If you're like me, you probably hate paying full price for anything -- including stocks. Fortunately, now's a great time to look for bargains. Stock sell-offs often get overdone, and these dips can present compelling value opportunities for long-term investors.
To be sure, a sharply lower stock price is only a starting point for further research, and value hunters must still understand why the decline happened, what management is doing to restore performance, and if the prevailing headwinds are changing.
Below, I highlight three consumer-focused, household names in the S&P 500 that are down more than 30% so far this year, yet still have structural strengths and other catalysts that could reward patient investors.
1. Lululemon Athletica
From an all-time high in late 2023 to a five-year low last week, shares of Lululemon (LULU 0.03%) have literally been cut in half, earning them the dubious honor of being among the worst performers in the S&P 500 this year.
The brand is still hugely popular, and profitable, but concerns about tariffs, slowing domestic growth and rising competition from the likes of Nike, Adidas and Athleta have clearly spooked investors.
Image source: Getty Images.
CEO Calvin McDonald acknowledged tariffs on the first-quarter conference call with analysts, saying Lululemon's industry-leading margins and strong balance sheet with $1.3 billion in cash and no debt, provides the Vancouver-based retailer with significant financial flexibility -- including the ability to keep investing and manage costs associated with tariffs.
Beyond brand loyalty and continued category leadership, the stock is trading at a forward price-to-earnings ratio of 13 times estimated earnings, compared to about 40 for most of the past decade.
To be sure, some would argue that this "downward dog" saw its best days in the early pandemic days of casual/work from home attire, and they may be right, but I see lots of promise.
What I'm looking for is more international expansion, especially in China and other underpenetrated markets outside North America, as well as renewed product innovation (both men's and women's ) fueled by a debt-free balance sheet and strong free cash flow.
There's also the reality of an aggressive ongoing share repurchase program that not only reflects management's view that the stock is undervalued, but could boost earnings per share.
2. Deckers Outdoor
Deckers Outdoor (DECK 0.50%) is trading about 50% below its all-time high hit in late January, however, its recent fiscal Q1 results, reported July 24, show a business that's still firing on all cylinders.
According to Stefano Caroti, the CEO of the California-based footwear, apparel, and accessories maker, in the first-quarter earnings release and on the call with analysts, Hoka had its largest quarter in history, while it and Ugg both beat expectations thanks to market share gains and full-price selling. As a result, revenue was up 17% year over year, with international sales up nearly 50%, which greatly offset U.S. softness.
For value-oriented investors, the setup is compelling: Deckers is debt-free, has cash and cash equivalents of $1.7billion, and is producing strong free cash flow. CFO Steven Fasching told investors on the Q1 call that the company was still awaiting final details on tariffs, but assuming the rate on products from Vietnam doubled to 20%, Deckers would face a $185 million impact, up from initial estimate of $150 million, half of which had already been recaptured. Plus, he said, the company had "not seen any material changes to our order book" as a result of recent price increases.
Contrast Decker's global growth potential with the market's markdown of this struggling S&P 500 member, and you could be looking at another opportunity to own a high-quality footwear and accessories franchise at what could be a temporary discount, supported by international expansion, brand momentum, and disciplined execution.
3. CarMax
At the risk of sounding like a used-car salesman, if I offered you a chance to own a piece of a company that sold more secondhand cars and trucks than anyone else in the country -- and marked down the price by 35% -- would you buy it?
Of course I am talking about CarMax (KMX 0.13%), the largest used-car retailer in the U.S., which has been hit hard in 2025, with shares down about 30% year to date. The culprit: a sluggish used-car market pressured by elevated prices and interest rates, tighter consumer credit, and softer demand. That's a tough cocktail for a business that runs 250 retail stores and an $18 billion loan portfolio.
CarMax CEO Bill Nash said in the Q1 earnings release that the company's mix of stores, technology, and digital capabilities were the key differentiator in a very large and fragmented market, adding that it would "drive sales, gain market share, and deliver significant year-over-year earnings growth for years to come."
For value hunters, the story is about what happens when the cycle turns. While costs rose 3.3% in Q1, Carmax said selling, general, and administrative costs as a percent of gross profit improved to 73.8% from 80.6% a year ago, helped in part by an 8.1% increase in sales at existing stores.
If interest rates begin to ease and consumer confidence improves, CarMax's earnings power could surprise to the upside -- making today's markdown an attractive entry point for patient investors.
Beaten-down stocks worth looking at
Sell-offs can be unsettling, but they also create opportunities for value-minded investors. Like most consumer-related names, Lululemon, Deckers, and CarMax are clearly facing headwinds that have weighed on their shares. Even so, all three still have the brand strength and growth potential needed to recover. Buying quality at a discount takes patience, but history shows it can be one of the market's most rewarding strategies, and right now, these stocks are trading at clearance sale prices.
