3 Leisure & Recreation Products Stocks to Watch Amid Industry Woes

Industry Overview - The Zacks Leisure and Recreation Products industry includes companies that provide a variety of recreational products and services, including amusement products, swimming pools, marine products, and outdoor equipment [2] - The industry's performance is closely tied to economic growth, consumer demand, and disposable income levels [2] Current Challenges - The industry is currently facing challenges due to high inflation and elevated interest rates, which have impacted consumer spending [3] - In April, consumer spending unexpectedly halted, influenced by ongoing inflation and high borrowing costs [3] Sales Trends - Despite challenges, there is a positive trend in sales of fitness products driven by increased health awareness and strong demand for boating products [1] - New boat sales are expected to maintain volumes consistent with 2023 levels, despite higher interest rates [4] - The golf industry has seen significant growth, with rising demand for golf equipment due to technological advancements and increased participation among younger demographics [5] Industry Performance - The Zacks Leisure and Recreation Products industry has underperformed the S&P 500, with a collective drop of 4.5% over the past year compared to the S&P 500's increase of 26.4% [8] - The industry's Zacks Industry Rank is 173, placing it in the bottom 31% of over 250 Zacks industries, indicating a negative earnings outlook [6][7] Valuation Metrics - The industry trades at a forward price-to-earnings ratio of 24.41X, higher than the S&P 500's 21.21X and the sector's 17.99X [9] Company Highlights - Lazydays Holdings, Inc. (GORV): Expected to see sales growth of 7.5% and earnings growth of 62.1% in 2024, with a recent stock increase of 4.6% [11] - Acushnet Holdings Corp. (GOLF): Anticipated sales growth of 4.1% and earnings growth of 5.8% in 2024, with a stock increase of 38.3% over the past year [14] - American Outdoor Brands, Inc. (AOUT): Projected sales growth of 4.6% and earnings growth of 77.1% in fiscal 2025, despite a stock decline of 3.8% in the past year [15]