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Inside a Walmart store in New Jersey, a worker puts the finishing touches on a cake with an edible ink Sponge Bob on top. A colleague creates a buttercream rosette border for a different cake, while another coworker frosts a tier of what will be a triple-deck dessert.It’s graduation season, the busiest time of year for the 6,200 employees the nation’s largest retailer trained to hand-decorate cakes per customers’ orders. The cakes themselves come, pre-made, frozen and in a variety of shapes and sizes, from suppliers, not Walmart’s in-store bakeries.But there’s no sugarcoating the importance the company places on its custom cake business. Its army of icing artisans are the highest paid hourly workers in a typical U.S. Walmart, excluding managers. Cake decorators earn an average of $19.25 per hour, compared with $18.25 for all nonmanagerial store workers, a company spokesperson said.Melissa Fernandez, 36, started working in the electronics area and then the wireless services department of the Walmart in North Bergen, New Jersey, before she transferred to the deli area in search of better pay. But Fernandez had her eye on a cake decorating job and after spending two months getting trained by a store colleague, she picked up a piping bag full-time in 2021.“I love baking at home. I love painting,” Fernandez said. “I love doing anything artistic, and I just always wanted to be a part of it.” After 11 years with Walmart, she said she now makes about $24.40 an hour.Despite their elite status within Walmart, the retailer’s cake decorators have attracted detractors on social media. The company promotes its personalized baked goods on TikTok and encourages the workers behind such creations to do the same. Critics have accused Walmart decorators of stealing ideas and undercutting the work of professional cake artists with their low-priced products.After TikTok videos praising Walmart’s $25 heart-shaped cakes with borders that resemble vintage lace cropped up before Valentine’s Day this year, a few bakers produced their own videos explaining why their cakes cost so much more and critiquing Walmart’s.Debates ensued in the comments sections over whether Walmart represented evils of capitalism or served the needs of the masses.A customized sheet cake that can be sliced to serve 96 people costs $59 at Walmart, about one-third to half the price that a nationwide sample of independent bakeries list online for similarly sized cakes. For $5.20 more, Walmart customers can add strawberry or “Bavarian creme” fillings, which like the bare cakes, are vendor-supplied.The slice of the celebratory occasion cake market Walmart holds appears vast based on company-supplied figures. One out of four cakes sold in the U.S. comes from Walmart, and its employees will collectively decorate more than one million cakes during May and June, according to a company spokesperson.The number of cakes decorated each day at the location where Fernandez works nearly doubles to 5060 when school graduations come around, compared to 3035 a day during the rest of the year, said Michael DeMarco, the manager of the store’s fresh food department. He credits the decorators’ talent and promotional efforts on TikTok.“We’re getting a lot of repeat customers. We’re doing a lot more business because of just the viral sensations,” DeMarco said.A TikTok video that showed Fernandez designing a $24 version of a customized bouquet cake12 cupcakes that are individually decorated and arranged to look like a bunch of flowersreceived nearly a half-million views. The bouquet design was one of the North Bergen store’s most popular cakes last month, a company spokesperson said.The dressy heart-shaped cakes, as well as cakes that resemble meals like sushi or a pile of spaghetti and meatballs, are popular too, she said. Fernandez also has created “burn away” cakes: an iced cake topped with an image printed on paper, which is set ablaze to reveal a different image underneath.“TikTok helps me stay up to date,” she said. “A lot of trends that I see on there, within that week or within that month, customers will come asking about it. And we’re pretty up to date as well.”Jazzing up a cake by hand requires skill, whether or not someone else did the baking, she said. Funneling buttercream frosting through a bag and various sized piping tips to yield the desired design without misplaced blobs is not the same as drawing or painting, Fernandez explained.“There’s a lot of pressure points that you have to practice in order to get the borders correct and the right thickness or the right texture,” she said.Tiffany Witzke, who has been a Walmart cake decorator since July 2016 and works at a store in Springfield, Missouri, has more than 912,000 followers on TikTok. The job attracts people who “can be extremely skilled and talented,” Witzke said, adding that customers want increasingly complicated designs.“When I first started, it was basically just borders and writing,” she said. “Now, everybody wants more and more and more on their cake.”Liz Berman, owner of The Sleepy Baker, in Natick, Massachusetts, said she’s not worried about losing customers to Walmart because of her attention to detail and the premium ingredients she uses.She charges $205 and up for a half-sized sheet cake, the bouquets made up of two dozen miniature cupcakes cost $110. All the cakes are made from scratch, and Berman said she designs everything herself.