The Consumer Discretionary sector has witnessed a mixed performance so far in 2025. The beginning of the year was marked by elevated inflation, high interest rates, and growing uncertainty around trade and fiscal policies. These factors have led to cautious consumer behavior, especially in discretionary spending categories. While the job market remains relatively stable, inflationary pressures and overall costs of living have reduced consumers’ ability to spend freely. Businesses across the sector are also facing planning challenges due to unpredictable tariff developments, which are affecting sourcing decisions, pricing strategies and inventory management.

Per the latest Earnings Preview, 43.3% of the companies in the Zacks Consumer Discretionary sector, comprising 60.9% of the sector’s market capitalization, reported earnings till April 30. Of these, 53.8% beat earnings estimates and 46.2% surpassed revenue estimates. Earnings increased 4% year over year on 0.7% higher revenues. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Inflationary pressures, global uncertainties and fluctuating consumer sentiment, particularly among lower-income households, are likely to have influenced spending patterns in the first quarter of 2025. Businesses operating in the leisure and recreation space have had to adjust quickly to remain competitive, often through operational efficiencies and more personalized service offerings. While discussing the sector’s performance trends in the first quarter, companies such as Planet Fitness, Inc. (PLNT Quick QuotePLNT - Free Report) , Peloton Interactive, Inc. (PTON Quick QuotePTON - Free Report) , Xponential Fitness, Inc. (XPOF Quick QuoteXPOF - Free Report) and PENN Entertainment, Inc. (PENN Quick QuotePENN - Free Report) can be highlighted, as they are set to report their earnings results tomorrow.

Meanwhile, leisure and recreation services, a key segment within the consumer discretionary space, has held up comparatively well despite these headwinds. The continued shift in consumer preference toward experience-based spending has helped maintain demand in areas such as fitness, gaming and entertainment. However, the industry is navigating a difficult environment, marked by rising labor and supply costs, tightening pricing flexibility, and growing competition.

Overall, first-quarter 2025 earnings of the consumer discretionary sector are expected to increase 0.8% year over year in the first quarter of 2025 compared with 19% growth in the prior quarter. Revenues are anticipated to rise 1.1% compared with growth of 2.8% in the fourth quarter of 2024.

Sneak Peek Into Upcoming Earnings Releases

Here are four bundled consumer discretionary stocks scheduled to announce results on May 8.

Planet Fitness is scheduled to report first-quarter 2025 results before the opening bell. The company has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — which increases the odds of an earnings beat.

PLNT has an Earnings ESP of +0.71% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Planet Fitness reported better-than-expected earnings in the trailing four quarters, the average being 10.2%. The Zacks Consensus Estimate for PLNT’s first-quarter 2025 revenues is pegged at $280.7 million, indicating growth of 13.2% from the year-ago reported figure. EPS is pegged at 62 cents, indicating an increase of 17% from the 53 cents reported in the year-ago quarter.

Peloton Interactive is scheduled to report third-quarter fiscal 2025 results before the opening bell. PTON is not likely to beat earnings estimates in the upcoming release as it has an Earnings ESP of 0.00% and a Zacks Rank #3. The company reported better-than-expected earnings in two of the trailing four quarters and missed on the remaining two occasions, the average surprise being 28.5%.

You can see the complete list of today’s Zacks Rank #1 stocks here.

The Zacks Consensus Estimate for Peloton Interactive’s third-quarter fiscal 2025 revenues is pegged at $619.7 million, indicating a decrease of 13.7% from the year-ago reported figure. The consensus Estimate for the loss per share is pegged at 6 cents, indicating an improvement from a loss of 45 cents incurred in the year-ago quarter.

Xponential Fitness is scheduled to report first-quarter 2025 results after the closing bell. XPOF is not likely to beat earnings estimates in the upcoming release as it has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell). The company’s earnings missed estimates in the trailing four quarters, the negative average surprise being 97.5%.

The Zacks Consensus Estimate for Xponential Fitness’ first-quarter 2025 revenues is pegged at $76.1 million, indicating a decrease of 4.3% from the year-ago reported figure. EPS is pegged at 15 cents, implying a decline of 6.3% from the 16 cents reported in the year-ago quarter.

PENN Entertainment is scheduled to report first-quarter 2025 results before the opening bell. PENN is not likely to beat earnings estimates in the upcoming release as it has an Earnings ESP of -25.68% and a Zacks Rank #3. The company reported better-than-expected earnings in two of the trailing four quarters and missed on the remaining two occasions, the average surprise being 1.6%.

The Zacks Consensus Estimate for PENN Entertainment’s first-quarter 2025 revenues is pegged at $1.7 billion, indicating growth of 5.9% from the year-ago reported figure. The Consensus Estimate for the loss per share is pegged at 29 cents, indicating an improvement from a loss of 79 cents incurred in the year-ago quarter.