MAD MONEY 文字起こし 24JUN21 Vista Outdoor CEO, Breaking Down Carvana & Starbucks CEO

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https://podcasts.apple.com/us/podcast/vista-outdoor-ceo-breaking-down-carvana-starbucks-ceo/id147247199?i=1000526786743

0:46
Cramer Welcome to Mad Money. Welcome to Kramer America or Google my friends. I'm gonna try and make some money. My job is not just to entertain you but educate and teach you so call me one 873 76 tweet me at Jim Cramer. If you want to sum up today's thrift catching in one single word, that word would be jailbreak this incredibly bullish markets bursting through brick walls like the Kool Aid man sector for sector, dow surged in 323 points it has to be jumping point five 8% NASDAQ. Wow. new record plus 6.9 s&p new record NASDAQ new record Hey, maybe you can't judge a book by its cover. Okay. But but you can absolutely judge Mark by what's the most and right now this market screaming everything's working not one sector not another but everything. Yeah, by calling a jailbreak because pretty much everyone was let loose today. instead of the usual I when you lose pattern that has bedeviled so much to the actual fleet. Let me pick out one particular moment. One glorious particular moment in today's session was that second when pressing the surprise infrastructure bill is part.

2:06
Okay, you know what I mean? That'll demonstrate it. Okay. So let's go to where I need. Hey, look, I'm a stock whisperer. What was the most at that moment? That's not what the what the? What whatever. Number one. He like literally today the FDA gave Fast Track designation lose Alzheimer's drug. This one's huge because we heard lots of grumbling in the medical community. After Biogen got FDA approval for it's more it's more controversial Alzheimer's treatment. Now I know CEO Dave Rick's came on this show not long ago and presented this but then we got some seemingly discouraging data in the stock of pulverize Louise now more than 50 bucks five oh, from its lows a couple months ago. cluding monster $15.87 cent gain just today on this news. More importantly, this news tells me that the FDA will be fast tracking many more drugs. It's a brand new FDA, which means you can pay more for the entire pharmaceutical industry right here right now. It's a fantastic fact the FDA has gotten easier. second biggest winner. Tesla. Yeah, a market led by Tesla is a winning market, a market where big growth is back. The stocks been doghouse ever since a spike different joining the sp 500 this year. Now Tesla's on the move again. And I can see a warm runway here because it looks like your competitors still aren't ready for primetime goes higher watch. It'll start a little bit in the morning. It'll be up I'll be up at 330 while walking you through it. It's to myself. I like to do the show to myself when I work out. Next up united rentals and caterpillar. They'd both been lagging because Wall Street and given up on infrastructure and started worrying about a slower economy. But when you get nearly 580 billion in new spending that gives the industry a huge boost. United rentals has been that's a fantastic business. Is it nationwide roll up of equipment rental outfits. As for Caterpillar CEO Jim Applebee's, running a company with incredible discipline, no compromises. He's the first cat CEO I can remember who speaks of the shareholders in the same breath as the dealers and the customers. Oh, in those higher steel prices, they're British worried about Will you give me a break casket so much demand with such a great brand and they can pass off the cost to the customers or no? Here's an insane amount. But again, it speaks to how broad this rally is Darden Yeah, think about about Olive Garden. Oh, get this. I thought restaurants are supposed to have inflation problems, labor shortage headaches. I mean, isn't it everything's supposed to be so bad. Right? Well, looks like what we really have is more important. A Last Man Standing scenario. That's my take with gardens quarter. So many of our gardens competitors went under that it's the new champion by the fall of gardens nearly back to even with 2019 pre pandemic levels. That's amazing. Longhorn Steakhouse was up 13% versus 2019. To me this link of the chain was the layup of the lineup the even Ben Simmons connect my long horn has great service and by the way, and absolutely killer Bloody Mary. I am not kidding. Not to mention pretty You can still make some pretty good taters. You'll even my critical wife liked it left a big tip 28% Why not? Six biggest winner at the time of Biden's speech when the federal government passes a big infrastructure package, you're going to need rocks and aggregates to build new roads. So Vulcan materials came on strong and another stock that had been crushed of late because the schools are going out of style. And nobody expected this compromise bill. Seven when you've got to love a market where aligned technologies it's near the top. This is the company behind Invisalign braces. We've heard endlessly about new competitors coming in to challenge the lines dominance, but where the heck are those challenges? Have you seen them? I haven't. Honestly, I debated getting fitted for these and I already had braces once. But you know what's really good for them? D masking that's my term for not wearing masks is d masking. Clever. Eighth. How much do I love seeing wells Wells Fargo on this list? Top 10 Today we got the results of the government's stress test with all banks pass it on one day banks will be able to capital return plans. You know what's gonna have the best one? It's gonna be Wells Fargo, it's gonna be Charlie Scharf. This one is the most again, if they get the greenlight, they can do a huge buyback maybe repurchase as much as 13% of the company, you have to hope this stock goes down the more wells absolutely deserves a spot in the top 10 we need a bank in there to round the group out. I believe this will be the biggest percentage winner which is why it is such an outsized position for my travel trust, which you can follow along by joining the action alerts plus comm club. Then there are the last two the two that confirm that this really was a market wide jailbreak Corvo and sky works solutions

