3 Consumer Discretionary Stocks Worth Watching: American Eagle, Under Armour, and Bath & Body Works

Core Insights - Consumer discretionary stocks are facing a challenging environment with weakened consumer spending, prompting companies to focus on turnarounds and cost management [1] Group 1: Bath & Body Works - Q4 revenue decreased by 2.26% year-over-year to $2.724 billion, with EPS of $2.05, slightly beating the estimate of $2.04 [1] - FY2026 guidance indicates a revenue decline of 4.5% to 2.5%, down from $7.291 billion in FY2025, and adjusted EPS guidance is lowered to $2.40 to $2.65 from $3.21 [1] - The stock dropped 15.75% following the results, but the company generated approximately $600 million in free cash flow for FY2026 and saw international revenue grow by 8.6% [1] Group 2: Under Armour - Q3 FY2026 adjusted EPS was $0.09, beating the estimate of -$0.01, while revenue of $1.328 billion was down 5.23% year-over-year but exceeded estimates by 1.22% [1] - The company reported a net loss of $430.8 million due to various charges, but adjusted EPS guidance was raised from $0.03-$0.05 to $0.10-$0.11 [1] - International growth was notable, with EMEA growing by 6% and Latin America by 19.7%, indicating potential for recovery [1] Group 3: American Eagle Outfitters - Q4 FY2026 revenue increased by 9.73% year-over-year to $1.76 billion, with EPS of $0.84, surpassing the estimate of $0.72 [1] - The Aerie segment was a significant growth driver, with revenue up 26.7% to $683.8 million and comparable sales growing by 23% [1] - The company returned $256 million in buybacks and $85 million in dividends to shareholders in FY2025, indicating a shareholder-friendly approach [1]