Story of the Week
GameStop raises $933M from stock sale
GameStop said it had raised $933.4 million from a stock sale. The video game retailer said earlier this month it intended to sell up to 45 million shares of its common stock through an at-the-market offering, according to a filing with the U.S Securities and Exchange Commission. It sold all of those shares. GameStop’s shares on the New York Stock Exchange were up as of mid-morning May 28, the first day of trading following the Memorial Day holiday weekend. The company said it intends to use the stock sale’s net proceeds for general corporate purposes, which could include acquisitions and investments.
Apparel & Footwear
Margins balloon at Deckers as Hoka takes off
Deckers’ Hoka brand took off in the fourth quarter — surging even more than its 22% year-over-year lift in Q3 — leading a portfolio where sister brand Ugg “remains incredibly hot as well,” according to Wedbush analysts led by Tom Nikic. The footwear conglomerate “continues to be one of the fundamentally strongest names in our coverage,” Nikic said in emailed comments, noting that the company handily beat its guidance for the quarter. “Considering the strong momentum at both major brands (UGG and Hoka), conservative FY25 guidance, and a fortress balance sheet ($1.5 billion in cash with no debt), we remain very bullish.”
Abercrombie & Fitch shares surge 24% as retailer’s torrid growth shows no signs of slowing
Abercrombie & Fitch reported its strongest first quarter in its history on May 29, continuing a winning streak that again exceeded expectations. The retailer’s sales jumped 22% compared with last year, while profits were nearly seven times higher and came in well ahead of Wall Street’s estimates. Abercrombie’s shares closed more than 24% higher on that day. Here’s how the apparel company did in its fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG. Earnings per share were $2.14 vs. $1.74 expected. Revenue was $1.02 billion vs. $963.3 million expected. The company’s reported net income for the three-month period that ended May 4 was $113.9 million, or $2.14 per share, compared with $16.6 million, or 32 cents a share, a year earlier.
Birkenstock logs record Q2 revenue increase of 22%
Birkenstock Holding reported second quarter revenue of 481 million euros, or about $521 million at current exchange, marking a 22% year-over-year increase, according to a news release May 30. The company’s DTC and B2B segments each saw revenue grow by 30% and 19%, respectively. The company, which has been focused on global expansion, saw similar results in each of its geographic regions, with the Americas growing by 19%, Europe by 22%, and the Asia Pacific Middle East and Africa region growing by 39%. In response to the results, the company now expects revenue of about 1.78 billion euros, an overall increase of about 19% in the fiscal year. It previously expected revenue to range between 1.74 billion and 1.76 billion euros for the year.
Gap Inc. turns a corner as all brands notch gains in Q1
Gap Inc.’s Q1 net sales rose 3.4% year over year to $3.4 billion, with comps up 3%. Sales rose 3% in stores and 5% online, per a financial filing. The company gained market share for the fifth straight quarter, CEO Richard Dickson told analysts May 30. Old Navy net sales rose 5% to $1.9 billion, with comps up 3%; Gap was flat at $689 million, with comps up 3%; Banana Republic net sales rose 2% to $440 million, with comps up 1%; and Athleta net sales rose 2.5% to $329 million, with comps up 5%. Comps haven’t risen across all of the brands since 2017, per Wells Fargo research. Gross margin expanded 410 basis points year over year to 41.2%, and merchandise margin expanded by 340 basis points. The apparel conglomerate swung into the black with $158 million in net income, from last year’s $18 million loss.
Athletic & Sporting Goods
Dick’s Sporting Goods raises guidance, says shoppers are spending more on sneakers and athletic gear
Dick’s Sporting Goods said customers are spending more on new sneakers and athletic gear, leading the retailer to raise its full-year earnings guidance. The big-box sports store’s comparable sales grew 5.3% during its fiscal first quarter, well ahead of the 2.4% growth that analysts had expected, according to StreetAccount. The company said that growth was driven by increased transactions, meaning more customers are shopping at Dick’s, and higher average ticket values, showing that shoppers are spending more, too. Dick’s now expects comparable sales to rise between 2% and 3%, compared with previous guidance of up 1% to 2%. The low end of that range is only in line with the 2% growth that analysts had expected, according to StreetAccount.