6:46
the semi back companies per week for weeks now, this market is slack semi leadership with the exception of Nvidia Did you know that Nvidia the second bit me yesterday I took it as a sign of strength but I wanted corbeau and scholarworks on the list because their cell phone chipmakers and without them you're not going to see the rest of tech rally beyond Fang and the letter A the second one not the first one which is a while they were both dead not doing great but I'm telling you Apple is going to react to these the stock of Apple Don't forget I mean no kidding you raised your price target by $1 but that's key that's a signal she singling by Apple by Apple so what do we what do we got here? All right, we got drug we got high growth we got tech we got infrastructure we got dining, vanity bad cellphone chips, Oh Allah the definition of opportunity and a wide good prep market. What makes this list so important symbol for months this Mark has been zero some either the boom and bust cyclicals were winning or the slowdown stocks, but really, it's a value market. It's really just a growth my who those people occasion has been a market led by oil, which is banned from pretty much everybody outside the energy space. These rallies weren't jailbreaks, they were just selected parolees from the bear house. The reason until today we had given up on the federal government doing anything else to bolster the economy beyond the latest COVID stimulus package, which is about to run out. All that stuff will be a bountiful child tax credit, which is great and should be a total gift than the usual retail suspects, target Walmart, which is really waffle. My chapel Jones, I got to own that American Eagle Outfitters, and then Costco, which is just to the moon of that some that now means that it's popping up or something. Beyond that, it looked like we weren't getting any more help than the pets. But today's infrastructure news makes you feel like maybe our government can govern. That alone is a major price to earnings, multiple enhancer. We've gotten so used to partisan rancor that I'd given up on the federal government giving us any good news for the foreseeable future other than Well, I don't know that stimulus package and that seemed to be it. Then today, we get a beneficence FTA and an infrastructure bill. That's a surprise with lots of money for roads, buildings and construction equipment. Earlier this week, I said that we're in a benign moment. There's little news, lots of time on our hands for to wait for the next big catalyst, a time of tremendous opportunity. I used that word 10 times opportunity. For weeks. That meant we only reacted the Fed, including Friday's comments from a non voting fed official, but they need to take more aggressively to stamp out inflation. But how many times can you sell stocks because a rising freight costs? I mean, really, does everything really have to come down because of the supply chain issues. It's too good a time people will consider everything to be so naked. You got to stop that. With the Fed finally out of the picture for a few days, we finally get a huge catalyst in the form of this infrastructure bill. I will not be bearish now tomorrow is a rustle we bouncing. We don't know what's going to happen. It could be terrible. Like the similar rebalancing from last week. We know that some money will have to come out of a bunch of stocks to pay for the main pump in the eyes main stocks could cause a decline. But the bottom line right now I think any decline will be bought because this is a positive opportunistic moment people and there are many who want to put their money to work. Oh by the way doesn't hurt the Dow stock Nike reported a great number after the bell today's jailbreak shows you the bulls are still in charge. Whether it be a new drug that's a blockbuster or Last Man Standing restaurant or cellphones are challenged bankers straightened teeth. I'll take it all. Mike in Wisconsin, Mike.

10:25
Jim Cramer in wherever you are. Okay, here's my quick question. I told me to make it quick.

10:33
Okay, well, you like that in their phone room that can be very Curt with people actually, like the nicest people in the world. And they probably some really good Britain and three oatmeal raisin cookies. Ah, what's going on?

10:45
Juliet. I bought about eight years ago, I paid $90 a share. It went up. Two years later do 120 and now it's been maintaining around $68 a share. What am I gonna do?

11:03
I just don't like doing it and I got like a million stocks that I like maybe like 1.6 million, but I just don't like gilliat and I got to tell you, Mike, Mike, Mike, it's just not one that the chill man wants you to be in. Can I got I'm gonna mispronounce this name. But you don't have to deal with my Mayor accent. What? Yes, that's right. I do speak just like Kate Winslet Peri in New York. Peri. Hey, how you doing? Jim? Thanks for the long hours and the hard work. Thank you. Tomorrow free 15 the alarm goes, because I like to be up earlier than those people from that YOLO thing. raindrops Go ahead. I'm asking about taking about Barrick Gold. Are you thinking right? I like gold as a hedge. I like aetherium as a hedge. I think if you're in a home when you should own back because Mark Bristow is real smart. All right. Listen to me. Any decline will be bought in this opportunistic moment. And today's jailbreak shows you their buying power. Have you ever seen a more diversified portfolio than this one? Or met tonight? Could an investment in the great outdoors? We just looked at portfolios after this summer. I'm gonna sit down with the CEO of fist outdoors to find out what's ahead for the company. Then to no center but only one leaf so miss an epic showdown over the fate of T's I won't tell you as workers head back to the office post pandemic. Quit this stock of Starbucks see a joke. I'm gonna have a triple that the computer was getting wet while we talked to the CEO so stay with Kramer.

