While Lululemon works to resolve its inventory issues, the stock is trading at a forward earnings multiple of 14.

Deckers’ Hoka brand is emerging as one of the hottest names in footwear, yet investors can buy the stock at a bargain forward earnings multiple of 13.

10 stocks we like better than Lululemon Athletica Inc. ›

Buying shares of companies that own leading consumer brands when they are experiencing temporary weaknesses in sales can be a rewarding tactic. Recent quarterly reports from top apparel companies show that consumers are pulling back on their discretionary spending. But this also means investors with long time horizons can buy shares at what will likely prove to be bargain valuations.

Lululemon Athletica (NASDAQ: LULU) and Deckers Outdoor (NYSE: DECK) have been two of the worst-performing stocks in the S&P 500 index so far this year. But now, trading at less than 15 times forward earnings estimates, they could be smart buys.

Lululemon Athletica stock has fallen by about 53% year to date as investors reacted to its weak sales growth. But part of that was due to self-inflicted wounds that management can conceivably solve.

You have to be careful to avoid investing in value traps. These are stocks that look cheap on a price-to-earnings basis, but where the underlying business is losing its competitive edge and offers limited growth potential. However, Lululemon has built one of the strongest brands in the athletic apparel industry. Its sales growth has generally been on par with its industry peers or outpaced them, which is a clear sign of brand strength.

Lululemon’s sales growth has been lower than expected this year; weaker consumer discretionary spending and a lack of newness in the company’s product assortment were to blame. But management is addressing its inventory issues and plans to bring fresh styles to stores by spring 2026.

The retailer was posting double-digit percentage revenue growth just two years ago. The top-line gains it continues to see internationally show the brand is still strong, suggesting that the company could return to that type of overall growth in a stronger economy. Lululemon’s forward (1-year) price-to-earnings (P/E) multiple is 14. Overall, this could be a solid value stock to add some balance to portfolios that are heavily weighted toward high-growth, high P/E stocks.

Deckers Outdoor has benefited from growing demand for its Ugg brand and Hoka performance footwear. The stock plummeted after its latest quarterly earnings report and is now down about 57% year to date, which presents a great buying opportunity.