Regarded as defensive investments, consumer staples stocks are generally safe bets in choppy markets. On the other hand, they usually underperform during bull runs, and this paradigm has rung true over the past six months as the sector’s -3.9% decline paled in comparison to the S&P 500’s 8.4% gain.

Some companies can buck this trend, but the odds aren’t great for the ones we’re analyzing today. On that note, here are three consumer stocks that may face trouble.

Brown-Forman (BF.B)

Market Cap: $12.22 billion

Best known for its Jack Daniel’s whiskey, Brown-Forman (NYSE: BF.B) is an alcoholic beverage company with a broad portfolio of brands in wines and spirits.

Why Are We Cautious About BF.B?

1. Annual sales declines of 2% for the past three years show its products struggled to connect with the market
2. Forecasted revenue decline of 1.1% for the upcoming 12 months implies demand will fall even further
3. Overall productivity fell over the last year as its plummeting sales were accompanied by a decline in its operating margin

At $26.72 per share, Brown-Forman trades at 15.8x forward P/E. Read our free research report to see why you should think twice about including BF.B in your portfolio.

Flowers Foods (FLO)

Market Cap: $1.8 billion

With Wonder Bread as its premier brand, Flowers Foods (NYSE: FLO) is a packaged foods company that focuses on bakery products such as breads, buns, and cakes.

Why Do We Pass on FLO?

1. Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
2. Forecasted revenue decline of 1.9% for the upcoming 12 months implies demand will fall off a cliff
3. Performance over the past three years shows its incremental sales were much less profitable, as its earnings per share fell by 21.7% annually

Flowers Foods is trading at $8.56 per share, or 10.1x forward P/E. Check out our free in-depth research report to learn more about why FLO doesn’t pass our bar.

Kraft Heinz (KHC)

Market Cap: $30.66 billion

The result of a 2015 mega-merger between Kraft and Heinz, Kraft Heinz (NASDAQ: KHC) is a packaged foods giant whose products span coffee to cheese to packaged meat.

Why Are We Out on KHC?

1. Falling unit sales over the past two years suggest it might have to lower prices to stimulate growth
2. Forecasted revenue decline of 2.2% for the upcoming 12 months implies demand will fall even further
3. Inability to adjust its cost structure while its revenue declined over the last year led to a 25.1 percentage point drop in the company’s operating margin

Kraft Heinz’s stock price of $26.01 implies a valuation ratio of 12.8x forward P/E. To fully understand why you should be careful with KHC, check out our full research report (it’s free).

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