12:45
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13:47
Now the world's going back to normal What are we good with the great outdoors stocks some of these have just been they've been hammered like the RV and motorhome place but others seem downright unstoppable. Take this to outdoor which makes all sorts of outdoor consumer products for action sports, grilling and hiking, not to mention the sports shooting business where they sell great deal of ammunition. It's no coincidence that the stock has doubled since we first poked the CEO back in November. That was right around election time. Because anytime there's a Democrat in the white house and garden aficionados start stockpiling ammunition. Well, look, that's a major source of the story. There's no doubt about it, but really, it's only part of it. Right now best outdoor is firing on all cylinders. Their most recent quarter was spectacular. And last month management held an incredibly bullish investor day that sent the stock into the stratosphere. The best part while this is running substantially, you know, this hiddenly still sells at 12 times earnings. I'm tired of hearing people say that no cheap stocks out there. And I think it's worth examining even at its 52 week highs so let's check in with Christmas. He's the CEO of this outdoor to get a better sense of where his company's headed Mr. Mets. Welcome back to Mad Money.

14:53
Thank you, Jim. Feels good to be back on and good to hear voice.

14:56
Oh, thank you, Chris. Thank you very much. You know, I'm torn about your stock. I really feel that had there not been so many new entrants into hunting an extraordinary amount of hunting licenses, I would have seen a balance that would have made people say, you know what, this is the equivalent of guix or Cabela's, let's get on board. But the fact is, you have so many people who want ammunition that he can tend to overwhelm the rest of the company.

15:23
It's a gym, there's no question about it. The Yeah, the secret within our company. And it's not really a secret because it's all public is our outdoor products business. Had a record year, we were up 25% on the top line last year. And the demand continues. I mean, we can't fill all of the demand that sits there in the marketplace today. So as much as our shooting sports and our ammunition business just continues to grow. And it's fueled also by the Remington acquisition we made last year but our outdoor products business, whether it be cooking or or biking, or golfing, any of the products that we produce, we can't produce enough of them.

16:04
Now, we've had a couple of companies on that our outdoor companies that I'll give you to name Thor and Brunswick, I happen to love both their products, somehow people decided their products are going to be too cyclical and not do well. The fact is, you sell a lot of things that aren't that expensive, but are of the highest quality. So it's that mosaic Perhaps that is made so that your stock keeps roaring while others have sold.

16:31
Jim, I think that's part of it. Right? I think there's part of it that you know, we play in in cyclicality, but we're also a counter cyclical stock. So you think about if if we were to go into a recessionary period, or what have you, people can afford our products versus buying an RV or a boat or or what have you. But a lot of what drives our success recently is the new product innovation. I could I could go through a litany of products that we've introduced that are industry first products, I mentioned the wing man and golf, we're just introducing a different version of that for the rugged outdoor industry. We've got all sorts of innovation in zero with we've got a new motorcross moto helmet that, yeah, we sold out all of our product within a few minutes of introducing it. So it's, it's really new product innovation and, and frankly, our efforts online to connect with the millennials and the younger generation that are buying our products for the first time is driving a lot of sales that I think other companies may not be capturing.

17:36
Also, Chris, I would tell you and look at your mosaic. You have a bunch of companies whose brands are actually bigger than their sales, for instance, I look at Camelback and then I look at Yeti. And frankly, I like the Camelback brand name every bit as a like a Yeti and Yeti just keeps growing and growing. It's a little crazy. I have your your bike helmets, okay. They mean safety to me. JIRA means safety to me, I think of that as being a safety product. I'd like to see other safety products with that brand. You said you're active in m&a? Could you take other products and run them through those fabulous brand names and really expand them?

18:16
We certainly can, Jim and you know acquisitions is going to be a big part of our value proposition going forward, we've closed on our fourth acquisition. In the last six months, we're generating three to 400 million of cash flow a year where in the mid to high teens and EBITDA margins. And our conversion of that EBIT da to cash is terrific. And, to your point, those platform brands we have I I walked in three and a half years ago and really enabled our people to do what they do best. And so we're just starting to get momentum. So to your point, as much as our stock is, has grown, and we're appreciative for that. I think we're just in the beginning innings of this everything that I can see what we're capable of doing with these brands, we haven't unleash the full power of it yet. So we're going to continue to look to do tuck in acquisitions for these great brands we have, but we're also going to explore categories like with the quiet cat acquisition, where we licensed the Jeep brand exclusively. We're in a category of E bikes, which is the fastest category in the entire outdoor space. So we want to leverage our great brands but we want to add more great brands to the stable of enviable brands we have today.

