continues to drive market share gains, further solidifying the company’s promising outlook.
The Zacks Consensus Estimate for G-III Apparel’s current and next financial-year earnings per share has increased by 10.5% and 10.2% to $4.01 and $4.11, respectively, over the past seven days. This Zacks Rank #1 (Strong Buy) company has a trailing four-quarter earnings surprise of 118.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research
Victoria’s Secret New Product Lines Popular With Buyers
Victoria’s Secret is a compelling investment opportunity, thanks to its focus on product innovation and strategic marketing. The launch of new collections, including the Dream bra and Featherweight Max sports bra, has resonated well with consumers, bolstering sales both online and in-store. The brand’s strong performance in international markets and increased digital market share support revenue expansion. Coupled with disciplined expense management and a robust loyalty program, Victoria’s Secret is well-positioned to capitalize on these trends.
The Zacks Consensus Estimate for Victoria’s Secret’s current and next financial-year earnings per share has risen by 14.5% and 13.2% to $1.98 and $2.14, respectively, over the past 30 days. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 2.9%, on average.
Image Source: Zacks Investment Research
Wolverine’s Turnaround Plan Spurs Operational Gains
Investors can have confidence in Wolverine World Wide due to its successful execution of a strategic turnaround plan. This plan has not only stabilized the business but also enhanced operational efficiency. Key achievements include a reduction in inventory and debt, which has improved financial flexibility and investment capacity. The company’s introduction of new, trend-right products, such as those from Saucony, has resonated well with consumers. Wolverine’s efforts to enhance brand positioning, optimize distribution and invest in demand-creation initiatives have bolstered market traction.
The Zacks Consensus Estimate for Wolverine’s current and next financial-year earnings per share has increased by 3.7% and 0.8% to 85 cents and $1.28, respectively, over the past 60 days. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 7.5%, on average.
Image Source: Zacks Investment Research
Crocs Has Record Q2 on Back of Global Expansion
Crocs presents a solid investment play, thanks to its strategic investments in brand awareness, product innovation and global market expansion. The company’s record-setting second quarter, driven by strong sales of popular items like the SpongeBob clog and the Salehe Juniper sneaker, highlights its successful product innovation. Coupled with impressive international market performance, particularly in China and Australia, and increasing demand for its signature Classic Clog and Jibbitz, Crocs is effectively capturing a larger share of the global market. Ongoing investments in marketing and digital channels bolster its ability to attract and retain customers.
The Zacks Consensus Estimate for Crocs’ current and next financial-year earnings per share has advanced by 1.2% and 1.5% to $12.85 and $13.99, respectively, over the past 60 days. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 14.9%, on average.
Image Source: Zacks Investment Research
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4 Consumer Discretionary Stocks to Buy as Inflation Cools
With inflation cooling to its lowest level in more than three years, the U.S. economy is signaling a shift toward stability. August saw inflation rise by just 2.5% year over year, down from 2.9% in July. This steady decline, coupled with the expectation of an interest rate cut from the Federal Reserve, is setting the stage for improved consumer confidence. For investors, this marks an opportune moment to consider sectors poised to benefit from these positive trends.
One of the beneficiaries of this cooling inflationary environment is the Consumer Discretionary sector. Whether it’s spending on apparel, electronics or home improvements, the demand for discretionary products typically rises when inflation is under control. These trends are paving the way for a rebound in consumer spending, creating favorable conditions for companies such as G-III Apparel Group, Ltd. (GIII - Free Report) , Victoria's Secret & Co. (VSCO - Free Report) , Wolverine World Wide, Inc. (WWW - Free Report) and Crocs, Inc. (CROX - Free Report) .
Reduced inflationary pressures lower the costs of raw materials and production for companies. This means that businesses can either pass on savings to customers through lower prices, stimulating demand, or improving their profit margins. The dual benefit of lower input costs and increased consumer spending could lead to stronger earnings growth in the coming quarters, making this a promising sector for investors.
