🚢 The test cruises are coming
![_Gap joins the House Hype party [Maskot via GettyImages]_](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/1HEnrV5QLkZQyQj8bKulGN_1_GettyImages-991174024.jpg)
Hey Snackers,
As Memorial Day approaches, we're honoring those who have sacrificed their lives to serve and defend the United States.
Stocks jumped yesterday ahead of the long weekend, after jobless claims fell to a new pandemic low.
BTW: Markets are closed for Memorial Day on Monday, so we'll be back in your inbox on Tuesday.
Gap teams up with America's largest retailer to launch a home decor brand — here's why
Fits like an oversized Gap hoodie... A classic 2000s look. Gap is taking off its Zuck hoodie and throwing on its interior designer glasses. The mall icon is partnering with Walmart to launch a home decor brand called Gap Home (creative). Think: decorations, organic cotton bedding, tabletops, and bath accessories. The confusing twist: the Gap-branded collection will be sold exclusively on Walmart's website. Under new CEO Sonia Syngal, Gap has been trying to start new revenue streams. Home goods are an obvious first choice.
The house is (still) hype... Gap recognized that a bit late. When lockdowns hit, Americans shifted their spending from jeans and cocktails to the only place that mattered: home. We thought the DIY House Hype might start slowing down last May. Last quarter, Home Depot and Lowe's proved that the House Hype is going stronger than ever. Plus, a booming housing market means more homes to fill with scented candles and wall sconces.
- For Gap: It's a distribution "slam dunk." While it's starting online, Gap Home will eventually be available in Walmart stores. Key stat: 90% of Americans live within 10 miles of a Walmart.
- For Walmart: Gap Home will make its stores more competitive in the home category through exclusive offerings at accessible prices (think: a $65 king comforter set).
Retail reflects the economy... and the middle may be getting squeezed. The consumer confidence gap between low earners and high earners has nearly tripled since May. Louis Vuitton and the Dollar Store are thriving, while J. Crew is in the middle trying to find its customers. Gap was hanging in the "middle" sphere for a while, but Gap Home represents a move down market. That could be a smart move, if the consumer confidence gap widens.
Royal Caribbean gets the first go-ahead for dress-rehearsal cruises
It's on sail... Royal Caribbean got the first green light from the CDC to start "test cruises," after being landbound for over a year. Cruise companies like RC and Carnival haven't been allowed to operate in the US — their biggest profit puppy — since March 2020. The test cruises are expected to start sailing from Miami in late June.
Will there be "test buffets"?... Test cruises are required for ships that aren't guaranteeing that at least 95% of passengers have been vaxed. The simulated cruises will carry "Volunteers of the Seas." In case you're interested: you have to be 18+ and agree to be Covid-tested. If Covid cases hit a certain level, RC will have to end the cruise.
- "Real" cruises: RC said it will require all passengers who are 16 or older to provide proof of vaccination when revenue cruises resume.
- Awkward: Florida just passed a law that prevents cruise companies from asking passengers for proof of vaccination.
Cruise companies have "slingshot" potential... but they may not be able to milk it yet. "Slingshots" are companies whose performance could surpass pre-pandemic levels, thanks to pent-up demand from their pandemic absence. Carnival already has more cruise bookings for 2022 than it did in 2019. But even though half of US adults are fully vaxed, half aren't. Test cruises are a step forward — but CDC restrictions mean cruise companies may not be able to fulfill their slingshot potential for a while.
What else we’re Snackin’
- Budget: President Biden's $6T budget proposal would push federal spending to its highest sustained levels since World War II.
- Descend: Boeing agreed to pay $17M in FAA penalties for production lapses related to its 737 aircraft models.
- PC: HP and Dell posted strong profits thanks to strong laptop demand, despite the Great Chip Shortage.
- Buck: Dollar Tree and Dollar General reported expectation-beating quarterly earnings. DG raised its yearly forecast, courtesy of stimulus checks.
Friday
- Earnings expected from Big Lots and Brookfield Property
Authors of this Snacks own shares of: Walmart
ID: 1666768