Chicago, IL – March 19, 2025 – Today, Zacks Investment Ideas feature highlights e.l.f. Beauty ELF, Abercrombie & Fitch ANF and NIKE NKE.
Are These 3 Beaten-Down Consumer Stocks Worth a Look?
Many consumer-facing stocks – e.l.f. Beauty, Abercrombie & Fitch and NIKE – have faced pressure over recent weeks, with economic developments and tariff talks causing considerable selling pressure.
But is the negativity warranted? Let’s take a closer look at how each stacks up.
ELF Shares Plunge
ELF shares have been decimated over the past year, down more than 60% and widely underperforming relative to the S&P 500. Quarterly results haven’t been enough to perk shares up, with a growth cooldown driving the negative sentiment.
While sales growth is still strong, the cooldown has been the bigger story here, helping explain the sharp drop in shares. But while the growth has slowed, the margins picture has largely remained highly-positive.
But the largest factor weighing on the stock’s near-term performance is its cloudy earnings outlook, with the stock sporting an unfavorable Zacks Rank #5 (Strong Sell). While the ‘dip’ may be enticing, investors would be best suited being patient until positive earnings estimate revisions hit the tape, which would reflect a bullish change in sentiment.
ANF Provides Soft Outlook
Though the bulk of the decline has occurred in 2025, ANF shares are down nearly 40% over the last year, with its latest set of quarterly results getting met with heavy selling pressure. A growth slowdown has similarly been a thorn in the side of the company, with its latest guidance not instilling much optimism.
Analysts have accordingly adjusted their earnings expectations following the softer-than-expected guidance.
The top line growth cooldown, like ELF, can be seen in the chart below, which tracks the YoY % change in sales over recent periods. The cooldown can also be seen in consensus expectations for its current fiscal year, which currently forecast 3.5% EPS growth on 4.5% higher sales, a far cry from the 15.8% sales growth pace in its previous year.
NIKE Sales Remain Stagnant
NIKE’s performance on headline numbers jumps out over recent quarters, with the company’s top line primarily remaining stagnant and showing little growth.
The EPS outlook for NIKE also continues to be unfavorable, with analysts revising their expectations lower across the board over recent months. Keep in mind that the company is scheduled to report its quarterly results this week on March 20th, after the close.
The current Zacks Consensus estimate of $0.28 per share reflects a 71% decline from the year-ago period.
Sales revisions for the upcoming release have also been modestly bearish, with the $11.1 billion in sales expected down modestly over recent months and suggesting an 11% decline year-over-year. The company was seemingly caught off guard with the wrong type of inventory in its post-pandemic era, struggling to capture consumers’ evolving wants.
Bottom Line
All three stocks above have faced considerable selling pressure over recent months, with downward revisions stemming from growth cooldowns reflecting one of the major reasons.
While buying the ‘dip’ on beaten-down stocks is always an intriguing idea, investors would be better off waiting for positive earnings estimate revisions to begin hitting the tape, signaling a meaningful change in sentiment.
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