Kona Founders Buy Brand Back from Kent Outdoors
Kona Bikes founders Dan Gerhard and Jake Heilbron have purchased the brand back from Kent Outdoors after news of Kent’s intent to sell the company. After selling the brand to Kent Outdoors in 2022, it has been announced that Dan Gerhard and Jake Heilbron have purchased the brand back and will be reuniting with “a team of dedicated, experienced Kona employees.” The first priority for the brand is said to be “renewing relationships” with its North American and European dealer network as the brand will be “pausing D2C for all bikes.”
Private equity firm buys hockey rink board maker Athletica Sport Systems
Private equity firm Reichmann Segal Capital Partners says it has acquired Athletica Sport Systems Inc., a maker of boards and other equipment used for hockey rinks. Athletica is the preferred rink equipment supplier to the National Hockey League and the American Hockey League. Toronto-based Reichmann Segal says Athletica will continue to operate under its current brand and management team. It says it plans to invest in new product development and expansion to strengthen Athletica’s market position. Athletica is based in Waterloo, Ont., where its manufacturing facility is also located.
Cosmetics & Pharmacy
Megalabs Acquires Majority Interest and Control of DS Laboratories
Megalabs, a leading pharmaceutical company, has acquired a majority interest in and control of DS Laboratories (“DS Labs”), a leading dermatology company focused on science-backed hair care across 50+ countries. This strategic move enhances Megalabs’ position in the global and US dermatology markets. For Megalabs, dermatology is a key focus area with a long and successful track record driven by its Medihealth line, including a wide portfolio of products, and more recently entering the minimally invasive aesthetics and fillers market with the acquisition of Croma-Pharma in Brazil and the distribution of its products in the Latam region. Terms of the deal were not disclosed.
Three Hills Announces Latest Investment in La Bottega
Three Hills (the “Firm”) is delighted to announce a new partnership with leading luxury hospitality amenities supplier, La Bottega Group (“La Bottega” or “the Company”), which will see the Company receive c. €115 million of new funding through a combination of preferred capital and equity from the Firm. The investment plays to Three Hills’ existing expertise in the hospitality space, with investments including Sant Ambroeus and The Wilde. As part of the new structure, Three Hills acquires a stake from The Equity Club, which invested in La Bottega in May 2019 on behalf of a number of Italian entrepreneurial families brought together by Mediobanca Private Banking.
Walgreens announces price cuts on 1,300 items amid ongoing consumer spending fatigue
Walgreens announced it would continue to cut prices on some 1,300 items — the latest company to pivot to value amid signs U.S. consumers are experiencing spending fatigue. The pharmacy chain said in a statement announcing a “summer of savings” the lower prices were in response to consumers’ ongoing struggles with elevated inflation rates that continue to bedevil the U.S. economy. “Walgreens understands our customers are under financial strain and struggle to purchase everyday essentials,” said Tracey D. Brown, EVP, President, Walgreens Retail & Chief Customer Officer. “We continue to be committed to our customers by lowering prices on over a thousand additional items, something we’ve been doing since October of 2023.”
Rite Aid reportedly close to deal on post-bankruptcy financing
Rite Aid is reportedly close to reaching a deal on a post-bankruptcy financing package, with a group of lenders preparing to provide interim financing while the company remains in Chapter 11, attorneys said, per a Reuters report. Rite Aid received court approval in late March to begin voting on a bankruptcy plan that would eliminate $2 billion in debt and hand over the company’s equity to a group of lenders including investment funds Brigade Capital and HG Vora. But Rite Aid has struggled to finalize some of the deal’s details, delaying its planned exit from bankruptcy by over a month, the report noted. Rite Aid is now close to a final deal with its lenders and expects to seek court approval of its bankruptcy restructuring in late June, Rite Aid attorney Aparna Yenamandra said at a May 24 hearing in bankruptcy court in Trenton, N.J.