Another factor supporting consumer discretionary stocks is the anticipated interest rate cut by the Federal Reserve in the upcoming meeting as inflation eases. Consumers may be more inclined to finance big-ticket purchases as borrowing costs decrease. At the same time, companies within this sector can benefit from lower borrowing costs for expansion, increasing their ability to invest in new products or markets.
Below, we have highlighted four companies in this sector that are well-positioned to capitalize on the combination of cooling inflation and a more accommodative monetary environment.
Past-Year Stock Price Performance for Our Picks
Image Source: Zacks Investment Research
4 Strong Consumer Discretionary Stocks
G-III Apparel Capitalizes on Strategic Brand Expansions
G-III Apparel Group stands out as a strong investment prospect, driven by its strategic global expansion and brand portfolio enhancement. The company’s licensing agreements, such as the highly anticipated Converse apparel launch in Fall 2025, along with partnerships with leading brands like Halston, Nautica and Champion Outwear, are poised to unlock new revenue streams. G-III’s increased stake in All We Wear Group will boost its European presence, with expected sales growth exceeding $200 million in the next three to five years. The robust performance of its owned brands, Donna Karan, DKNY and Karl Lagerfeld, continues to drive market share gains, further solidifying the company’s promising outlook.
The Zacks Consensus Estimate for G-III Apparel’s current and next financial-year earnings per share has increased by 10.5% and 10.2% to $4.01 and $4.11, respectively, over the past seven days. This Zacks Rank #1 (Strong Buy) company has a trailing four-quarter earnings surprise of 118.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research
Victoria’s Secret New Product Lines Popular With Buyers
Victoria’s Secret is a compelling investment opportunity, thanks to its focus on product innovation and strategic marketing. The launch of new collections, including the Dream bra and Featherweight Max sports bra, has resonated well with consumers, bolstering sales both online and in-store. The brand’s strong performance in international markets and increased digital market share support revenue expansion. Coupled with disciplined expense management and a robust loyalty program, Victoria’s Secret is well-positioned to capitalize on these trends.
The Zacks Consensus Estimate for Victoria’s Secret’s current and next financial-year earnings per share has risen by 14.5% and 13.2% to $1.98 and $2.14, respectively, over the past 30 days. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 2.9%, on average.
Image Source: Zacks Investment Research
Wolverine’s Turnaround Plan Spurs Operational Gains
Investors can have confidence in Wolverine World Wide due to its successful execution of a strategic turnaround plan. This plan has not only stabilized the business but also enhanced operational efficiency. Key achievements include a reduction in inventory and debt, which has improved financial flexibility and investment capacity. The company’s introduction of new, trend-right products, such as those from Saucony, has resonated well with consumers. Wolverine’s efforts to enhance brand positioning, optimize distribution and invest in demand-creation initiatives have bolstered market traction.
The Zacks Consensus Estimate for Wolverine’s current and next financial-year earnings per share has increased by 3.7% and 0.8% to 85 cents and $1.28, respectively, over the past 60 days. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 7.5%, on average.
Image Source: Zacks Investment Research
Crocs Has Record Q2 on Back of Global Expansion
Crocs presents a solid investment play, thanks to its strategic investments in brand awareness, product innovation and global market expansion. The company’s record-setting second quarter, driven by strong sales of popular items like the SpongeBob clog and the Salehe Juniper sneaker, highlights its successful product innovation. Coupled with impressive international market performance, particularly in China and Australia, and increasing demand for its signature Classic Clog and Jibbitz, Crocs is effectively capturing a larger share of the global market. Ongoing investments in marketing and digital channels bolster its ability to attract and retain customers.
The Zacks Consensus Estimate for Crocs’ current and next financial-year earnings per share has advanced by 1.2% and 1.5% to $12.85 and $13.99, respectively, over the past 60 days. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 14.9%, on average.
Image Source: Zacks Investment Research