Wall Street has maintained its impressive run seen over the last two years in 2025 as well. However, the consumer staples sector has failed to participate in this year’s rally. Year to date, the Consumer Staples Select Sector SPDR (XLP) is the only sector out of 11 broad-sectors of the S&P 500 Index that is trading in the red with a loss of 1.7%.

The consumer staples sector faces headwinds from rising living costs, which strain household budgets and lead to more cautious consumer spending. As a result, the sector is experiencing margin compression.

Despite this poor show, a handful of consumer staples stocks with a favorable Zacks Rank have the potential to perform well in 2026 and stabilize one’s portfolio returns. Five such stocks are: PepsiCo Inc. (PEP Quick QuotePEP - Free Report) , Monster Beverage Corp. (MNST Quick QuoteMNST - Free Report) , Lamb Weston Holdings Inc. (LW Quick QuoteLW - Free Report) , United Natural Foods Inc. (UNFI Quick QuoteUNFI - Free Report) and Ollie's Bargain Outlet Holdings Inc. (OLLI Quick QuoteOLLI - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The chart below shows the price performance of our five picks year to date.

Image Source: Zacks Investment Research

PepsiCo Inc.

Zacks Rank #2 PepsiCo has been benefiting from strong international and North America beverage performance. International beverage revenues rose due to standout performances in markets like Mexico, Brazil, Germany and Thailand. 

On the convenient foods side, volume growth accelerated, led by markets such as India, Egypt, and Brazil. PEP remains focused on localizing flavor, expanding price-pack options for value-conscious consumers, and scaling global partnerships like its Formula 1 deal.

PEP’s focus on productivity and digital transformation remains a cornerstone of its long-term strategy to enhance efficiency, fund innovation, and support margin expansion. PEP continues to advance its multi-year, enterprise-wide productivity initiatives, which are fueled by automation, standardization, and increased adoption of digital tools and data analytics. 

PepsiCo has an expected revenue and earnings growth rate of 3.3% and 5.6%, respectively, for next year. The Zacks Consensus Estimate for next year’s earnings has improved 0.2% over the last 30 days.

Monster Beverage Corp.

Zacks Rank #1 Monster Beverage has been benefiting from the expansion of the energy drinks market and product launches, reinforcing its category strength. MNST continues to benefit from constant growth in the global energy drink market, backed by strong demand across convenience stores and other key retail channels. 

In third-quarter 2025, the Monster Energy Drinks segment's sales grew 16% on a currency-adjusted basis. Improving margins, supported by easing supply-chain pressures and lower costs, have contributed to MNST’s financial stability.

Monster Beverage has an expected revenue and earnings growth rate of 9.3% and 12.8%, respectively, for next year. The Zacks Consensus Estimate for next year’s earnings has improved 1.8% over the last seven days.

Lamb Weston Holdings Inc.

Zacks Rank #1 Lamb Weston’s “Focus to Win” strategy is fueling growth by emphasizing strong execution, customer engagement and innovation. LW is improving operational efficiency while expanding its presence across key channels in North America and international markets. 

LW’s restructuring and cost-saving initiatives are progressing as planned. At the same time, ongoing investments in capacity, modernization and sustainability are strengthening LW’s long-term competitiveness. 

Innovation continues to drive growth, highlighted by new product launches and expanded global capabilities. LW also delivers consistent value to its shareholders through dividends and share repurchases. We expect volume to rise 4.1% year over year in fiscal 2026.

Lamb Weston Holdings has an expected revenue and earnings growth rate of 1.3% and -6.3%, respectively, for the current year (ending May 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 9.4% over the last 60 days.

United Natural Foods Inc.

Zacks Rank #1 United Natural Foods has continued to demonstrate strong growth and operational discipline, supported by wholesale momentum and sustained demand for natural and organic products. Strategic initiatives like customer base expansion, network optimization, and lean management practices have driven efficiency gains, cost savings, and improved service quality. 

UNFI posted impressive third-quarter fiscal 2025 results, beating revenue and earnings estimates and marking seven straight quarters of adjusted EBITDA growth. With lean-management initiatives expanding across its network and ongoing customer-support efforts, UNFI is committed to long-term value creation. UNFI's natural and organic business continues to exhibit impressive growth, backed by heightened consumer demand for healthier and more sustainable products.

United Natural Foods has an expected revenue and earnings growth rate of 2.5% and more than 100%, respectively, for the current year (ending July 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 24.2% over the last 60 days.

Ollie's Bargain Outlet Holdings Inc.

Zacks Rank #2 Ollie's Bargain Outlet business operating model of buying cheap and selling cheap, cost-containment efforts, focus on store productivity, and expansion of the customer reward program, Ollie’s Army, reinforces its position. 

OLLI stands to benefit from a robust closeout market and trade-down trends, while strategic investments in supply-chain capacity and disciplined real estate expansion support sustainable growth. We expect a 16.2% adjusted earnings per share improvement in fiscal 2025 on 16.3% revenue growth, driven by brand-name merchandise at compelling discounts that resonate with value-seeking consumers.

OLLI remains committed to its long-term expansion strategy, aiming to have more than 1,300 stores. OLLI has consistently expanded its store network, achieving an impressive CAGR of 9.5%, growing from 388 stores in fiscal 2020 to 559 stores in fiscal 2024. Notably, in the past two fiscal years, OLLI opened 50 and 45 stores, respectively. Looking into fiscal 2025, the company plans to open 85 new stores, up from its prior target of 75.

Ollie's Bargain Outlet Holdings has an expected revenue and earnings growth rate of 13.7% and 15.3%, respectively, for next year (ending January 2027). The Zacks Consensus Estimate for next year’s earnings has improved 0.2% over the last 30 days.