EarningsGradeEarningsGrade

Consumer Cyclical — Earnings Quality Screening

248 Consumer Cyclical stocks screened with 18 forensic accounting checks

Grade Distribution

B: 13
C: 22
F: 200
A8 — Strong — minimal red flags
B13 — Good — generally healthy
C22 — Fair — some red flags
D5 — Weak — significant concerns
F200 — Fail — major red flags

Earnings Quality Characteristics in Consumer Cyclical

Consumer Cyclical companies — retailers, automakers, homebuilders, restaurants, and apparel brands — face earnings quality risks driven by inventory management, lease accounting, franchise model distortions, and pronounced seasonal revenue patterns. Inventory write-downs are a chronic issue: retailers may delay recognizing obsolete inventory to avoid margin hits, then take large "one-time" charges that were actually building for quarters. The adoption of ASC 842 lease accounting placed massive right-of-use assets and lease liabilities on balance sheets, fundamentally altering traditional leverage and asset quality metrics. Franchise-heavy businesses present their own distortion: franchisors report high-margin royalty revenue while the capital intensity sits at the franchisee level, making the franchisor look asset-light and profitable regardless of system-wide health. Seasonal revenue patterns in retail mean that quarter-to-quarter comparisons can be misleading without proper normalization. Our screening found 45 out of 56 consumer cyclical stocks received an F grade — the highest F-rate among major sectors — reflecting how cyclical downturns, inventory risks, and accounting complexity compound in this space.

Common Red Flags in Consumer Cyclical

  • ⚠Inventory growth outpacing cost of goods sold growth for multiple quarters, suggesting unsold stock accumulation
  • ⚠Right-of-use lease assets and liabilities distorting debt-to-equity ratios, masking true financial leverage
  • ⚠Franchise royalty revenue growing while same-store sales at franchisees are declining — a sign of system-level weakness hidden by the franchisor model
  • ⚠Frequent "non-recurring" restructuring and impairment charges that recur every year, used to manage reported earnings

All 248 Consumer Cyclical Stocks

AStrong — minimal red flags(8 stocks)

A
BKNGBooking Holdings Inc. Common St
A
CARGCarGurus, Inc.
A
DECKDeckers Outdoor Corporation
A
ETDEthan Allen Interiors Inc.
A
FLXSFlexsteel Industries, Inc.
A
MCRIMonarch Casino & Resort, Inc.
A
STRTSTRATTEC SECURITY CORPORATION
A
WSMWilliams-Sonoma, Inc.

BGood — generally healthy(13 stocks)

B
ABNBAirbnb, Inc.
B
BKEBuckle, Inc. (The)
B
ESCAEscalade, Incorporated
B
HVTHaverty Furniture Companies, In
B
LULUlululemon athletica inc.
B
LZBLa-Z-Boy Incorporated
B
MBUUMalibu Boats, Inc.
B
MCFTMasterCraft Boat Holdings, Inc.
B
MEDMEDIFAST INC
B
SGHCSuper Group (SGHC) Limited
B
SIGSignet Jewelers Limited
B
VCVisteon Corporation
B
ZUMZZumiez Inc.

CFair — some red flags(22 stocks)

C
AMZNAmazon.com, Inc.
C
ANFAbercrombie & Fitch Company
C
BSETBassett Furniture Industries, I
C
CALYCallaway Golf Company
C
FIGSFIGS, Inc.
C
GIIIG-III Apparel Group, LTD.
C
HBBHamilton Beach Brands Holding C
C
HYLNHyliion Holdings Corp.
C
KRTKarat Packaging Inc.
C
LOVEThe Lovesac Company
C
MOVMovado Group Inc.
C
NKENike, Inc.
C
RLRalph Lauren Corporation
C
ROSTRoss Stores, Inc.
C
RSIRush Street Interactive, Inc.
C
RVLVRevolve Group, Inc.
C
SKYChampion Homes, Inc.
C
THRMGentherm Inc
C
TSLATesla, Inc.
C
URBNUrban Outfitters, Inc.
C
WEYSWeyco Group, Inc.
C
XPELXPEL, Inc.

DWeak — significant concerns(5 stocks)

D
CVCOCavco Industries, Inc.
D
DASHDoorDash, Inc.
D
JAKKJAKKS Pacific, Inc.
D
LQDTLiquidity Services, Inc.
D
MLRMiller Industries, Inc.

