3 Consumer Stocks Walking a Fine Line

Most consumer discretionary businesses succeed or fail based on the broader economy. Lately, it seems like demand trends have worked in their favor as the industry has returned 25% over the past six months, similar to 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. Keeping that in mind, here are three consumer stocks that may face trouble.

La-Z-Boy (LZB)

Market Cap: $1.33 billion

The prized possession of every mancave, La-Z-Boy (NYSE:LZB) is a furniture company specializing in recliners, sofas, and seats.

Why Do We Avoid LZB?

1. Annual sales declines of 2.8% for the past two years show its products and services struggled to connect with the market
2. Anticipated sales growth of 1.9% for the next year implies demand will be shaky
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $32.31 per share, La-Z-Boy trades at 12.6x forward P/E. If you’re considering LZB for your portfolio, see our FREE research report to learn more.

Norwegian Cruise Line (NCLH)

Market Cap: $10.12 billion

With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE:NCLH) is a premier global cruise company.

Why Does NCLH Fall Short?

1. Number of passenger cruise days has disappointed over the past two years, indicating weak demand for its offerings
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

Norwegian Cruise Line’s stock price of $22.20 implies a valuation ratio of 9.5x forward P/E. To fully understand why you should be careful with NCLH, check out our full research report (it’s free for active Edge members).

WeightWatchers (WW)

Market Cap: $348.7 million

Known by many for its old cable television commercials, WeightWatchers (NASDAQ:WW) is a wellness company offering a range of products and services promoting weight loss and healthy habits.

Why Do We Pass on WW?

1. Demand for its offerings was relatively low as its number of members has underwhelmed
2. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

WeightWatchers is trading at $34.98 per share, or 20.8x forward P/E. Read our free research report to see why you should think twice about including WW in your portfolio.

Stocks We Like More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% 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.