Dollar General emerges as surprise winner 🏆

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Dollar General Emerges as Surprise Winner Amid Tariff Turmoil

Dollar General defied expectations in Q1 2025, not only beating earnings and revenue forecasts but also raising its full-year guidance — a stark contrast to major retailers like Macy’s, Abercrombie, and Best Buy, which have all revised their outlooks downward due to mounting tariff pressures.

For the quarter ended May 2, the discounter reported:

• 📈 Revenue: $10.44 billion (vs. $10.31B expected)

• 💵 Earnings per share: $1.78 (vs. $1.48 expected)

• 💰 Net income: $391.9 million, up from $363.3 million a year ago

• 🔮 Full-year sales growth outlook: Raised to 3.7–4.7% (from 3.4–4.4%)

• 📊 EPS forecast: $5.20–$5.80 (up from $5.10–$5.80)

CEO Todd Vasos said the company has taken proactive steps to reduce its reliance on Chinese imports, diversify its supplier base, and make product-level adjustments to avoid passing costs on to customers.

Internally, Dollar General has also streamlined its operations. The company reduced shelf clutter by removing 1,000 underperforming SKUs, ensuring that in-demand items were consistently stocked. It also expanded its home delivery footprint (now in over 3,000 stores) and saw DoorDash-driven sales increase by over 50% year-over-year.

Walmart Expands Drone Deliveries to Five U.S. States

Walmart is expanding its drone delivery program to 100 stores across Atlanta, Charlotte, Houston, Orlando, and Tampa, bringing the service to five states: Arkansas, Florida, Georgia, North Carolina, and Texas.

Partnering with drone operator Wing, Walmart will offer deliveries within a six-mile radius, promising 30-minute drop-offs for items like eggs, cold medicine, and pet food. Customers can currently place orders through the Wing app, though Walmart is testing a $19.99 delivery fee option in its own app for non-members.

Despite the buzz, adoption has been modest. Since 2021, Walmart has completed just over 150,000 drone deliveries. The rollout follows a previous plan with DroneUp to reach 4 million households — a target that fell short. Walmart’s current drone partners include Wing and Zipline.

TLDR 🗓️

Michaels Acquires Joann Fabrics Brands

Michaels has acquired the intellectual property and private label brands of Joann, the iconic fabric and craft retailer that recently shut down after filing for bankruptcy. The deal includes fan-favorite labels like “Big Twist” yarns, which will now be sold in Michaels stores and online later this year.

The acquisition comes as Michaels looks to expand its fabric, sewing, and yarn offerings, adding over 600 new products to its lineup. CEO David Boone said the move will help the company meet growing demand and better serve former Joann customers.

Joann, founded in 1943, was once a go-to destination for quilters and crafters. But in recent years, it struggled with weak demand, inventory issues, and increased competition, eventually leading to its closure.

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China’s Consumer Prices Fall Again

China’s consumer prices declined for the fourth straight month in May, with the CPI falling 0.1% year-over-year despite efforts to stimulate demand. Meanwhile, producer prices dropped 3.3% — the sharpest fall since July 2023 — highlighting persistent deflationary pressures.

Auto-sector price wars, falling property values, and weak domestic spending are driving the slide, even as core inflation rose 0.6%, the highest since January. Factory-gate prices for the coal and oil sectors saw steep declines, down 18.2% and 17.3% respectively.

Beijing has cut interest rates and lowered bank reserve requirements, but analysts say more stimulus may be needed.

Shein & Reliance to Export India-Made Apparel

According to a Reuters report, Shein and Reliance Retail plan to start exporting India-made Shein-branded apparel within 6 to 12 months. The two companies aim to scale their Indian supplier base from 150 to 1,000 manufacturers to meet both domestic and international demand, with a particular focus on targeting Shein’s U.S. and U.K. websites.

This move comes as the ongoing U.S.–China trade tensions force global retailers to diversify supply chains away from China. India’s Shein operation, relaunched via Reliance in early 2025, is modeled on Shein’s on-demand production system, with Reliance already working with factories to replicate best-selling designs at lower costs.

According to experts, this partnership could be a major win for Indian apparel exports, tapping into Shein’s $30B global business while reducing sourcing risks.

Amazon to Crack Down on Fake Reviews After U.K. Investigation

Amazon has pledged to strengthen its fight against fake product reviews following an investigation by the U.K.’s Competition and Markets Authority (CMA). The company will enhance its systems to prevent “catalog abuse,” where unrelated positive reviews are used to falsely boost ratings. Offending sellers could be banned from the platform, and users posting fake reviews may also face penalties.

The move follows similar commitments from Google and is part of a broader effort to protect consumers in the online marketplace. CMA chief Sarah Cardell said the new measures would help shoppers make more informed decisions.

Amazon stated that it already utilizes machine learning and human investigators to detect fake reviews, emphasizing its zero-tolerance policy.

Victoria’s Secret Postpones Earnings Release Following Cyberattack

Victoria’s Secret has delayed the release of its fiscal Q1 earnings report due to the lingering effects of a cyberattack disclosed in late May. The breach disrupted internal systems and temporarily took the website offline.

