The Motley Fool·2025-10-24 07:20Core Viewpoint - The article highlights compelling investment opportunities in consumer discretionary stocks, particularly in retail, despite a tech-driven bull market overshadowing them [1] Group 1: Lululemon Athletica - Lululemon Athletica's shares have declined significantly this year due to weakening sales trends, but this does not reflect poorly on the brand itself [3][6] - The stock trades at a forward price-to-earnings multiple of 13, indicating potential value for investors, especially as Lululemon has been growing faster than Nike [3] - Lululemon has a market capitalization of $21 billion, operates 784 stores globally, and has tripled its sales over the last six years [5] - The company has a strong customer base with 30 million members in its program, and international sales, particularly in China, are expected to grow by 20% to 25% next quarter [5][6] Group 2: RH (Restoration Hardware) - RH is positioned to benefit from a potential rebound in the housing market as the Federal Reserve lowers interest rates, making it a strategic investment for 2026 [7] - The company caters to higher-income clients and has expanded into lifestyle branding, including hospitality and luxury services [8] - RH has a market capitalization of $3 billion and reported an 8.4% year-over-year revenue growth in the second quarter, with a 21% increase in demand on a two-year basis [10] - The company has successfully expanded into less populated areas, with a remote gallery in England driving a 76% increase in demand [11] - The stock is trading at a forward P/E of 20 and is down 75% from its previous peak, suggesting it may be undervalued relative to future growth opportunities [12]