And that could be problematic for travel stocks that have run up sharply this year. While travel demand may not be set to fall off a cliff, it is normalizing after a post-pandemic surge. In addition to moving into the online pharmacy business, Amazon is now offering virtual health care across the country.įinally, CVS is paying out billions to settle lawsuits related to its alleged role in the country’s opioid epidemic. If that weren’t enough, CVS faces tough competition from other brick-and-mortar competitors, as well as Amazon (NASDAQ: AMZN). And while CVS laid off 5,000 employees in the previous quarter, I suspect higher labor costs pressured earnings as well. This was due in part to a 17% drop in net income for the company’s pharmacy and consumer wellness segment as Covid-19-related sales continued to wane.Īlso weighing on profits were higher expenses related to increased medical costs as people utilized more outpatient services, noted Chief Executive Officer ( CEO) Karen Lynch. However, while revenue was up 10% year over year, net income declined 37% during the same period. The company reported second-quarter results earlier this month that beat on the top and bottom lines as CVS sought to reduce costs. However, the stock could fall much further, making it one of today’s consumer stocks to sell. Pharmacy retailer CVS Health (NYSE: CVS) is facing a multitude of challenges, which is reflected in the more than 20% year-to-date decline in its shares. Investors should play it safe and put HD on their list of consumer stocks to sell. That seems pricy heading into what could be another disappointing earnings announcement. While shares are up just 4% year to date, they trade at nearly 22 times forward earnings. The company is scheduled to report fiscal Q2 earnings on Aug. And management lowered its full-year sales forecast, calling for comparable sales to drop between 2% and 5%. In addition to higher interest rates, cold weather and falling lumber prices hit sales. This does not paint a pretty picture for home-improvement retailer Home Depot (NYSE: HD), which benefits from people moving to new homes and buying appliances, materials, etc.įor its fiscal first quarter, Home Depot missed revenue estimates by the widest margin in more than 20 years, CNBC reported. And according to the National Association of Realtors, existing-home sales dropped 3.3% in June and 18.9% from a year ago. With supply tight and few people clamoring to trade their current mortgage rate for a higher one, Redfin reported that the number of homes sold in the U.S., on average, fell 15.7% year over year in June. And although home prices have come down in recent months, they remain near record highs, pricing out many buyers. Interest rates are at the highest level in more than two decades, while the rate on a 30-year mortgage is near a 20-year high. If you’re looking to buy a home right now, you know there are a number of factors working against you. Furthermore, as a recent Wall Street Journal article notes, while sales volume is up, the impact of lower merchandise prices and higher labor costs could be revealed as retailers report their fiscal second-quarter results.Īdd to slower consumer spending a cooling housing market and softening travel demand, and the names below are clear choices for consumer stocks to sell or, at the very least, avoid. retail sales for June came in below expectations, rising just 0.2% versus a 0.5% increase in May. More broadly speaking, investors should also be concerned with the slowdown in retail spending. Today’s list of consumer stocks to sell contains a discretionary high-flyer, as well as two consumer staples stocks that have significantly underperformed this year.Īll three consumer stocks to avoid are similar in that they face significant sector and company-specific headwinds. Meanwhile, the Consumer Staples Select Sector SPDR Fund (NYSEARCA: XLP) is basically flat. The Consumer Discretionary Select Sector SPDR Fund (NYSEARCA: XLY) is up 34.5% so far this year, making it the S&P 500’s third-best-performing sector. InvestorPlace - Stock Market News, Stock Advice & Trading TipsĬonsumer stocks have been a mixed bag for investors in 2023.
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