Retailers are overhauling their operations as technology redefines the shopping experience. Digitization has been one of the keys to staying competitive against e-commerce rivals, a move that has enabled the industry to grow same-store sales. Consequently, retail stocks have climbed 10% over the past six months, nearly mirroring the S&P 500.

Although these companies have produced results lately, investors must be mindful as many companies in this space face structural headwinds. Taking that into account, here are three consumer stocks we’re swiping left on.

Floor And Decor (FND)

Market Cap: $6.88 billion

Operating large, warehouse-style stores, Floor & Decor (NYSE: FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.

Why Are We Out on FND?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
2. Incremental sales over the last three years were much less profitable as its earnings per share fell by 8.3% annually while its revenue grew
3. Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging

Floor And Decor is trading at $63.84 per share, or 31.8x forward P/E. Check out our free in-depth research report to learn more about why FND doesn’t pass our bar.

Zumiez (ZUMZ)

Market Cap: $446.6 million

With store associates called “Zumiez Stash Members”, Zumiez (NASDAQ: ZUMZ) is a specialty retailer of street and skate apparel, footwear, and accessories.

Why Do We Avoid ZUMZ?

1. Reduction in its number of stores signals a focus on profitability through targeted consolidation
2. Historical operating margin losses point to an inefficient cost structure
3. Earnings per share have contracted by 39.7% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance

At $26.35 per share, Zumiez trades at 28.6x forward P/E. Read our free research report to see why you should think twice about including ZUMZ in your portfolio.

GameStop (GME)

Market Cap: $9.28 billion

Drawing gaming fans with demo units set up with the latest releases, GameStop (NYSE: GME) sells new and used video games, consoles, and accessories, as well as pop culture merchandise.

Why Do We Steer Clear of GME?

1. GameStop’s brick-and-mortar engine keeps stalling as gamers migrate to digital downloads, and management is closing more outlets after shuttering hundreds of stores last year
2. The share price remains an unpredictable meme-stock roller-coaster, and the purchase of thousands of Bitcoins have fueled huge swings
3. On the bright side, the company has a large cash pile that gives CEO Ryan Cohen room to buy more Bitcoin or fund its collectibles and trading-card push

GameStop’s stock price of $20.75 implies a valuation ratio of 24.3x forward P/E. Dive into our free research report to see why there are better opportunities than GME.

Stocks We Like More

Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.