As we head into the second half of Q3’25, with less than 5 months left for the year, it is safe to say that the overall equities market have had a great 2025 so far.
With both the STI and SPY hitting their all-time high, I believe that investors are having a hard time finding quality businesses that are still trading at a discount.
Well for those who are stumped, here’s a potential shopping list of 4 well-known US brands that have tanked more than 25% over the past 1 year.
Imagine brands like Versace, Jimmy Choo, Abercrombie & Fitch, Wendy’s and Harley-Davidson all trading down, while the SPY is up by more than 20%.
So what happened to these companies, and do you dare to buy?
1. Wendy’s Co (NASDAQ: WEN): -40.10%
I probably had Wendy’s just once in my life, back when it was still operating out of Malaysia’s Sunway Pyramid mall. Today, it is but a distant memory for both Malaysians and Singaporeans, as Wendy’s has exited both countries.
But why would a business that is supposedly recession proof and evergreen suffer a selloff when overall markets are bullish? Wendy’s has been reporting growth on both top and bottom lines. While the growth might not be spectacular, it meant that the correction might not be driven purely by fundamentals.
Wendy’s demise appears to be coming from a few angles. Like other companies, it is buffeted by macroeconomic headwinds and inflationary pressures, just that it is being hit harder. The other killer is lowered sales and earnings forecasts. The fast food business is notoriously competitive, and just like how KFCs and McDonald’s squeezed Wendy out of Asia, the Wendy’s back in the States is facing a competition that is too hard for it to handle.
My recollection of Wendy’s offerings back then was that it was nothing spectacular. If this remains the same, it would spell some serious trouble for the company.
2. Capri Holdings Ltd (NYSE: CPRI): -35.84%
Those who follow the luxury and consumer discretionary sector would know that it has not been a great year for this sector. Even the likes of LVMH Moet Hennessy Louis Vuitton SE (EPA: MC) and Prada SpA (HKG: 1913) haven’t spared by weak consumer sentiments.
Compared to other fashion boutiques, Capri seems to be faring worse. The company not only experienced shrinking sales, but also slipped into losses in FY 2025. The losses lacerated deeper, and Capri stock reacted in tandem by dipping into the lows.
The killer stroke however, has to be the blocked merger with Tapestry Inc (NYSE: TPR), the parent company of Coach New York, Kate Spade New York and Stuart Weitzman. Capri’s shares dropped almost 46% in a single day after a U.S. court blocked its USD 8.5 billion merger with Tapestry. The deal was seen as a major catalyst for the company, and its failure triggered a sharp selloff and halved Capri’s market value.
The fashion world is brutal and unforgiving. On one hand, having a plethora of ownership of high-street fashion brands helps build a portfolio of exclusive leather and fragrance products that many perceive as status symbols. On the other, these brands also need to be agile in an ever-changing scene.
Those who think Capri can still change things around, would see the current selloff as an opportunity to take a long position.
3. Harley-Davidson Inc. (NYSE: HOG): -32.27%
Harley-Davidson motorcycles are in a bit of a tough spot. They look cool, and their designs are borderline vintage and old fashion (in a good way). The elephant in the room? They’re often only appreciated from far, and rarely convinces a purchase.
The company prides itself on being an American company, with majority of its manufacturing plants and sales derived from the US. Even though the company has join the electrification initiatives, with its LiveWire lineup of electric bikes, sales and earnings continued to drop, indicating softening demand amidst ongoing tariff uncertainties.
Ultimately, Harley-Davidson’s bikes might look cool and iconic, but it serves a niche and aging group of consumers, while the general consumer trends are shifting towards lighter and electric motorcycles.
4. Abercombie & Fitch (NYSE: ANF): -25.30%
It wasn’t too long ago when Abercrombie & Fitch was one of the stock market’s darling, with stock prices rallying by more than 500%. Although not a fan favourite in Singapore and Malaysia, ANF remains one of the oldest American clothing brands, with a focus on casual luxury.
There really isn’t anything wrong with ANF. Revenue is growing, and profits have soared after a bumpy period.
Still, ANF shares were down about -19% after it provided a sales growth below expectations back in January 2025, even though raising its initial guidance. This would have likely caught the management and Executive team by surprise, as Wall Street definitely expected an even better growth spurt.
With longer term prospects still very much intact, the stock is still languishing at below $100 per share, providing a small window of opportunity for investors who wants to take advantage of the apparel maker’s recent selloff.
Verdict: Which one you dare to buy?
Nothing last forever. Not just Rome but businesses as well. Some of these companies face an insurmountable task of turning the tides against them, while some are just navigating temporary uncertainties.
That said, that does not mean temporary uncertainties cannot escalate into a Tom Cruise-esque Mission Impossible. So it really is up to each investor to fully understand the risks and bullish thesis that could play out before making a decision.
The deep value investor in me has yet to be fully awaken. But I wish those that are able to build conviction in any of the 4 companies listed above the very best, as the upside could be one of the success stories that you would remember for the rest of your life!
p.s. if you want to learn how to analyse and find the best stocks to buy, Alvin shares our strategy at this live webinar.
