Buy Hold Sell: Are these 5 ASX consumer stocks worth adding to the shopping basket?

It's a tough time for many consumers as the forces of rising rates, stubborn inflation and other macro complications have seen Australia's cost-of-living crisis rumble on.

It's a good thing then that there's still plenty of consumer discretionary stocks showing strength, even if the outlook for the sector remains more uncertain.

In this episode of Buy Hold Sell, Livewire's Tom Stelzer is joined by Elise McKay from Pendal and Shaun Weick from Wilson Asset Management to make the call on three ASX consumer stocks that could still be potential buys despite the challenges.  

They've also brought two very different choices as their picks for a consumer stock to watch right now. 

Please note this episode was filmed on 15 July 2026.

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Edited Transcript  

Tom Stelzer: Hello and welcome to Livewire’s Buy Hold Sell. I'm Tom Stelzer. It's a tricky time for the Aussie consumer right now with rising rates, stubborn inflation and general uncertainty all playing their part. So are there any consumer stocks that are a Buy right now? To find out, I'm joined by Elise McKay from Pendal and Shaun Weick from Wilson Asset Management. Guys, thanks for joining us.

Before we get to the stocks, I'm going to have some questions for you guys. Elise, I might come to you first. Consumer confidence remains well below its historical average. Do you see that changing over the next six to 12 months and what impact is it having on the consumer discretionary sector?

Elise McKay: Yeah, so the outlook for the consumer has been very challenging. And when I look at the latest consumer survey data, the readings have improved slightly in July, but they're still in the bottom 10% of the last 50 years worth of survey results. So they are very negative. 

We've seen a slight improvement reflecting hopes that perhaps the next RBA move won't be a hike and then also some relief on fuel prices. But on the other hand, we are actually seeing housing pricing roll over following down expectations for the housing market to continue to see price declines. Further, when I think about the outlook for consumer discretionary, one of the leading indicators is expectations, how people feel about buying large items and they're feeling very negative. So that does suggest, if you follow that, that there's further downside to consumer discretionary.

So over the next six to 12 months, what would really change that is the RBA and what move the RBA takes next. When I'm thinking about consumer discretionary, I do think that there's still opportunities in the market. I don't think it's a sector that I expect to outperform versus the market, but there's always an opportunity to stock pick those companies which have got a great brand, have great scale. They're focused on the value end of the consumer. They're the ones that are probably best positioned through this environment.

Tom Stelzer: Shaun, Elise has said there's still opportunities there in the consumer sector. Obviously there's quite a few macro headwinds facing the Australian economy right now, whether that's rates, inflation, the potential property market downturn, tax changes. What's one part of the consumer sector you think is still well positioned to perform and why?

Shaun Weick: Yeah, it's pretty tough if you've got a mortgage. I think at the moment, you look at the various demographics that are actually doing okay at the moment - the affluent consumer's doing fine. You've got strong asset price inflation and healthy interest rates. They're generating good returns on their savings in the bank. 

The younger demographic - the pre-mortgage age group - they're continuing to spend and all the industry feedback suggests that that's continuing to go well. And then I think it's just those sectors that are generally resilient and people tend to spend through all conditions, things like the gaming sector. So there are definitely pockets of opportunity there, but certainly pays to be an active stock picker and be managing your positions.

Light & Wonder (ASX: LNW)

Tom Stelzer: It's a nice segue into the first stock we've got. Sean, I might stay with you. It's Light & Wonder. Are you a buy, hold or sell there?

Shaun Weick (BUY): We think it's a Buy. We think the quarterly coming up could be a little bit soft, but management have reintegrated their guidance for the full year. And then consensus numbers - analyst numbers remain about 10% below the FY28 targets. So we still think there's some decent room for upside there. 

They're clearly the number two in what is a continually evolving duopoly with Aristocrat. The games are actually performing pretty well and the stock's trading on 9.5x PE with double digit earnings growth. 

We think the key catalyst over time for this one will be deleveraging. The Aussie market doesn't tend to like businesses that are trading up around that three times net debt. So yeah, as that profile comes down, they're aggressively buying back stock. We think the shares can outperform.

Tom Stelzer: Elise, Shaun's touched on the stock buyback there and the balance sheet. I think it's down 29% year to date. Are you a buy, hold or sell on Light and Wonder?

Elise McKay (BUY): We're also a buyer. So one thing that we have got a preference for in our portfolios is more US consumer exposure. There's definitely more of that in Light and Wonder. When we look at Light and Wonder, part of why it's trading where it is today is some of the market flows. Shaun referenced this is the clear number two player. Its competitor Aristocrat has had phenomenal feedback lately. Its new product releases are doing really well with casinos.

So whilst Light and Wonder is still doing better than market, it's not doing as well as Aristocrat. And so we've seen this pair trade put on where people have been buying Aristocrat, but because they want to hedge out their gaming exposure, they short Light and Wonder. So that's created a really nice opportunity in the stock.

Breville Group (ASX: BRG)

Tom Stelzer: Elise, I might stay with you. It's a more classic consumer name next. It's Breville Group. Are you a buy, hold or sell there?

Elise McKay (HOLD): We're a hold. This is a business that we have owned in the past. It is exposed to an attractive structural growth story, being coffee. Again, much more global US-based exposure rather than Australian consumer exposure. Why do we like coffee? It's a daily ritual. It's not really a discretionary item. Unlike other vices like liquor, people actually are continuing to drink it. And as the cost of buying coffee at your local coffee shop goes up, people are preferring to drink it at home. 