Discounters & Department Stores
Dollar Tree confirms more layoffs at corporate office
Dollar Tree is laying off people in its corporate office in Chesapeake, Virginia, the company confirmed to Retail Dive by email. Layoffs will occur via both restructuring and reductions, a spokesperson said. The downsizing is the result of a recently announced “store portfolio optimization,” per the spokesperson. Earlier this year, the company said it would close 1,000 stores in the coming years, including 600 of its Family Dollar locations during the first six months of this year. About 50 employees are affected, according to outside news reports; the company didn’t immediately confirm how many are impacted. They “have been offered support including severance pay, access to COBRA medical coverage, career resources and our Emotional Wellbeing Solutions,” the spokesperson said.
TJX, the world’s largest off-price retailer, is poised to get a lot bigger
TJX Cos, which runs more than 4,900 stores spanning nine countries, could expand its global fleet by 1,300 or more additional locations, CEO Ernie Herrman told analysts. This year alone, the off-price retailer plans about 141 net new locations, expanding its footprint to nearly 5,100 and reflecting growth of about 3%, Chief Financial Officer John Klinger said in February. Also, about 480 stores will be remodeled and about 40 will be relocated, he said. In the U.S. this year, plans are to add 45 net new Marmaxx locations (T.J. Maxx and Marshalls), 40 HomeGoods locations and 26 Sierra locations. Outside the U.S., plans are to add 10 stores in Canada, 15 in Europe and five in Australia, Klinger said.
Ollie’s wins bankruptcy bid for 11 former 99 Cents Only Stores
Discount retailer Ollie’s announced that it’s acquiring 11 former 99 Cents Only stores. Ollie’s said the U.S. Bankruptcy Court for the District of Delaware approved the company’s stalking horse bid for the 99 Cents stores for $14.6 million in cash on May 23. 99 Cents Only announced it would liquidate on April 4 and less than a week later, the California-based company filed for Chapter 11. All 11 of the acquired 99 Cents stores are in “key markets” in Texas, the company said. Three are owned properties and the rest are leased. Ollie’s said the store acquisitions are expected to close in early June.
Target adds 1K summer items in affordability push
Continuing its emphasis on low prices, Target is adding more than 1,000 low-cost summer items to its product assortment, the retailer announced. The products, including swimwear, outdoor items, snacks, drinks and skin care products, will be priced as low as $1 and more than half will be priced below $15. The retailer debuted a virtual Swim & Sand Shop on its website and mobile app, where shoppers can see how fashion influencers model its swimwear. Target is also hosting in-store pop-ups so that customers can sample its summer food and beverages, and stores will play beach-inspired playlists. On June 1, hundreds of Target stores will host events featuring giveaway beach bags, beauty carts with samples, personalized towel embroidery and more, per the press release.
Kohl’s stock plummets more than 20% after massive earnings miss
Kohl’s shares plummeted more than 20% after the company posted a surprise loss per share, coming in well below Wall Street’s expectations for a slight profit. That share slide puts the stock on pace for its biggest single-day percentage decline ever. In an interview with CNBC, CEO Tom Kingsbury chalked up slower sales to tough comparisons. He said the department store had higher-than-usual clearance levels in the year-ago period, as it tried to clean up inventory and jumpstart its turnaround plan.
Emerging Consumer Companies
Feat Clothing sold to 2.0 Ventures
Utah-based company 2.0 Ventures has acquired a majority stake in DTC athleisure brand Feat Clothing. The financial terms of the deal were not disclosed. As part of the deal, Feat co-founder and CEO Taylor Offer is stepping down from his leadership role and will stay on as a company board member. A CEO successor has not yet been named. Under 2.0 Ventures, Feat’s product offerings, distribution channels and team of seven employees will remain unchanged. Feat has been in business since 2015. The brand started as a colorful lifestyle sock brand that expanded into tops, hoodies, joggers and shorts, selling through its website and a pop-up shop in Santa Monica, California that opened in 2022.