FFail — major red flags(200 stocks)

F
AAPAdvance Auto Parts Inc.
F
ABGAsbury Automotive Group Inc
F
ACELAccel Entertainment, Inc.
F
ACVAACV Auctions Inc.
F
ADNTAdient plc
F
AEOAmerican Eagle Outfitters, Inc.
F
AINAlbany International Corporatio
F
ALHAlliance Laundry Holdings Inc.
F
AMBPArdagh Metal Packaging S.A.
F
AMCRAmcor plc
F
AMWDAmerican Woodmark Corporation
F
AOUTAmerican Outdoor Brands, Inc.
F
APTVAptiv PLC
F
ARHSArhaus, Inc.
F
ARKOARKO Corp.
F
ASOAcademy Sports and Outdoors, In
F
ATMUAtmus Filtration Technologies I
F
AVYAvery Dennison Corporation
F
AZOAutoZone, Inc.
F
BALLBall Corporation
F
BALYBally's Corporation
F
BARKBARK, Inc.
F
BBWBuild-A-Bear Workshop, Inc.
F
BBYBest Buy Co., Inc.
F
BHBiglari Holdings Inc.
F
BJRIBJ's Restaurants, Inc.
F
BLMNBloomin' Brands, Inc.
F
BNEDBarnes & Noble Education, Inc
F
BOOTBoot Barn Holdings, Inc.
F
BRCBBlack Rock Coffee Bar, Inc.
F
BRSLBrightstar Lottery PLC Trading
F
BZHBeazer Homes USA, Inc.
F
CAKEThe Cheesecake Factory Incorpor
F
CALCaleres, Inc.
F
CASYCaseys General Stores, Inc.
F
CBRLCracker Barrel Old Country Stor
F
CCLCarnival Corporation
F
CLARClarus Corporation
F
CMGChipotle Mexican Grill, Inc.
F
CNNECannae Holdings, Inc.
F
COOKTraeger, Inc.
F
CPRICapri Holdings Limited
F
CPSCooper-Standard Holdings Inc.
F
CRICarter's, Inc.
F
CRMTAmerica's Car-Mart, Inc.
F
CSVCarriage Services, Inc.
F
CTRNCiti Trends, Inc.
F
CURVTorrid Holdings Inc.
F
CVNACarvana Co.
F
CWHCamping World Holdings, Inc.
F
DANDana Incorporated
F
DBIDesigner Brands Inc.
F
DCHDauch Corporation
F
DFHDream Finders Homes, Inc.
F
DHID.R. Horton, Inc.
F
DINDine Brands Global, Inc. Common
F
DORMDorman Products, Inc.
F
DPZDomino's Pizza Inc
F
DRIDarden Restaurants, Inc.
F
DRVNDriven Brands Holdings Inc.
F
EATBrinker International, Inc.
F
EBAYeBay Inc.
F
ELAEnvela Corporation
F
EVGOEVgo Inc.
F
EXPEExpedia Group, Inc.
F
EYENational Vision Holdings, Inc.
F
FFord Motor Company
F
FFAIFaraday Future Intelligent Elec
F
FLWS1-800-FLOWERS.COM, Inc.
F
FNKOFunko, Inc.
F
FOXFFox Factory Holding Corp.
F
FTDRfrontdoor, inc.
F
FUNSix Flags Entertainment Corpora
F
FWRGFirst Watch Restaurant Group, I
F
GAMBGambling.com Group Limited
F
GBTGGlobal Business Travel Group, I
F
GCOGenesco Inc.
F
GDENGolden Entertainment, Inc.
F
GEFGreif Inc.
F
GMGeneral Motors Company
F
GOLFAcushnet Holdings Corp.
F
GPCGenuine Parts Company
F
GPIGroup 1 Automotive, Inc.
F
GRBKGreen Brick Partners, Inc.
F
GTThe Goodyear Tire & Rubber Comp
F
GTXGarrett Motion Inc.
F
HASHasbro, Inc.
F
HDHome Depot, Inc. (The)
F
HGVHilton Grand Vacations Inc.
F
HLLYHolley Inc.
F
HLTHilton Worldwide Holdings Inc.
F
HNIHNI Corporation
F
HOVHovnanian Enterprises, Inc.
F
HZOMarineMax, Inc. (FL)
F
IBPInstalled Building Products, In
F
INSEInspired Entertainment, Inc.
F
IPInternational Paper Company
F
JACKJack In The Box Inc.
F
JILLJ. Jill, Inc.
F
JOUTJohnson Outdoors Inc.
F
KBHKB Home
F
KFSKingsway Financial Services, In
F
KRUSKura Sushi USA, Inc.
F
KSSKohl's Corporation
F
