Retailers are adapting their business models as technology changes how people shop. 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’s 12.5% gain has trailed the S&P 500 by 7.5 percentage points.
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 resilient consumer stock at the top of our shopping list and two we’re steering clear of.
Two Consumer Retail Stocks to Sell:
Torrid (CURV)
Market Cap: $121 million
Promoting a message of body positivity and inclusiveness, Torrid Holdings (NYSE: CURV) is a plus-size women’s apparel and accessories retailer.
Why Should You Dump CURV?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Earnings per share have contracted by 63% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
- Low returns on capital reflect management’s struggle to allocate funds effectively
Torrid is trading at $1.22 per share, or 20.6x forward P/E. Read our free research report to see why you should think twice about including CURV in your portfolio.
Zumiez (ZUMZ)
Market Cap: $371.2 million
With store associates called “Zumiez Stash Members”, Zumiez (NASDAQ: ZUMZ) is a specialty retailer of street and skate apparel, footwear, and accessories.
Why Do We Steer Clear of ZUMZ?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Revenue base of $900.3 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Persistent operating margin losses suggest the business manages its expenses poorly
Zumiez’s stock price of $21.64 implies a valuation ratio of 41.7x forward P/E. Check out our free in-depth research report to learn more about why ZUMZ doesn’t pass our bar.
One Consumer Retail Stock to Buy:
AutoZone (AZO)
Market Cap: $59.48 billion
Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE: AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads.
Why Is AZO a Top Pick?
- Store expansion strategy is justified by its healthy same-store sales
- Differentiated product assortment leads to a best-in-class gross margin of 52.9%
- Highly efficient business model is illustrated by its impressive 19.8% operating margin
At $3,555 per share, AutoZone trades at 23.3x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