Vuori opens first store in China
Athleisure brand Vuori opened its first retail store in China on May 17 at Shangahi’s Jing’an Kerry Centre. The China store represents the brand’s 67th location and follows recent U.S. openings in Scottsdale, Arizona, and Long Beach, California. The latest store opening comes after the brand hosted a pop-up in Shanghai last fall. In addition to the recent Shanghai opening, the brand is planning to open a flagship location on Regent Street in London in October, which will anchor the brand’s European business.
Suja Life, the leading functional wellness platform and parent company of Suja Organic and Vive Organic, announced its acquisition of soda brand, Slice. With the addition of Slice, Suja Life’s better-for-you beverage portfolio expands, continuing the momentum that began in 2022 with its acquisition of Vive Organic. The deal represents Suja Life’s continued dedication to offering beverages that provide incremental health benefits with low sugar and clean ingredients. Under Suja Life’s innovative guidance, Slice will be reintroduced in 2025 with a fresh look and revamped formula featuring pared-down clean ingredients.
Halara bets on physical retail, opens its first pop-up
TikTok-viral athleisure brand Halara opened its first temporary pop-up location as the direct-to-consumer company plots retail expansion in the U.S. and worldwide. Halara, which is headquartered in both Singapore and New York City, debuted its 3,500-square-foot pop-up store in New York’s Soho neighborhood this week. Halara was founded in 2020. In 2021 and 2022, the brand saw a lift from the “TikTok made me buy it” phenomenon as Gen Z flocked to buy the brand’s trendy and affordable athleisure apparel. Like many digitally native fashion brands, Halara is betting that physical retail will help it reach loyal customers in person and build credibility among new audiences.
Food & Beverage
CoreFX Ingredients acquires dry powder company Connoils
CoreFX Ingredients, a food manufacturing supply company, has expanded its portfolio by acquiring the Wisconsin-based powder delivery system Connoils. The financial terms of the deal were not disclosed. Connoils is a “boutique nutritional technology company specializing in powder delivery systems and specialty oil distribution,” the company said. CoreFCX believes the “strategic” deal will allow it to expand its research and development initiatives. Evanstown, Illinois-based CoreFX has a mission of delivering technological advancements in health and nutrition to increase customer satisfaction, it said. Its latest acquisition comes on the heels of founder and CEO Dennis Neville also acquiring back a majority stake in the company from Ornua, an Irish dairy processor, back in March.
Encore acquires US frozen baked-goods company Chalet Desserts
US-based private-equity firm Encore Consumer Capital has acquired local frozen desserts and baked-goods business Chalet Desserts. Chalet CEO Dave Laukat and the rest of the management team will remain on board, according to a statement from the investor, which did not disclose the financial terms. “I am excited about the partnership with Encore and the experience they bring to the table,” Laukat said. “With their support, I am looking forward to our next chapter of growth.” Kate Wallman, managing director of Encore, said Chalet is a “category leader” and the investor will support its growth “through add-on acquisitions, organic growth initiatives and investments in capacity”. Chalet, based in Sacramento, California, sells its frozen bakery desserts and baked goods into in-store bakeries at supermarkets and convenience stores, as well as supplying foodservice and ingredients end-markets.
Valeo Foods Group Acquires Leading Italian Bakery Company Dal Colle
Valeo Foods Group (“Valeo Foods” or “The Group”), one of Europe’s leading producers of quality sweets, treats and snacks, has completed the process to acquire assets of a renowned Italian producer of high-quality bakery products, Dal Colle. With a history and heritage dating back 120 years, Dal Colle produces a range of bakery products, sweet treats and snacks for every occasion including Pandori, Panettoni and Croissants. Its range of over 180 products is currently sold in over 35 countries around the world. Dal Colle provides a highly complementary addition to Valeo’s expanding Italian platform and operations, built on its initial acquisition of Balconi in 2015 and the subsequent acquisitions of Val D’Enza in 2017 and IDP Pattini in 2023.