So from a structural growth story, it's attractive, they're executing well, they're gaining share. Then if we think about some of the headwinds that they've experienced in 2026, they're through some of these issues. So they were exposed tariffs, they migrated their supply chain out of China - they're almost through that issue. There's FX impacts. So whilst growth's been subdued in 26, it should improve into 27 so we should get back to that low double digit growth, but it's priced in at 29 times PE. So for me, it's a quality business, but that's priced. So it's a hold.

Tom Stelzer: Shaun, I think Elise has touched on that it's had to contend with tariffs, it's had a pretty tricky year on the global front. Are you a buy, hold or sell on Breville?

Shaun Weick (BUY): We're a buy. We think to Elise's point, you're getting rid of a lot of what was the messy period for Breville in terms of tariffs and whatnot. You're entering FY27 with a much cleaner base with what we believe will be a double digit plus earnings growth. 

These guys are leveraged predominantly to the US affluent consumer. They're continuing to spend strongly. And we think in particular, the in-store execution within the Best Buy stores is very strong, which is going to continue to see them gain market share. Looking at the valuation, we understand it is expensive, but on a relative basis for the quality of the business, we actually think it's okay. So we're a buyer here.

JB Hi-Fi (ASX: JBH)

Tom Stelzer: Shaun, I'll come back to you for our final stock. It's JB Hi-Fi. You buy, hold or sell there.

Shaun Weick (HOLD): We're a hold on JB Hi-Fi. Our key concern at the moment is just around the significant inflation we're seeing within the components that feed into the electronic sector. We've seen recently Apple putting through double digit price increases across some of their product range, which we think has some risk around demand. 

The other issue we have short term - given the challenging consumer environment here domestically - is they're cycling quite strong comps through July and August, which tends to cap the performance of retailers if they do print depressed comps through that period. So we're a hold, looking for an entry point to add to our position here because it's a great retailer.

Tom Stelzer: Elise, Shaun's obviously touched on the fact there that it's exposed to a sector - electronics - that has seen a lot of price increases. Maybe there's a bit of difficulty there. Are you a buy hold or sell on JB Hi-Fi?

Elise McKay (HOLD): I'm also a hold. So this is, like Shaun said, a great quality retailer. It falls into that bucket of retail that I would hold despite being negative on consumer discretionary as a sector. And it's derated significantly recently. So it's derated from 25 times PE to 17 times PE off only a small earnings downgrade. 

So what's driven that? Firstly, the view was, and at some stage it should be a beneficiary of an AI enabled replacement cycle. People looking to upgrade their computers and their phones to take advantage of the latest AI features. But right now is not the time because of the memory issues, the price inflation that Shaun talked to. I think that there's still some time for that to work its way through, which is why I'm a hold for now. 

But why I'm not a sell is because whilst I see that as an issue, I do think that if you are looking for some protection in your portfolio, where you want to have protection in case interest rates do start coming down, JB Hi-Fi as a quality retailer could be the stock to play that role.

Tom Stelzer: We've also asked our guests to bring one consumer stock they're keen on right now. Elise I might come back to you. What do you have for us? 

Aristocrat Leisure (ASX: ALL)

Elise McKay (BUY): I was really conflicted on this one because I co-manage a sustainable fund, which can't invest in gaming, but then we also don't own any consumer discretionary direct exposure because we're not positive on that sector. 

So I've gone broader and the stock I've brought today is held in other portfolios and it's Aristocrat. Like we talked about with Light & Wonder, this is a stock that is exposed to the US consumer and a clear market leader. So whilst Light & Wonder is the value play, Aristocrat is the quality play. And here you get market leading growth in land-based gamings. There's also an opportunity where they're taking those great games and they're putting them online. So they're targeting growth in that interactive business to about a billion US dollars revenue by 2029. So it's less than a quarter of that size today.

That should create long-term opportunity for earnings growth in the stock. So a stock today where it's trading, I think it's 20 times PE, you're getting double digit earnings growth, quality, certainty, they're doing buybacks. We think it's growth at a reasonable price.

Tom Stelzer: Elise has given us Aristocrat, Shaun what have you got for us?

Skinkandy (ASX: SK1)

Shaun Weick (BUY): I'm going to go with Skinkandy, which is a piercing business. This one's only recently listed a few months ago and is led by Dain Friis, who spent around about 10 years at Lovisa. So he's cut out of the Brett Blundy retail mould, who we rate as probably the highest quality retail entrepreneur here in Australia. 

The business we think over the next three to five years can more than double its store footprint. And then if you look at the range, we think there's still significant growth opportunities as they build out the jewellery side of the business, which at the moment is only about 30% of the revenue. Given it's skewed towards typically that younger demographic, we don't think it's going to be impacted too much by budget constraints from parents saying, "No, sorry, Jenny, you're not getting your ears pierced." So if we look forward, this business we think is going to grow its earnings at 30 to 40% a year over the next three to four years.

It's trading on 16 times earnings. Lovisa, when it really had its mojo going on a global rollout, was a 35 to 40 times earnings business. Now I'm not saying it's going to trade at those levels, but if it even makes up half that gap, with the earnings growth, these shares can more than double over the next few years. So we're really positive on Skinkandy and we think the outlook's very strong there.

Tom Stelzer: Two pretty different picks there to end things on. Thanks for our guests and thanks for watching. Make sure to check out our YouTube channel for more Buy Hold Sell.