1 Consumer Stock Worth Investigating and 2 to Keep Off Your Radar

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 has pulled back by 7.1%. This drawdown is a far cry from the S&P 500’s 4.8% ascent.

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 consumer stock poised to generate sustainable market-beating returns and two we’re passing on.

Two Consumer RetailStocks to Sell:

Camping World (CWH)

Market Cap: $1.18 billion

Founded in 1966 as a single recreational vehicle (RV) dealership, Camping World (NYSE:CWH) still sells RVs along with boats and general merchandise for outdoor activities.

Why Are We Hesitant About CWH?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
2. Historically negative EPS raises concerns for risk-averse investors and makes its earnings potential harder to gauge
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Camping World is trading at $18.82 per share, or 19.6x forward P/E. Dive into our free research report to see why there are better opportunities than CWH.

Arhaus (ARHS)

Market Cap: $1.35 billion

With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ:ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.

Why Does ARHS Give Us Pause?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Smaller revenue base of $1.29 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
3. Efficiency has decreased over the last year as its operating margin fell by 5 percentage points

At $9.55 per share, Arhaus trades at 19.2x forward P/E. Check out our free in-depth research report to learn more about why ARHS doesn’t pass our bar.

One Consumer Retail Stock to Watch:

Ollie's (OLLI)

Market Cap: $7.99 billion

Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet (NASDAQ:OLLI) is a discount retailer that acquires excess inventory then sells at meaningful discounts.

Why Does OLLI Catch Our Eye?

1. Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
2. Locations open for at least a year are seeing increased demand as same-store sales have averaged 4.1% growth over the past two years
3. Demand for the next 12 months is expected to accelerate above its six-year trend as Wall Street forecasts robust revenue growth of 14.1%

Ollie’s stock price of $129.80 implies a valuation ratio of 33.8x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

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