Vandemoortele acquires Dolciaria Acquaviva
Belgian family-owned food group Vandemoortele has announced it will acquire Italian bakery specialist Dolciaria Acquaviva from private equity firm Apheon. In a statement, Vandemoortele said the deal will fortify its position in the Italian frozen bakery market and accelerate its growth. It will enable the group to offer customers a range of innovations across a larger set of categories including bread, savory specialties, pastries and patisserie. Dolciaria Acquaviva was founded in 1979 by the Acquaviva family. It has since developed a widespread product portfolio in the frozen bakery category and now operates through four industrial plants in Italy. The company is headquartered in Gricignano di Aversa, Caserta, with a workforce of around 200 employees overall and a turnover of around €120 million in 2023. Its founder, Pierluigi Acquaviva, will continue to be part of the company’s future as chairman of the board of directors.
Grocery & Restaurants
Red Lobster files for Chapter 11 bankruptcy protection
Red Lobster Management LLC and affiliated companies have filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Middle District of Florida. The move had been predicted for weeks following the Orlando, Fla.-based chain’s hiring of restructuring expert Jonathan Tibus in March. In a press release, the company, which operates nearly 600 Red Lobster casual-dining restaurants across the country, said it would use the protection to “drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern.” The chain closed around 90 restaurants last week, and the assets of dozens of them were put up for auction. As part of the filing the company said it had entered into a stalking horse purchase agreement with its lenders.
Flynn Group acquires New Zealand Wendy’s
Flynn Group LP has acquired Wendco (NZ) Ltd., the sole franchisee of the Wendy’s brand in New Zealand, the company announced May 20. San Francisco-based Flynn Group, which also franchises Applebee’s Neighborhood Grill & Bar, Taco Bell, Panera Bread, Arby’s, Pizza Hut, and Planet Fitness units, said Wendco had been operated by the Lendich family since 1988. The Wendy’s New Zealand franchise business includes more than 20 Wendy’s restaurants from Auckland in the north to Dunedin in the south. With the purchase, Flynn is now the sole franchisee for The Wendy’s Company in Australia and New Zealand. The acquisition is Flynn’s third international investment over the past year.
Home & Road
Lowe’s Beats Wall Street in Q1 Although Earnings, Revenues Slipped
Despite a decline in do-it-yourself shopper sales, Lowe’s managed to beat Wall Street estimates for earnings and revenues in the first quarter. Net earnings were $1.76 billion, or $3.06 per diluted share, versus $2.26 billion, or $3.77 per diluted share, in the year-prior quarter, the company reported. In the period a year earlier, a gain from the sale of the company’s Canadian business added 10 cents to net earnings per diluted share, Lowe’s noted so, adjusted for the event, earnings per diluted share were $3.67, which compares to $3.06 in the 2024 period. An analyst consensus estimate published by Yahoo Finance called for earnings per diluted share of $2.94 and revenues of $21.12 billion.
Profits leap ahead in Q1 for Williams Sonoma
Top 100 retailer Williams-Sonoma Inc.’s profits jumped nearly 70% in the first quarter of Fiscal 2024, even as net revenues lagged 2023 levels. Net revenues for the three months ended April 28 totaled $1.66 billion, down 4.9% compared with $1.755 billion over the same three-month span in 2023. Additionally, the company noted that its revenues for the quarter were down 10.9% from two years ago and off the mark by 1.4% vs. three years back. By brand, Pottery Barn totaled $677 million in revenues in the quarter, down 10.8% vs. $768 million in the first quarter of 2023, while West Elm’s $430 million represented a 4.1% decline compared with $452 million a year back.
