Three Retail Stocks to Consider Selling Before Earnings Reports

Investors are being advised to evaluate their holdings in certain consumer discretionary stocks as they approach earnings season. Etsy, Nike, and Tesla are among the companies that have experienced significant challenges in recent years, prompting concerns about their future performance. Etsy, once a standout during the pandemic, has seen a sharp decline in its gross merchandise sales, with a 5.3% year-over-year drop in 2025. The company's recent sale of its Reverb and Depop segments for $1.2 billion, compared to its $1.625 billion purchase price in 2021, signals a strategic retreat. Active buyers and sellers on the platform have also decreased, and while revenue has increased, it has been driven by online advertising and fees rather than core sales growth. Nike has struggled with a -2.27% compound annual growth rate over the past three years, with recent quarterly reports showing flat revenue. Despite a 5% increase in wholesale revenue, this was offset by a 4% decline in direct sales, and the company's 3.6% dividend yield no longer reflects strong growth potential. Tesla, while transitioning into new markets, faces declining sales and a high valuation that may not be sustainable. These companies' earnings reports, expected in the coming months, could further clarify their trajectories, but current trends suggest caution for investors.