2 Stocks to Avoid in 2025

It's tough seeing well-known American brands struggle in the modern world. Harley-Davidson (NYSE: HOG) and Kraft Heinz (NASDAQ: KHC) are two companies you want to root for, but they are both facing challenges in today's economic climate.

While both companies have strong legacies and iconic products, they are currently battling sluggish sales and bleak growth outlooks. Those outlooks are not very promising for 2025, which means I think these are two stocks to avoid throughout the year.

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1. Harley-Davidson

To put it simply, Harley-Davidson is struggling to sell bikes. The motorcycle maker has had a negative return of 23.8% over the last five years, versus an S&P 500 (SNPINDEX: ^GSPC) gain of 85.1% (at the time of writing). Revenue declined 35% year over year in the fourth quarter of 2024 to $688 million, while full-year 2024 revenue declined 11% to $5.84 billion. Specifically, the bikes side of the business, the Harley-Davidson Motor Company, saw revenues fall 47% year over year in the fourth quarter, while total motorcycle shipments declined 53%.

Total net income came in at $445 million in 2024, marking a 35% decline year over year. In the fourth quarter, Harley-Davidson posted a loss of $118.43 million.

That kind of slump in motorcycle revenue is disconcerting, and begs the question of what the company will do moving forward. Harley, as a whole, has struggled with what seems to be more tepid demand for its products. The company bounced back from a COVID-19-era slump in 2020, but has since seen revenue slow down again. According to an article by Reuters, overall Harley-Davidson sales have been in relative decline since 2015, with 2015 being the highest-selling year since 2010.

Looking forward, the company's own guidance doesn't seem that promising. 2025 expectations are for Harley-Davidson Motor Company revenue to either be flat or down by as much as 5% year over year. The financing side of the business is expected to decline 10% to 15%, while the electric segment should see an operating loss of $70 million to $80 million. Total diluted earnings per share are anticipated to be flat, to down 5% from 2024.

With such a tepid forecast, it's hard to get in the saddle for this one.

2. Kraft Heinz

While I love some of its famed products, Kraft Heinz has struggled for years to create meaningful growth. COVID-19 and eating at home in 2020 created a small uptick for the company's revenues, but performance has been relatively flat ever since. Most recently, the company reported full-year 2024 results that included a 3% decline in net sales, and a decline in diluted earnings per share of 2.2%, bringing full-year earnings to $2.26 per diluted share.

Going into 2025, Kraft Heinz provided a continued weak outlook, with expectations for sales to be either flat or ranging down 2.5% compared to 2024. Adjusted operating income is expected to be down 1% to 4%, while free cash flow is anticipated to be flat.

The producer of beloved items such as Heinz ketchup and Oscar Mayer hot dogs, Kraft Heinz has struggled to find its place over the last few years, and has relied on lower expenses to drive net income growth. In the short term, this has worked. For example, the company increased net income by nearly 21% in 2023, but saw earnings decline in 2024. Over time, you can only squeeze so much profit out of stagnant top-line sales growth. This makes the company seem like a sour pick for investors right now.

Overall, the company has underperformed the market by 44% over the last five years (at the time of writing), and there doesn't seem to be a lot of momentum that stands to drive the stock forward. If you're only looking for dividends, Kraft Heinz does have the capital to keep its 5% yield going, but there are so many other healthy options in the market. Just buying into an S&P 500 index fund would have gotten you a significantly better result over the last five years.

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David Butler has no position in any of the stocks mentioned. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.