An Inside Look at the Wayfair’s First Physical Store
Wayfair has opened its first large-format store in Wilmette, IL, near Chicago, as part of its initiatives in the development of a physical retail presence in the market. The company noted that the 150,000 square foot, two-story Wayfair branded store is a one-stop shopping destination for all things home, including furniture, home decor, housewares, appliances and home improvement products for shoppers across the style, space and budget spectrum. Customers can expect a distinct home shopping experience at the store, Wayfair asserted, where they can explore 19 departments and find most household needs in its curated collections and with the assistance of in-store experts.
Jewelry & Luxury
Coach scraps its copyright infringement lawsuit against Gap
Coach has filed to dismiss its lawsuit against Gap Inc., according to a May 21 court filing. The case was a trademark infringement complaint over the use of the word “coach” on Old Navy products. The lawsuit, filed on April 3 in the U.S. District Court for the Central District of California, was dismissed in its entirety without prejudice by Coach parent company Tapestry. Tapestry previously claimed Coach had “suffered substantial damages” as a result of the Old Navy products, and said the products were “likely to create a false impression and deceive consumers, the public, and the trade into believing that there is a connection or association between” the brands.
De Beers’ Sales Slide in Fourth Round of Sales This Year
De Beers Group’s rough diamond sales declined in the fourth sales cycle of the year, falling 21 percent year-over-year. The company reported May 23 that its latest round of sales totaled $380 million, down from $479 million in the fourth sales cycle of 2023. De Beers’ sales also fell 15 percent in comparison with the third sales cycle of 2024, when they totaled $446 million. Year-to-date, De Beers sales fell slightly more behind last year following the fourth sales cycle. The company’s rough diamond sales are now 17 percent lower than they were at this time last year, totaling $1.63 billion compared with $1.97 billion a year ago.
Richemont Appoints Van Cleef & Arpels’ Nicolas Bos as New CEO
Richemont posted its highest-ever group sales for this fiscal year, boosted by its jewelry brands and retail sales. The luxury giant also announced changes to its board of directors, naming a new CEO. Nicolas Bos, currently CEO of Van Cleef & Arpels, will take on the re-established role June 1. Jérôme Lambert will continue as chief operating officer, reporting to Bos and remaining on the board. “With his strong track record, Nicolas will bring a rare combination of creativity, deep industry expertise, and entrepreneurship to his new role,” said Richemont. As for its results, for the fourth quarter ended March 31, Richemont posted sales of €4.8 billion ($5.2 billion), a 2 percent year-over-year increase at actual exchange rates (down 1 percent at constant currency rates). For the full year, sales were up 3 percent at actual exchange (8 percent at constant currency rates) to €20.62 billion ($22.33 billion).
Office & Leisure
Chewy posts 3.1% sales gain in Q1, announces $500M share repurchase program
Chewy reported first-quarter net sales increased 3.1% year over year to $2.9 billion, beating both its own and analysts’ guidance for the period. Gross margin increased 130 basis points to 29.7%. The online pet retailer posted an operating profit of $64.6 million, or a 161% year-over-year increase, and a net income of $66.9 million, or a 193% increase from last year. Chewy also announced a $500 million share repurchase program for its Class A and Class B common stock.
DraftKings falls as Illinois nears sports betting tax hike
DraftKings Inc. and FanDuel-owner Flutter Entertainment Plc fell on after the Illinois Senate passed legislation that would raise taxes on sports betting. The bills would make the sports gambling tax, which is currently 15%, to a new graduated format that would be as high as 40% on the adjusted gross revenue of sports gaming companies. The legislation, part of the Illinois budget package, heads to the state’s House. DraftKings fell 10% on May 28, the most since August, and Flutter fell by 7.7% in US trading.
