Top Consumer Goods Stocks to Consider Amid Easing U.S.-China Trade Tensions

With U.S.-China trade tensions on the decline, now may be an ideal time to consider adding consumer goods companies to your investment portfolio. Historically, consumer goods stocks have faced challenges due to tariff concerns, making this sector ripe for bargain hunting.

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Here, we highlight three consumer goods stocks worth considering:

1. Amazon

Amazon (NASDAQ: AMZN) stands at the forefront of both e-commerce and cloud computing globally. Not only is it the largest e-commerce company, but it has also emerged as a dominant player in digital advertising. This unique combination gives Amazon a competitive edge.

The fastest-growing and most lucrative segment of Amazon is Amazon Web Services (AWS), which has increased demand from customers developing artificial intelligence (AI) models. Currently, AWS operates at capacity limits, prompting Amazon to invest heavily in data center expansion.

Beyond AWS, Amazon utilizes AI across its operations, enhancing logistics and warehousing efficiency. The company aims to improve product recommendations on its e-commerce platform and support third-party sellers in optimizing listings. AI is also refining its advertising business, leading to improved campaign quality and targeting.

Moreover, Amazon’s stock remains attractively priced compared to its historical averages.

2. JAKKS Pacific

As trade tensions ease, it appears that toy manufacturer JAKKS Pacific (NASDAQ: JAKK) may benefit from a surge in holiday toy sales.

While not as widely recognized as competitors like Mattel and Hasbro, JAKKS has undergone significant transformation under CFO John L. Kimble. Shifting focus from licensed toys to an expanded non-licensed range, JAKKS has entered a partnership with Authentic Brands to produce seasonal outdoor products, which may mitigate seasonal sales volatility.

The company reported an impressive 26% increase in sales, coupled with a 1,000 basis point improvement in gross margins. Strong performance was driven by popular products linked to the Sonic the Hedgehog 3 and Disney’s Moana 2. A solid line-up of films should further support its sales trajectory.

Additionally, JAKKS stock is priced at a forward price-to-earnings (P/E) ratio of just over 7, based on 2025 projections. Remarkably, it carries no debt and boasts nearly $60 million in cash, representing about 24% of its market capitalization.

3. e.l.f. Beauty

e.l.f. Beauty (NYSE: ELF) has seen remarkable growth in recent years. However, the company experienced softer trends earlier this year, prompting a lower fiscal Q4 sales forecast, estimating growth between negative 1% to positive 2%, after a robust 31% growth in fiscal Q3. This downgrade, along with tariff pressures, has pressured the stock price.

Despite this, e.l.f. shows signs of resilience. The company has established a fast-follower strategy, creating affordable counterparts to renowned prestige cosmetics and leveraging an extensive influencer network. This approach has allowed it to gain substantial market share in the mass cosmetics sector.

The brand is set to expand its shelf presence further, including at Target. e.l.f. also plans to extend its successful strategy into adjacent markets such as skincare, fragrance, and haircare. Notably, its skincare line has been bolstered by the acquisition of Naturium in fall 2023.

International sales jumped 66% last quarter, with approximately 20% of total revenue derived from outside the U.S. The company possesses ample room for further growth internationally. With a forward P/E ratio of 19 based on fiscal 2026 estimates and a price-to-earnings-to-growth (PEG) ratio of 0.36, e.l.f. stock is regarded as undervalued.

Investment Opportunity

This decline in stock valuations may present a second chance for investors looking to capitalize on growth. The potential across these companies reflects a landscape ripe for investment.

Consider conducting further research into these consumer goods stocks as the market shows signs of recovery.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.