The consumer discretionary sector includes companies that sell goods and services considered non-essential by consumers, such as apparel, entertainment, and automobiles. This sector is particularly sensitive to economic cycles, as spending on these products tends to increase when the economy is strong and decrease during downturns. Stocks in this category can offer significant growth potential during periods of economic expansion as consumer confidence and disposable income rise.
Investing in consumer discretionary stocks offers the advantage of capitalizing on consumer trends and economic upturns. Companies like Lululemon Athletica and Crocs have shown resilience and growth by tapping into changing consumer preferences and lifestyle trends. However, the sector’s reliance on economic health also poses risks. During recessions or periods of economic uncertainty, these stocks can experience volatility and significant declines in value as consumers cut back on discretionary spending.
Overall, buying consumer discretionary stocks can be a strategic move for investors looking for growth in a thriving economy. However, it requires an understanding of market trends and consumer behavior. Investors must also be prepared for potential downturns, which can impact these stocks more severely than those in more essential sectors. That said, let’s look at two consumer discretionary stocks to watch in the stock market now.
Consumer Discretionary Stocks To Buy [Avoid] Today
- lululemon athletica inc. (NASDAQ: LULU)
- Crocs Inc. (NASDAQ: CROX)
lululemon athletica (LULU Stock)
Kicking this off, lululemon athletica inc. (LULU), commonly known as Lululemon, is a Canadian multinational athletic apparel retailer. It specializes in yoga-inspired clothing as well as gear for running, cycling, and general fitness. Lululemon has expanded its product line to include a variety of active and casual wear, focusing on high-quality fabrics and performance-driven designs.
Just this week, the company announced when it will report its first quarter 2024 financial and operating results. In detail, lululemon athletica will announce its Q1 2024 financial results on Wednesday, June 5, 2024. Additionally, the company will host a conference call following the close of the U.S. stock market to discuss the results.
In the last month of trading, shares of LULU stock have pulled back by 18.35%. Moreover, on Thursday afternoon, LULU stock is trading lower by 0.64% on the day so far, trading at $297.71 a share.
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Crocs (CROX Stock)
Next, Crocs Inc. (CROX) is an American company that’s popular for its distinctive brand of lightweight, comfortable footwear. Originally, the company intended its foam clog design for boating and outdoor activities, but it quickly became a popular all-purpose shoe. Crocs has since broadened its product range to include a variety of footwear styles while maintaining its focus on comfort. Its products are sold in more than 90 countries.
Earlier this month, Crocs announced a beat for its first quarter 2024 financial results. Specifically, the company notched in earnings of $3.02 per share, with revenue of $938.63 million for Q1 2024. This was in comparison with analysts’ consensus estimates for the quarter which were earning estimates of $2.25, on revenue estimates of $880.88 million. Additionally, the company saw a 6.16% increase in revenue versus the same period, the previous year.
In the past month of trading, shares of CROX stock have jumped higher by 13.76%. Meanwhile, during Thursday’s early afternoon trading session, Crocs stock is trading green on the day up 1.74%, currently trading at $144.02 per share.
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