MacroResearchBoard

U.S. Consumer Staples Are Not That Safe – May 5, 2025

A recent report argued that growth challenges, brand disruption, regulatory risks, and decelerating fundamentals make the consumer staples sector’s earnings less predictable than in prior years. 

Macro uncertainties amid rising global trade tensions have supported the year-to-date outperformance of U.S. consumer staples stocks. However, the move lacks fundamental support. The sector’s forward earnings momentum is poor.
Structural growth headwinds due to competition from private label brands and the migration of consumers towards healthier foods and beverages are likely to keep the relative fundamentals weak, absent a recession that pushes the equity market’s overall sales and earnings sharply lower.