“It’s just a totally different business model,” she said. “Everything I do is custom.”For Walmart, the cake decorating business delivers higher profit margins than some other areas, such as groceries and electronics, according to Marshal Cohen, chief retail advisor at market research firm Circana. But it’s also resonating with shoppers looking for affordable luxuries.“We’ve gone into a period where the consumer is saying, ‘This is good enough,'” Cohen said.Customers interviewed at the North Bergen store on a recent weekday seemed to be satisfied. George Arango, 34, picked up two customized cakes, one to celebrate a coworker’s retirement and the other for a colleague getting another job. After researching prices on various store websites, he decided to give Walmart a try.“The price is fantastic,” he said. “I’m walking out with two cakes for $40.” Anne D’Innocenzio AP Business Writer
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Popular athletic apparel brand Lululemon Athletica is seeing its share price crash today. As of this writing, the stock (Nasdaq: LULU) is down nearly 20% in early-morning trading. The companys dramatic share price fall comes a day after it announced its first-quarter results for fiscal 2025, and issued a tariff-related warning about its profit forecasts. Heres what you need to know. Lululemon reports Q1 2025 results Despite todays stock price fall, Lululemon actually reported fairly positive results for its first quarter of fiscal 2025, which ended on May 4. Announcing its results yesterday after the closing bell, Lululemon reported $2.37 billion in net revenue, an increase of 7% compared to the same quarter a year earlier. The company also announced a comparable sales increase of 1%. However, diving into that comparable sales increase of 1% reveals some potentially downbeat foreshadowing. That comparable sales increase of 1% is taking Lululemons full global sales into account. Internationally, Lululemons comparable sales increased 6%. But when you look at the comparable sales only in America, they actually decreased by 2%. That American slice of the comparable sales pie suggests that the company is facing greater struggles in the U.S. than the rest of the world. Lululemon also announced a gross profit for the quarter of $1.4 billion, up 8% from the same quarter a year earlier. The companys diluted earnings per share (EPS) were $2.60, versus $2.54 for the same quarter a year earlier. The good news for Lululemon is that its revenue of $2.37 billion and EPS of $2.60 beat Wall Street expectations. According to a consensus estimate cited by CNBC, analysts were expecting revenue of $2.36 billion and an EPS of $2.58. Yet despite these beats, Lululemon also reported something that sent shivers down the spines of investors: a Q2 forecast that did not meet expectations. Lululemon issues disappointing guidance forecast Lululemon said it expects its current Q2 net revenue to be in the range of $2.54 billion to $2.56 billion. That forecast was below what analysts were expecting. As Yahoo Finance notes, analysts had expected a Q2 net revenue forecast of $2.57 billion. But worryingly, the company said its guidance does not incorporate future unknown impacts, including tariffs and macroeconomic trends. Its that unknowable impact of tariffs on Lululemons sales that likely worries investors the most. Its Q1 results already showed that the companys sales in America are not as strong as in other markets, which is likely driven by in part weakening consumer confidence and fears of further tariff-fueled price increases ahead. If consumer confidence weakens further, Lululemon, like other retailers, could be hit harder as Americans cut back on nondiscretionary spending to mitigate the impact on their wallets. However, Lululemon faces bigger challenges than just weakening consumer confidence in the United States. The Canadian company manufactures the majority of its goods in Asia. As Yahoo Finance notes, as of 2023, 42% of Lululemons products were made in Vietnam, 16% in Cambodia, 11% in Sri Lanka, 10% in Indonesia, and 8% in Bangladesh. Additionally, it sourced 40% of its components for those products from Taiwan, 26% from China, and 12% from Sri Lanka. Many of those countries have had huge tariffs placed upon goods from them by President Trump. If all those tariffs go into effect, it could necessitate price hikes for many of Lululemons products in Americasomething not all its U.S. customers may be willing to absorb. That could ultimately lead to a decline in sales. In fact, Lululemon has already said that it will raise prices on some of its goods. We are planning to take strategic price increases, looking item by item across our assortment as we typically do, and it will be price increases on a small portion of our assortment, Lululemon CFO Meghan Frank said on the companys financial call. One positive forward-looking sign, however, was that Lululemon reiterated its previously forecasted outlook for all of 2025. The company said it still expects net revenue of between $11.15 billion and $11.30 billion. LULU shares tank Still, Lululemons disappointing Q2 forecast and its manufacturing vulnerability to Trump’s tariffs have sent the company’s shares plunging this morning. As of the time of this writing, LULU shares are down almost 20% to just above $265. Since the start of the year, Lululemons stock price has declined 30%.
