Retailers are adapting their business models as technology changes how people shop. Still, secular trends are working against them as e-commerce continues to take share from brick-and-mortar stores. This puts retail stocks in a tough spot, and over the past six months, the industry’s 2.3% gain has trailed the S&P 500 by 9.5 percentage points.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. On that note, here is one consumer stock boasting a durable advantage and two we’re passing on.
Two Consumer Retail Stocks to Sell:
Dillard's (DDS)
Market Cap: $9.66 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 Wary of DDS?
- Absence of new stores indicates weak demand as management focuses on improving existing location performance
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Earnings per share have dipped by 8.9% annually over the past three years, which is concerning because stock prices follow EPS over the long term
At $618.56 per share, Dillard's trades at 18.1x forward P/E. Dive into our free research report to see why there are better opportunities than DDS.
MarineMax (HZO)
Market Cap: $794.7 million
Appropriately headquartered in Clearwater, Florida, MarineMax (NYSE:HZO) sells boats, yachts, and other marine products.
Why Should You Sell HZO?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Performance over the past three years was negatively impacted by new share issuances as its earnings per share dropped by 54.7% annually, worse than its revenue
- 9× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
MarineMax is trading at $35.69 per share, or 25.2x forward P/E. If you’re considering HZO for your portfolio, see our FREE research report to learn more.
One Consumer Retail Stock to Watch:
Burlington (BURL)
Market Cap: $22.88 billion
Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.
Why Should BURL Be on Your Watchlist?
- Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 3.5% over the past two years
- Free cash flow margin expanded by 6.4 percentage points over the last year, providing additional flexibility for investments and share buybacks/dividends
Burlington’s stock price of $367.85 implies a valuation ratio of 30.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.