In this article, we will take a look at the 13 Best Consumer Discretionary Stocks To Buy Now.
Over the past year, the S&P 500 Consumer Discretionary Index has outperformed the S&P 500 Index, rising 16.98%. Companies in this sector of the stock market produce goods that consumers might not need but highly desire. As a result, unlike the consumer staples industry, companies that provide goods and services that are subject to discretionary expenditure can (and do) face significant swings in demand.
According to a New York Federal Reserve study, the cyclical sectors are benefiting from a reduction in inflation concerns among typical consumers as a result of President Trump’s decision to reverse some of his more aggressive trade policies. As markets rise on better optimism around trade, investors are growing more upbeat with a rising risk appetite.
While respondents did forecast food prices growing by 5.5% over the next year, a 0.4 percentage point increase from May and the highest since October 2023, the Fed survey revealed expectations were down across most price groups. In other areas, respondents saw gas price increases slowing to 2.7%, a decrease of 0.8 percentage points.
Employment also showed improvement, with those who anticipated losing their jobs in the next 12 months falling half a percentage point to 14.8%. Additionally, there was hope in other areas, as the likelihood of missing a minimum debt payment for the next three months dropped by half a point to 13.4%, the lowest level since January.
Our Methodology
To compile our list of the best consumer discretionary stocks to buy, we started with a list of U.S.-listed companies in the industry with strong fundamentals. We then ranked them according to the number of hedge funds that held stakes in them as of the first quarter of 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
13. Darden Restaurants, Inc. (NYSE:DRI)
Number of Hedge Fund Holders: 36
Darden Restaurants, Inc. (NYSE:DRI) ranks among the best consumer discretionary stocks to buy now. Following solid quarterly results on June 20, Darden Restaurants, Inc. (NYSE:DRI) projects annual same-store sales above expectations, relying on demand from food delivery and marketing initiatives at its casual dining brands like Olive Garden.
Darden (NYSE:DRI) anticipates a 2% to 3.5% annual growth in same-store sales, with the midpoint of this range exceeding analysts’ projections of 2.64%. Additionally, initiatives like Olive Garden’s “buy one, take one” deals and home deliveries made possible by Uber Direct have further assisted the restaurant chain operator.
In addition, the company disclosed plans to explore strategic alternatives for its Bahama Breeze brand while also announcing a new $1 billion share repurchase program.
Darden Restaurants, Inc. (NYSE:DRI) is an American multi-brand restaurant operator headquartered in Orlando, Florida. Some of the most well-known and successful full-service dining brands can be found in Darden’s restaurant family, including Yard House, LongHorn Steakhouse, and Olive Garden.
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