Technology & Internet
Best Buy Jumps 10% As Cost-Cutting Preserves Profits
Best Buy on May 30 missed Wall Street’s quarterly sales expectations but stressed higher profits and lower costs as softer demand for consumer electronics continues. The retailer beat on earnings per share and stuck by its full-year forecast. It expects revenue to range from $41.3 billion to $42.6 billion for the full year, which would mark a drop from the most recently ended fiscal year when full-year revenue totaled $43.45 billion. The company said comparable sales will range from flat to a 3% decline. On an earnings call, CEO Corie Barry said Best Buy expects 2024 “to be a year of increasing industry stabilization,” echoing remarks the company first made in February. She said the retailer expects sales trends to “sequentially improve” in the next three quarters. But, she added, the retailer still faces many challenges, including persistent inflation, high mortgage rates and a hangover from outsized tech spending during the pandemic.
Amazon plans to give Alexa an AI overhaul, monthly subscription price
Amazon is upgrading its decade-old Alexa voice assistant with generative artificial intelligence and plans to charge a monthly subscription fee to offset the cost of the technology, according to people with knowledge of Amazon’s plans. The Seattle-based tech and retail giant will launch a more conversational version of Alexa later this year, potentially positioning it to better compete with new generative AI-powered chatbots from companies including Google and OpenAI, according to two sources familiar with the matter. Amazon’s subscription for Alexa will not be included in the $139-per-year Prime offering, and Amazon has not yet nailed down the price point, one source said. While Amazon wowed consumers with Alexa’s voice-driven tasks in 2014, its capabilities could seem old-fashioned amid recent leaps in artificial intelligence.
Amazon to expand drone delivery service after clearing FAA hurdle
Amazon said it has received federal approval to fly its delivery drones longer distances without the need for ground spotters, clearing a key regulatory hurdle and opening the door for the company to scale the service to more parts of the U.S. Previously, Amazon was required to fly its drones within a pilot’s view. The Federal Aviation Administration’s approval allows Amazon to conduct flights beyond an observer’s line of sight. Amazon received approval after it developed a collision-avoidance technology onboard the drones enabling them to “detect and avoid obstacles in the air.” The technology has been a key tool for other drone delivery companies, such as Zipline, looking to operate beyond visual line of sight, or BVLOS. The e-commerce giant’s drone delivery service, Prime Air, has struggled since Amazon founder Jeff Bezos laid out his vision for the program more than a decade ago.
Finance & Economy
Pending home sales in April slump to lowest level since the start of the pandemic
Signed sales contracts on existing homes dropped 7.7% in April compared to March, the slowest pace since April 2020, according to the National Association of Realtors. These so-called pending sales are a forward-looking indicator of closed sales one to two months later. Pending sales were 7.4% lower than in April of last year. Sales were expected to be flat compared to March. Since the count is based on signed contracts, it shows how buyers are reacting to mortgage rates in real time. The average rate on the 30-year fixed mortgage ended March at around 6.9% and then took off, hitting 7.5% by the end of April, according to Mortgage News Daily. With home prices still climbing and supply very low, leading to increased competition, that jump in rates had a huge effect on sales.
Consumers curb US economic growth in first quarter, inflation cools
The U.S. economy grew more slowly in the first quarter than previously estimated after downward revisions to consumer spending and a key measure of inflation ticked down, keeping the Federal Reserve on track to possibly begin cutting interest rates at least once before the end of the year. Gross domestic product – the broadest measure of economic activity – grew at an 1.3% annualized rate from January through March, the Commerce Department reported on May 30, down from the advance estimate of 1.6% and notably slower than the 3.4% pace in the final three months of 2023.
Consumer confidence rebounds for first time in 3 months
Consumer confidence unexpectedly rose in May, ending three straight months of declines as Americans cheered a resilient labor market. The latest index reading from the Conference Board was 102, above 97.5 in April and higher than the 96 economists surveyed by Bloomberg had expected. Just 13.5% of consumers said jobs were “hard to get,” down from 15.5% in April. This comes as the economy has continued to show more resilience than many expected. While the unemployment rate ticked up slightly to 3.9% from 3.8% in April, it’s been below 4% for 27 months, the longest stretch since the Vietnam War. Meanwhile, the number of Americans filing for unemployment benefits remains low, and various trackers of wage growth show workers are seeing pay increases above the rate of inflation.
