Consumer Staples Sector Lagged Broader Market in Q3 as Earnings Estimates Declined

Consumer staples stocks underperformed the broader market in the third quarter of 2026. State Street Consumer Staples Select Sector SPDR ETF (AMEX:XLP) dropped 3.24% during the period, contrasting with a 2.25% gain for the benchmark S&P 500. Top quantitative scores in the sector were earned by Sendas Distribuidora SA (OTC:ASAIY), Chefs' Warehouse, Inc. (NASDAQ:CHEF), Darling Ingredients Inc (NYSE:DAR), Archer-Daniels-Midland Company (NYSE:ADM), and Tesco PLC (OTC:TSCDY).

A key driver behind the sector's weakness was a shift in earnings expectations. Analysts reduced third-quarter earnings estimates for consumer staples companies by 4.0% during the quarter. Consumer staples was among six broad market sectors that experienced dollar-level cuts to earnings forecasts since June 30, joining sectors such as materials and health care. Despite the reductions, third-quarter earnings for consumer staples are still anticipated to grow 2.9% year-over-year.

Investors will be watching upcoming third-quarter corporate earnings releases to see if consumer staples companies can meet the updated growth targets. Attention remains focused on metrics such as valuation, growth, profitability, and earnings revision trends to separate outperforming companies from those with weaker fundamentals, including Cal-Maine Foods, Inc. (NASDAQ:CALM), The Marzetti Company (NASDAQ:MZTI), Celsius Holdings, Inc. (NASDAQ:CELH), The Clorox Company (NYSE:CLX), and Smithfield Foods, Inc. (NASDAQ:SFD).