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5 Consumer Discretionary Stocks to Buy Despite the Sector's Bloodbath
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Key Takeaways
Ralph Lauren benefits from digital investments and its Drive Plan, supporting sales and engagement growth.
Hasbro and Fox are gaining from gaming, streaming, sports and advertising momentum, lifting outlooks.
H World Group and WMG project strong earnings growth, with estimates rising in recent months.
The consumer discretionary sector has witnessed moderate growth in the past year, despite a strong rally in U.S. stock markets. The situation has aggravated as the sector is in the negative on a year-to-date basis.
Structurally, the consumer discretionary sector is growth-oriented. The share prices of these companies grow over a long time period. Growth sectors are sensitive to the movement of market interest rates and are inversely related.
Over the last two years, the Fed opted for easy monetary policies with a significant cut in the benchmark lending rate. However, market participants are uncertain about the trajectory of interest rates this year. Moreover, geopolitical conflicts and the breakout of war in the Middle East also affected growth stocks.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
Ralph Lauren Corp.
Zacks Rank #2 Ralph Lauren has benefited from the strategic execution of its “Next Great Chapter: Drive Plan” and robust financial performance. The plan focuses on brand elevation, consumer centricity and operational agility.
RL’s digital transformation drives growth, with investments in personalization, mobile, omnichannel and fulfillment enhancing consumer engagement. Retail and wholesale remain the key pillars of RL, with flagship stores, premium distribution and partnerships boosting comparable store sales across North America, Europe and Asia in fourth-quarter fiscal 2026.
Ralph Lauren has an expected revenue and earnings growth rate of 6.7% and 10.5%, respectively, for the current year (ending March 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.2% over the last seven days.
Hasbro Inc.
Zacks Rank #1 Hasbro has benefited from solid growth in Wizards and Digital Gaming revenues. HAS benefits to a big extent by continued MAGIC: The Gathering momentum, backlist demand and distribution gains, while Consumer Products delivered point-of-sale growth and share gains despite tougher licensing comparisons.
For 2026, HAS targets stronger fan engagement, new partnerships, and steady progress toward a more digital and IP-focused business. HAS’ cost transformation program continues to support margin resilience while the company invests in key brands.
Hasbro has an expected revenue and earnings growth rate of 5.9% and 8.5%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.8% over the last seven days.
Fox Corp.
Zacks Rank #1 Fox offers a differentiated mix of live news and marquee sports that supports affiliate pricing leverage and steady advertising demand. FOXA’s Tubi is boosting engagement and revenues while maintaining an ad-led model that has run at breakeven or better, improving the risk profile of streaming exposure.
FOX One broadens distribution to cord-cutters with early retention trends that appear additive rather than disruptive to the traditional bundle. Ongoing global soccer and the political cycle should add FOXA’s incremental audience and advertising opportunities across broadcast, cable and digital.
Fox has an expected revenue and earnings growth rate of 5% and 16.3%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 2.3% over the last seven days.
H World Group Ltd.
Zacks Rank #2 H World Group is involved in the hotel industry. HTHT’s business includes leased and owned, manachised and franchised models.
HTHT’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels.
H World Group has an expected revenue and earnings growth rate of 10.4% and 19.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 3.9% over the last 90 days.
Warner Music Group Corp.
Zacks Rank #1 Warner Music Group is a music-based content company. WMG’s operating segment consists of Recorded Music and Music Publishing. The Recorded Music segment is involved in the discovery and development of recording artists. The Music Publishing segment owns and acquires rights. WMG operates principally in the United States, the United Kingdom and internationally.
Warner Music Group has an expected revenue and earnings growth rate of 7.6% and more than 100%, respectively, for the current year (ending September 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 8.6% over the last 60 days.
View the Zacks #1 Rank List
Image: Bigstock
5 Consumer Discretionary Stocks to Buy Despite the Sector's Bloodbath
Key Takeaways
The consumer discretionary sector has witnessed moderate growth in the past year, despite a strong rally in U.S. stock markets. The situation has aggravated as the sector is in the negative on a year-to-date basis.
Structurally, the consumer discretionary sector is growth-oriented. The share prices of these companies grow over a long time period. Growth sectors are sensitive to the movement of market interest rates and are inversely related.
Over the last two years, the Fed opted for easy monetary policies with a significant cut in the benchmark lending rate. However, market participants are uncertain about the trajectory of interest rates this year. Moreover, geopolitical conflicts and the breakout of war in the Middle East also affected growth stocks.
Despite these negatives, we have selected five consumer discretionary stocks with a favorable Zacks Rank for investment. These are: Ralph Lauren Corp. (RL - Free Report) , Hasbro Inc. (HAS - Free Report) , Fox Corp. (FOXA - Free Report) , H World Group Ltd. (HTHT - Free Report) and Warner Music Group Corp. (WMG - 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 in the past month.
Image Source: Zacks Investment Research
Ralph Lauren Corp.
Zacks Rank #2 Ralph Lauren has benefited from the strategic execution of its “Next Great Chapter: Drive Plan” and robust financial performance. The plan focuses on brand elevation, consumer centricity and operational agility.
RL’s digital transformation drives growth, with investments in personalization, mobile, omnichannel and fulfillment enhancing consumer engagement. Retail and wholesale remain the key pillars of RL, with flagship stores, premium distribution and partnerships boosting comparable store sales across North America, Europe and Asia in fourth-quarter fiscal 2026.
Ralph Lauren has an expected revenue and earnings growth rate of 6.7% and 10.5%, respectively, for the current year (ending March 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.2% over the last seven days.
Hasbro Inc.
Zacks Rank #1 Hasbro has benefited from solid growth in Wizards and Digital Gaming revenues. HAS benefits to a big extent by continued MAGIC: The Gathering momentum, backlist demand and distribution gains, while Consumer Products delivered point-of-sale growth and share gains despite tougher licensing comparisons.
For 2026, HAS targets stronger fan engagement, new partnerships, and steady progress toward a more digital and IP-focused business. HAS’ cost transformation program continues to support margin resilience while the company invests in key brands.
Hasbro has an expected revenue and earnings growth rate of 5.9% and 8.5%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.8% over the last seven days.
Fox Corp.
Zacks Rank #1 Fox offers a differentiated mix of live news and marquee sports that supports affiliate pricing leverage and steady advertising demand. FOXA’s Tubi is boosting engagement and revenues while maintaining an ad-led model that has run at breakeven or better, improving the risk profile of streaming exposure.
FOX One broadens distribution to cord-cutters with early retention trends that appear additive rather than disruptive to the traditional bundle. Ongoing global soccer and the political cycle should add FOXA’s incremental audience and advertising opportunities across broadcast, cable and digital.
Fox has an expected revenue and earnings growth rate of 5% and 16.3%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 2.3% over the last seven days.
H World Group Ltd.
Zacks Rank #2 H World Group is involved in the hotel industry. HTHT’s business includes leased and owned, manachised and franchised models.
HTHT’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels.
H World Group has an expected revenue and earnings growth rate of 10.4% and 19.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 3.9% over the last 90 days.
Warner Music Group Corp.
Zacks Rank #1 Warner Music Group is a music-based content company. WMG’s operating segment consists of Recorded Music and Music Publishing. The Recorded Music segment is involved in the discovery and development of recording artists. The Music Publishing segment owns and acquires rights. WMG operates principally in the United States, the United Kingdom and internationally.
Warner Music Group has an expected revenue and earnings growth rate of 7.6% and more than 100%, respectively, for the current year (ending September 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 8.6% over the last 60 days.