Earnings Volatility and Value in Consumer Defensive Stocks: A Pre-Market Analysis of DLTR, CPB, M, and REVG

In the volatile landscape of consumer defensive stocks, contrarian value investors often seek opportunities where market pessimism underprices strong fundamentals or where earnings resilience defies sector trends. As of September 2025, four names—Dollar Tree (DLTR), Campbell Soup (CPB), Macy’s (M), and Revlon (REVG)—stand out for their divergent earnings trajectories and valuation metrics. This analysis evaluates their potential through the lens of contrarian value investing, focusing on earnings volatility, P/E ratios, and sector positioning.

Dollar Tree (DLTR): A Tale of Contradictions

Dollar Tree’s Q2 2026 earnings are projected to decline 44.8% year-over-year to $0.37 per share, with revenue expected to drop 39.6% to $4.45 billion [3]. However, the company’s trailing P/E ratio of 21.16 and forward P/E of 20.66 [4] suggest a valuation discount relative to the consumer defensive sector’s 27.80 industry average [1]. This discrepancy hints at a potential mispricing, particularly given DLTR’s Q1 2026 performance, where it exceeded estimates with $1.26 per share in earnings [2].

The key question for investors is whether DLTR’s recent same-store sales growth (6.5% in Q2 2025) and $19.3–$19.5 billion revenue guidance [3] signal a sustainable turnaround. While the company’s 2026 P/E of 19.92 [1] implies optimism about future earnings normalization, the risk of continued revenue contraction remains. For contrarians, DLTR’s valuation discount could represent a speculative opportunity if management executes on cost discipline and inventory optimization.

Campbell Soup (CPB): A Moderately Valued Staple

Campbell Soup’s Q2 2025 results revealed a mixed bag: net sales rose 9% to $2.7 billion due to the Sovos Brands acquisition, but organic sales fell 2% [1]. Adjusted EBIT of $372 million and a forward P/E of 9.41 [1] position CPB as a moderately valued player in the consumer staples sector. Its trailing P/E of 21.13 [3] contrasts sharply with forward guidance of $2.95–$3.05 in adjusted EPS for 2025 [1], suggesting the market is pricing in a near-term earnings rebound.

CPB’s sector positioning is further bolstered by its lower P/E compared to peers like Mondelez International and Tyson Foods [2]. However, the company’s reliance on inorganic growth (via Sovos) and its 8% adjusted EPS decline in Q2 2025 [1] highlight structural challenges. For value investors, CPB’s valuation appears reasonable but not compelling unless organic sales momentum improves.

Macy’s (M): A Deep-Value Bargain Amid Retail Woes

Macy’s Q2 2025 results showcased a rare bright spot in the retail sector: net sales of $4.8 billion exceeded guidance and analyst estimates, while adjusted EPS of $0.41 beat expectations [1]. Despite a 2.5% year-over-year sales decline, the company’s 0.8% comparable sales growth and $100 million in shareholder returns [1] underscore its operational resilience.

Macy’s 2026 P/E of 7.31 [1]—a 54% discount to the sector’s 15.80 average—positions it as a deep-value play. This valuation discount reflects broader retail sector pessimism, yet Macy’s raised 2025 guidance to $21.15–$21.45 billion in sales and $1.70–$2.05 in adjusted EPS [2]. For contrarians, the stock’s low P/E and improving cash flow (ending the quarter with $829 million in cash [1]) suggest a compelling risk/reward profile, particularly if the company continues to reduce debt and optimize gross margins.

Revlon (REVG): A Growth Premium or Overvaluation?

Revlon’s Q2 2025 performance was a standout: net sales rose 7.7% to $629.1 million, driven by a 12.2% growth in its high-margin Specialty Vehicles segment [1]. Adjusted EBITDA of $58.9 million and $0.70 in adjusted EPS [1] reflect operational strength, with full-year guidance of $200–$220 million in adjusted EBITDA [2].

However, REVG’s 2025 P/E of 23.44 [1]—a 39% premium to the sector’s 16.80 average—raises questions about sustainability. While the company’s focus on fire apparatus and ambulance units has insulated it from broader RV sector declines [2], its Recreational Vehicles segment still fell 2.4% in Q2 2025 [1]. For value investors, REVG’s premium valuation may be justified if its niche segments continue to outperform, but the stock appears overvalued if growth slows.

Conclusion: Contrarian Opportunities in a Divergent Sector

The consumer defensive sector in 2025 presents a mosaic of opportunities and risks. Macy’s (M) emerges as the most compelling contrarian value play, with a deeply discounted P/E and improving operational metrics. Dollar Tree (DLTR) offers a speculative bet on a potential turnaround, while Campbell Soup (CPB) remains a moderate-value staple with mixed fundamentals. Revlon (REVG), though strong in earnings growth, trades at a premium that may not be justified unless its niche segments sustain momentum.

For investors with a contrarian mindset, the key is to balance valuation discounts with earnings visibility. As these companies report Q2 2026 results on September 3, 2025 [1], the market’s reaction to their guidance and operational updates will likely refine these investment theses.

**Source:[1] Pre-Market Earnings Report for September 3, 2025 [https://www.nasdaq.com/articles/pre-market-earnings-report-september-3-2025-dltr-cpb-m-revg-cxm-jill][2] Macy's: Fiscal Q2 Earnings Snapshot [https://www.marketscreener.com/news/macy-s-fiscal-q2-earnings-snapshot-ce7d59dad088f423][3] Dollar Tree, Inc. Reports Results for the Second Quarter Fiscal ... [https://finance.yahoo.com/news/dollar-tree-inc-reports-results-103000516.html][4] Dollar Tree PE Ratio 2010-2025 | DLTR [https://www.macrotrends.net/stocks/charts/DLTR/dollar-tree/pe-ratio]