Consumer Stocks to Avoid: Kellanova, SunOpta, and TreeHouse Foods.

Consumer staples stocks have underperformed the S&P 500 over the past six months, with the industry recording a 3.4% loss. Three consumer stocks that concern us are Kellanova (K), SunOpta (STKL), and TreeHouse Foods (THS). These companies face challenges such as shrinking unit sales, declining earnings per share, and low gross margins. Kellanova trades at 20.9x forward P/E, SunOpta at 25.7x, and TreeHouse Foods at 19.4x.

Consumer staples stocks have been underperforming the S&P 500 over the past six months, with the industry recording a 3.4% loss. Three notable consumer stocks, Kellanova (K), SunOpta (STKL), and TreeHouse Foods (THS), are facing significant challenges such as shrinking unit sales, declining earnings per share, and low gross margins. These companies trade at forward P/E ratios of 20.9x, 25.7x, and 19.4x, respectively.

Procter & Gamble (PG), the world's largest consumer products maker, closed the most recent trading day at $157.35, down 1.32% from the previous session. While the stock has climbed by 2.82% in the past month, it remains behind the S&P 500's daily gain of 0.3% and the Dow's loss of 0.48%. The company is expected to report earnings on October 24, 2025, with analysts predicting an EPS of $1.91, a 1.04% decline from the same quarter last year. The full-year EPS estimate is $6.99 per share, indicating a 2.34% increase from last year.

Investors should also monitor any changes in analyst estimates for Procter & Gamble, as these adjustments often reflect short-term business patterns and can influence stock price performance. Procter & Gamble is currently rated as a 'Hold' by the Zacks Rank, with a Forward P/E ratio of 22.82 and a PEG ratio of 4.21.

Meanwhile, Estee Lauder Companies (ELC) is investing heavily in India to capture the growing demand for luxury products at affordable price points. The company's president and CEO, Stéphane de La Faverie, announced a 'massive investment' in India during the Barclays Consumer Staples conference. India, with a market size valued at $28 billion in 2024, is a key growth market for ELC. The company aims to expand its presence in the mass luxury segment, where 90% of the market is mass and 10% is prestige.

Emerging markets like India, Japan, and Korea are set to contribute 15-16% of ELC's global business in the foreseeable future, led by India. The company's focus on these markets comes as sales in Europe and the Americas face headwinds due to consumption slowdowns. Despite the challenges, ELC saw a 13% year-on-year decline in fourth-quarter organic sales, primarily due to weakness in the US and China markets.

These strategic moves by Procter & Gamble and Estee Lauder highlight the industry's efforts to navigate challenges and capitalize on growth opportunities in emerging markets. However, investors should remain vigilant and monitor the companies' performance closely.