The Zacks Leisure and Recreation Products industry faces challenges due to the ongoing tariff war and soft macroeconomic data. However, a positive fitness product sales trend, driven by growing health and fitness awareness, bodes well for the industry. Industry participants who design, market, retail and distribute products for the outdoor and recreation market are witnessing solid demand. Stocks like Sportradar Group AG SRAD, YETI Holdings, Inc. YETI and American Outdoor Brands, Inc. AOUT are likely to benefit from the trends mentioned above.

Industry Description

The Zacks Leisure and Recreation Products industry comprises companies that provide amusement and recreational products, swimming pools, marine products, golf courses, boat repair and maintenance services, and other ancillary services. The services include indoor and outdoor storage, marine, boat rentals and personal watercraft. Some industry participants manufacture outdoor equipment and apparel for climbing, mountaineering, backpacking and skiing. A few companies also provide connected fitness products and subscriptions for multiple household users. Industry players primarily thrive on overall economic growth, which fuels consumer demand for products. The demand, highly dependent on business cycles, is driven by a healthy labor market, rising wages and growing disposable income.

4 Trends Shaping the Future of the Leisure & Recreation Products Industry

Tariff War: U.S. President Donald Trump's decision to impose tariffs on key trade partners such as China, Mexico and Canada is affecting the industry. Investors remain worried about the global trade war's impact on the U.S. economy, especially with inflation woes still lingering.

Consumer Sentiment Down: A decline in consumer sentiment is likely to hurt the industry. According to the University of Michigan report, consumer sentiment for April was 50.8, the lowest since June 2022 because of concerns over rising inflation. The Producer Price Index (PPI) for final demand decreased 0.4% in March, whereas the core PPI increased 0.3%, which indicates ongoing price pressure.

Booming Golf Business: The golf industry has been doing exceptionally well in the past couple of years. The demand for golf equipment is rising due to advancements in technology. Innovations like adjustable hosels and aerodynamic clubhead designs are offering players more tailored and efficient options to improve their game. The game is benefiting from an increase in the participation of young people. Technology also plays a vital role in reshaping sports. India and China have become two of the most significant emerging golf markets.

Robust Demand for Fitness-Related Products: The demand for fitness-related products in the United States has been strong, driven by growing health awareness, lifestyle changes and a focus on personal well-being. Consumers continue to invest in home workout equipment, wearable fitness technology and subscription-based fitness programs. The rise of digital fitness platforms and at-home workout solutions has fueled interest, especially among those seeking convenience and flexibility.

Zacks Industry Rank Indicates Dismal Prospects

The Zacks Leisure and Recreation Products industry is grouped within the broader Consumer Discretionary sector.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dismal near-term prospects.

The Leisure and Recreation Products industry currently carries a Zacks Industry Rank #157, which places it in the bottom 36% of more than 247 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s position in the bottom 50% of the Zacks-ranked industries results from the negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, analysts are losing confidence in this group’s earnings growth potential. Since Dec. 31, 2024, the industry’s northbound estimate for the current year decreased 18.6%.

Before we present a few stocks from the industry that you may want to hold, let us look at the industry’s recent stock market performance and valuation picture.

Industry Outperforms the S&P 500

The Zacks Leisure and Recreation Products industry has outperformed the Zacks S&P 500 composite and its sector in the past year. Stocks in the industry have collectively grown 12.1% compared with the S&P 500’s rise of 8.1%. The Zacks Consumer Discretionary sector has rallied 4% in the same time frame.

One-Year Price Performance

Valuation

On the basis of forward 12-month price-to-earnings, which is a commonly used multiple for valuing leisure products stocks, the industry trades at 26.36X compared with the S&P 500’s 19.85X and the sector’s 18.45X. In the past five years, the industry has traded as high as 44.74X and as low as 15.63X, the median being 21.11X, as the charts show.

Forward Price-to-Earnings Ratio Compared With S&P 500

3 Leisure & Recreation Products Stocks to Watch

Sportradar: The company provides sports data services for the sports betting and media industries in the U.K., the United States, Malta, Switzerland and internationally. Sportradar’s ability to secure long-term sports data rights, including deals with major leagues such as the NBA and ATP, bodes well. The company is benefiting from partnerships, strong data-driven solutions, and continued innovation in sports betting and media services. The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

SRAD’s 2025 earnings are expected to witness a year-over-year upsurge of 200%. The SRAD stock has soared 146.1% in the past year.

Price & Consensus: SRAD

YETI: The company’s international business has been growing, particularly in Europe and Australia. Increased brand awareness and an expanding retail footprint in these markets continue to drive growth. YETI has been seeing growth across wholesale and direct-to-consumer (“DTC”) channels. While wholesale is growing faster, DTC remains a key contributor, with strong engagement on Amazon and corporate sales.

The Zacks Rank #2 company’s earnings per share in 2025 are expected to grow 6.6% year over year. The stock has declined 27.2% in the past year.

Price & Consensus: YETI

American Outdoor Brands: The company has been gaining from the success of its long-term strategy. Brian Murphy, president and CEO, during the third-quarter fiscal 2025 conference call, emphasized that leveraging innovation to expand distribution, increase brand awareness and enhance margins has been a key driver of growth. The company achieved year-over-year sales increases across nearly all channels, including traditional retail, e-commerce and domestic markets, with both its Outdoor Lifestyle and Shooting Sports categories contributing to AOUT’s gains.

Shares of this Zacks Rank #2 company have risen 18.9% in the past year. The company’s fiscal 2025 earnings are expected to witness a year-over-year surge of 93.8%.

Price & Consensus: AOUT

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This article originally published on Zacks Investment Research (zacks.com).

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