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E-Commerce
A federal judge late Thursday temporarily blocked a proclamation by President Donald Trump that banned foreign students from entering the U.S. to attend Harvard University.Trump’s proclamation, issued Wednesday, was the latest attempt by his administration to prevent the nation’s oldest and wealthiest college from enrolling a quarter of its students, who accounts for much of Harvard’s research and scholarship.Harvard filed a legal challenge the next day, asking for a judge to block Trump’s order and calling it illegal retaliation for Harvard’s rejection of White House demands. Harvard said the president was attempting an end-run around a previous court order.A few hours later, U.S. District Judge Allison Burroughs in Boston issued a temporary restraining order against Trump’s Wednesday proclamation. Harvard, she said, had demonstrated it would sustain “immediate and irreparable injury” before she would have an opportunity to hear from the parties in the lawsuit.Burroughs also extended the temporary hold she placed on the administration’s previous attempt to end Harvard’s enrollment of international students. Last month, the Department of Homeland Security revoked Harvard’s certification to host foreign students and issue paperwork to them for their visas, only to have Burroughs block the action temporarily. Trump’s order this week invoked a different legal authority.If Trump’s measure were to survive this court challenge, it would block thousands of students who are scheduled to come to Harvard’s campus in Cambridge, Massachusetts, for the summer and fall terms.“Harvard’s more than 7,000 F-1 and J-1 visa holdersand their dependentshave become pawns in the government’s escalating campaign of retaliation,” Harvard wrote Thursday in a court filing.While the court case proceeds, Harvard is making contingency plans so students and visiting scholars can continue their work at the university, President Alan Garber said in a message to the campus and alumni.“Each of us is part of a truly global university community,” Garber said Thursday. “We know that the benefits of bringing talented people together from around the world are unique and irreplaceable.”Harvard has attracted a growing number of the brightest minds from around the world, with international enrollment growing from 11% of the student body three decades ago to 26% today.As those students wait to find out if they’ll be able to attend the university, some are pursuing other options.Rising international enrollment has made Harvard and other elite colleges uniquely vulnerable to Trump’s crackdown on foreign students. Republicans have been seeking to force overhauls of the nation’s top colleges, which they see as hotbeds of “woke” and antisemitic viewpoints.Garber says the university has made changes to combat antisemitism. But Harvard, he said, will not stray from its “core, legally-protected principles,” even after receiving federal ultimatums.Trump’s administration has also taken steps to withhold federal funding from Harvard and other elite colleges that have rejected White House demands related to campus protests, admissions, hiring and more. Harvard’s $53 billion endowment allows it to weather the loss of funding for a time, although Garber has warned of “difficult decisions and sacrifices” to come.But cutting off students and visiting scholars could hamstring the university’s research and global standing. The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org. Chrissie Thompson and Collin Binkley, AP Education Writers
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