KTBKontoor Brands, Inc.
F
LAKELakeland Industries, Inc.
F
LCIILCI Industries
F
LELands' End, Inc.
F
LEGLeggett & Platt, Incorporated
F
LEGHLegacy Housing Corporation
F
LENLennar Corporation
F
LGIHLGI Homes, Inc.
F
LINDLindblad Expeditions Holdings I
F
LOCOEl Pollo Loco Holdings, Inc.
F
LOWLowe's Companies, Inc.
F
LTHLife Time Group Holdings, Inc.
F
LVSLas Vegas Sands Corp.
F
LVWRLiveWire Group, Inc.
F
MARMarriott International
F
MBCMasterBrand, Inc.
F
MCDMcDonald's Corporation
F
MCWMister Car Wash, Inc.
F
MELIMercadoLibre, Inc.
F
MGMMGM Resorts International
F
MHOM/I Homes, Inc.
F
MLKNMillerKnoll, Inc.
F
MNROMonro, Inc.
F
MODModine Manufacturing Company
F
MPAAMotorcar Parts of America, Inc.
F
MPXMarine Products Corporation
F
MSGEMadison Square Garden Entertain
F
MTHMeritage Homes Corporation
F
MVSTMicrovast Holdings, Inc.
F
MYEMyers Industries, Inc.
F
NATHNathan's Famous, Inc.
F
NCLHNorwegian Cruise Line Holdings
F
NVRNVR, Inc.
F
OIO-I Glass, Inc.
F
OLPXOlaplex Holdings, Inc.
F
ONEWOneWater Marine Inc.
F
OPLNOPENLANE, Inc.
F
ORLYO'Reilly Automotive, Inc.
F
OSWOneSpaWorld Holdings Limited
F
OXMOxford Industries, Inc.
F
PACKRanpak Holdings Corp
F
PATKPatrick Industries, Inc.
F
PHINPHINIA Inc.
F
PHMPulteGroup, Inc.
F
PIIPolaris Inc.
F
PKGPackaging Corporation of Americ
F
PLOWDouglas Dynamics, Inc.
F
PRKSUnited Parks & Resorts Inc.
F
PRSUPursuit Attractions and Hospita
F
PTLOPortillo's Inc.
F
PTONPeloton Interactive, Inc.
F
PZZAPapa John's International, Inc.
F
RCKYRocky Brands, Inc.
F
RCLRoyal Caribbean Cruises Ltd.
F
REALThe RealReal, Inc.
F
RICKRCI Hospitality Holdings, Inc.
F
RIVNRivian Automotive, Inc.
F
ROLRollins, Inc.
F
RRRRed Rock Resorts, Inc.
F
RUSHARush Enterprises, Inc.
F
RUSHBRush Enterprises, Inc.
F
SAHSonic Automotive, Inc.
F
SBHSally Beauty Holdings, Inc. (Na
F
SBUXStarbucks Corporation
F
SCVLShoe Carnival, Inc.
F
SFIXStitch Fix, Inc.
F
SGSweetgreen, Inc.
F
SGCSuperior Group of Companies, In
F
SHAKShake Shack, Inc.
F
SHOOSteven Madden, Ltd.
F
SLDPSolid Power, Inc.
F
SMPStandard Motor Products, Inc.
F
SNBRSleep Number Corporation
F
SVVSavers Value Village, Inc.
F
SWSmurfit WestRock plc
F
TDUPThredUp Inc.
F
TILEInterface, Inc.
F
TJXTJX Companies, Inc. (The)
F
TMHCTaylor Morrison Home Corporatio
F
TPHTri Pointe Homes, Inc.
F
TPRTapestry, Inc.
F
TRIPTripAdvisor, Inc.
F
TRSTriMas Corporation
F
TSCOTractor Supply Company
F
ULTAUlta Beauty, Inc.
F
VACMarriott Vacations Worldwide Co
F
VIRCVirco Manufacturing Corporation
F
VSCOVictorias Secret & Co.
F
WGOWinnebago Industries, Inc.
F
WINAWinmark Corporation
F
WOOFPetco Health and Wellness Compa
F
WWWWolverine World Wide, Inc.
F
WYNNWynn Resorts, Limited
F
XPOFXponential Fitness, Inc.
F
YUMYum! Brands, Inc.
F
ZGNErmenegildo Zegna N.V.

Understand Our Methodology

Every stock undergoes 18 systematic checks based on forensic accounting principles, including Beneish M-Score and Altman Z-Score quantitative models.

View Full Methodology →

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