4 Consumer Discretionary Stocks to Buy as Inflation Continues to Cool

Price pressures are easing, and the signs are clear as consumer spending is on the rise. Data shows that inflation eased in January, much to the relief of both consumers and the Federal Reserve, which paused its rate cut this year.

Stubbornly high inflation made it difficult for the Federal Reserve to loosen its monetary policy, while a cooling labor market has fueled worries about broader economic weakness. Still, the most recent figures offer some reassurance, showing that inflation cooled in January.

Given this scenario, we recommend buying four consumer discretionary stocks, namely, Carnival Corporation & plc CCL, Callaway Golf Company CALY, Dolby Laboratories, Inc. DLB and Marriott International, Inc. MAR.

These stocks have seen positive earnings estimate revisions in the past 60 days, carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and are set for solid returns. You can see the complete list of today’s Zacks #1 Rank stocks here.

Inflation Eases in January

The consumer price index (CPI) rose 2.4% in January on a year-over-year basis, down 0.3% from the previous month, the Bureau of Labor Statistics reported last week. This is the lowest level since May 2025, or the month after President Donald Trump imposed stiff tariffs on imports from all trading partners of the United States.

Core CPI, which strips out the volatile food and energy costs, rose 2.5% in January from year-ago levels, matching analysts’ expectations and the lowest since April 2021.

Month over month, CPI increased 0.2%, lower than the consensus estimate of a rise of 0.3%. Food prices rose 0.2%, while energy prices fell 1.5%. Shelter costs rose a meager 0.2%. Housing-related costs have slowed substantially in recent months, a sign that inflation may be inching closer to the Federal Reserve’s 2% target.

Over the past year, shelter expenses have been one of the biggest drivers pushing overall inflation higher. A tightening labor market has been a major concern lately. However, job additions to the economy gathered pace in January. The Labor Department reported that the U.S. economy added 130,000 jobs in January, while the unemployment rate fell to 4.3% from 4.4% in December.

The Federal Reserve said at the end of 2025 that it is confident about inflation slowing down to 2.4% by the end of 2026 and economic growth accelerating to 2.3%. The latest CPI reading appears to be echoing the Fed’s forecast.

4 Consumer Discretionary Stocks With Upside

Carnival Corporation & plc

Carnival Corporation & plc operates as a cruise and vacation company. As a single economic entity, CCL forms the largest cruise operator in the world. Carnival Corporation & plcis the world’s leading leisure travel firm and carries nearly half of the global cruise guests.

Carnival Corporation’s expected earnings growth rate for the current year is 12.9%. The Zacks Consensus Estimate for current-year earnings improved 6.3% over the last 60 days. CCL currently sports a Zacks Rank #1.

Callaway Golf Company 

Callaway Golf Company is a premium golf equipment, gear and apparel company with a portfolio of brands, including Callaway Golf, Odyssey, TravisMathew and OGIO. 

Callaway Golf Company’s expected earnings growth rate for the current year is 28.6%. The Zacks Consensus Estimate for current-year earnings improved more than 100% over the last 60 days. CALY currently sports a Zacks Rank #1.

Dolby Laboratories, Inc.

Dolby Laboratories, Inc. develops audio and imaging technologies that revolutionize entertainment for user-generated content, TV shows, films, music and gaming. A majority of DLB’s revenues are derived from the licensing of audio technologies. Dolby Laboratories operates on various licensing models, including a two-tier model, an integrated licensing model, a patent licensing model, recoveries and collaboration arrangements.

Dolby Laboratories’expected earnings growth rate for the current year is 0.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the past 60 days. DLB currently carries a Zacks Rank #2.

Marriott International

Marriott International is a leading worldwide hospitality company focused on lodging management and franchising after the spin-off of its timeshare business into a publicly traded company in November 2011. At the end of the fourth quarter of 2025, Marriott's development pipeline totaled 4,056 hotels with approximately 610,000 rooms.

Marriott International’s expected earnings growth rate for the current year is 16.5%. The Zacks Consensus Estimate for current-year earnings has improved 1.7% over the past 60 days. MAR currently has a Zacks Rank #2.

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This article originally published on Zacks Investment Research (zacks.com).

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