The company stated that the attack did not affect Q1 performance, which ended on May 3, and said the results were in line with or above expectations. However, it expects to incur costs from the incident that could impact future quarters.

The breach appears connected to a wave of cyberattacks targeting major U.S. and U.K. retailers, reportedly orchestrated by the Scattered Spider group. Other affected brands include Marks & Spencer, Cartier, Adidas, Dior, and The North Face.

Lululemon Stock Drops 17%

Lululemon shares plunged more than 17% on Friday — its worst day in over five years — after the company cut its full-year profit guidance, citing U.S. tariffs, soft store traffic, and intensifying competition.

The athleisure brand now expects earnings of $14.58 to $14.78 per share, down from its earlier forecast of $14.95 to $15.15. CEO Calvin McDonald pointed to a “dynamic macroenvironment,” adding the brand is “not happy” with U.S. growth.

Tariffs — including a 30% tariff on Chinese imports and a 10% tax on imports from other regions under the Trump administration — are weighing on costs. In response, Lululemon will implement modest price hikes on select items. Despite the setback, the company holds $1.3 billion in cash and zero debt. However, with rivals like Vuori, Alo, and Old Navy’s new low-cost activewear line gaining traction, Lululemon’s market pressure is intensifying.

Shein and Temu See U.S. User Decline After De Minimis Loophole Closes

Temu and Shein are losing steam in the U.S. following the closure of the de minimis loophole and the implementation of new Trump-era tariffs on Chinese goods. Temu’s daily active users plunged 52% in May versus March, while Shein’s fell 25%, according to Sensor Tower.

Ad spending also collapsed — Temu slashed its U.S. budget by 95% year-on-year in May, and Shein by 70%. The two low-cost e-commerce giants are now adjusting logistics strategies, shifting from direct-from-China shipping to building U.S. warehouses.

Temu’s App Store rank dropped to 132 in May from the top 3 a year ago; Shein fell to 60 from the top 10. Sensor Tower states that a 50% tariff is the tipping point at which Temu loses its cost advantage. The current tariff stands at 54%.

Amazon Tests Humanoid Robots for Last-Mile Deliveries

Amazon is reportedly developing AI-powered humanoid robots to assist with package deliveries, testing them in a purpose-built “humanoid park” in San Francisco. According to The Information, the robots, potentially riding in Rivian vans, could jump out to deliver parcels while human drivers cover nearby addresses. 

While the hardware comes from outside vendors, Amazon is building its own software. This move expands on earlier warehouse trials using robots like Agility Robotics’ “Digit.”

Roark Capital Buys Majority Stake in Dave’s Hot Chicken in $1B Deal

Private equity giant Roark Capital has acquired a majority stake in fast-growing fried chicken chain Dave’s Hot Chicken, valuing the company at around $1 billion. The LA-based brand, known for its spicy tenders and viral social media presence, saw U.S. sales surge 57% in 2024, crossing $600 million.

With over 300 locations and plans for 4,000 worldwide, Dave’s expansion is now backed by Roark’s vast restaurant empire, which also includes Subway, Dunkin’, and Arby’s. CEO Bill Phelps said Roark’s supply chain muscle and global franchising know-how could rapidly scale the brand. The founders and leadership team will remain onboard as minority stakeholders.

PVH Beats Q1 Revenue Expectations, But Trims FY25 Profit Outlook

PVH Corp reported $1.98 billion in Q1 2025 revenue, up 2% year-over-year and ahead of estimates. Growth was led by the Americas (+7%) and EMEA (+5%), offsetting a 13% decline in APAC, mainly due to China’s sluggish demand and Lunar New Year timing. Tommy Hilfiger sales rose 3%, while Calvin Klein remained flat.

However, gross margins dropped to 58.6% (from 61.4% YoY), and the company posted a GAAP loss of $332 million, partly due to foreign exchange headwinds and higher freight costs. PVH cited a $65 million full-year impact from U.S. tariffs.

The company reaffirmed flat to slightly positive revenue growth for FY25 but cut its EPS guidance to $10.75–$11.00, citing global macro uncertainty and trade policy risks.

Tidbits 🍿

• Sam Altman’s identity verification startup, World, is launching its eye-scanning Orb device in the UK this week, starting in London and expanding to other major cities. The Orb scans a user’s iris to generate a unique code, enabling anonymous verification through World ID for platforms like Reddit, Discord, and Minecraft.

• Footwear brand Kizik has appointed Gareth Hosford, a former executive at Nike and Converse, as its new CEO, succeeding Monte Deere, who will remain on the board. Hosford brings over a decade of global leadership experience from Nike and recently served as COO and CFO at performance brand Omorpho.

• L’Oréal has acquired a majority stake in British skincare brand Medik8, further deepening its investment in science-driven beauty. The deal adds Medik8 to L’Oréal’s Luxe division, strengthening its dermocosmetics portfolio, which already includes La Roche-Posay and CeraVe, and generated €7 billion in revenue in 2024.

This newsletter was curated by Shyam Gowtham

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