19:28
And how important last question should we be thinking about federal contracts for ammo because I'm sure there's some people who say you know what, the reason why I'm afraid to buy the stock is that contract could go away to somebody else.

19:40
Oh, goodness gracious. Yeah, that's a reason to buy us we we own 80% of the police precinct volume today we knocked down more contracts on a federal basis than any of our competitors and and that gives us a little bit of stability in top line. So when you have the best relationships from a commercial standpoint Which which we do and why we're leaders. I think it only adds to the story of why to buy this and that doesn't detract in any way.

20:08
All right, that's terrific. You know we've been behind your stock and I think 12 times earnings behalf to not just pound the table again you've done a terrific job. Chris med CEO of this day outdoor always great to have you on the show, sir. Thank you. Thank you, Jim. Good to be back. When people tell me there are no inexpensive stocks. I am going to say have you looked at this the outdoor that might be

20:32
coming up in this new wage motors doc help you achieve carbona grammar takes the way you get an edge invest like a pro access CNBC live streams around the globe, unparalleled access to CNBC experts actionable investor insight and ideas. start your free trial today@cnbc.com slash Pro.

21:06
How do we get a better return on a market that is completely obsessed with inflation? Easy, we take a closer look at what's driving that inflation. Which brings us to use cars when we got a blazing hot consumer price index number last month, up 4.2% year that roughly a third of that came from us cars and trucks. We know exactly where that's coming from right now Americans have a voracious appetite for automobiles, part of the big exodus from the cities to the suburbs or the country. It's why you know, I like the stock afford so much. But because of the semiconductor shortage, the automakers haven't been able to ramp up production. In other words, there's a vehicle shortage with us cars and trucks making up the difference if you got what got what have one, you'll bite us. But there are signs that the dynamic could be changing. And this is important people. My sources in the industry and they're darn good have told me that the chip shortage is beginning to abate, which is good news for these automakers and potentially bad news for the used car place. Most people don't have the information I have. I am telling you I have a beat on this. And then we got the mid June readout for very important index hold the Manheim us view the whole value index that showed some stabilization after rising dramatically for four straight months stabilizes is often a precursor to going down. All this came to a head yesterday when carvana the web based use car retailer and arguably the biggest beneficiary from this particular bull market and used cars got hit with a pair of dueling animal supports. Here's a stock that has surged from $22 at its lows last month, during the depths of the COVID crash all the way to 315. At its highs yesterday before a pullback to 304 today.

22:48
You can make so much money from stocks drives me crazy that someone says listen if you don't if you can never make money in anything of the index one look at this carvana but from here on out, I think it might be different carvanha is hostage to the fate of the border use core market. If you think the business looks good, it's still worth owning. If you think used car prices could come down, then maybe it's not. Which brings me to these dueling analyst reports first JP Morgan downgraded carvanha from overweight to neutral that English is by to hold. Although they kept the price target unchanged 325 would have been more meaningful had they cut it to 300. Then Jeffries reiterated by rating and then raise his price target from 375 to 400. I liked these contrasts as a way to be able to understand and understand the way stocks work. Whenever we get a pair of contrasting calls about a single stock. I like the close look, especially when the business is actually important to the broader market right now used cars are very important. But before we pit these animals against each other in some sort of Steel Cage deathmatch, let me give you some background. I've been pounding the table on this carvana for the last 13 months ever since I noticed that counter urban trade and realize the whole auto industry, we get a huge boost from the pandemic. This company's always been a fabulous grower they had 104% revenue growth in the first quarter. And while they're still losing money, their margins have been steadily improving for years, they lose money in order to be able to dominate. And I'm game with that. In short, this is an incredibly well run company. We've had him on many times with a terrific concept in great numbers. Of course, when the hyperco stocks were selling off carvanha did tumble from 323 to 220 in a matter of months. But ever since that whole group bottomed in mid May More on that later. This thing's been skyrocketing. In fact, it's already back above 300. Now, what about yesterday's dueling analysts reports? Why don't we just start with a bearish right. The downgrade from JPMorgan in fairness is downgrades go. This wasn't particularly negative, it's more evaluation call cavas within 20 points of JP Morgan's price targets that the guy's been disciplined. These analysts decided to clear victory. I'm more in favor of that because they think the upside is going to be more limited going forward. That's good analytical judgment. Why did they say that it's going to be more limited. Some of that simply due to the law of large numbers combined has had mom's run, but JPMorgan also had some thoughts on this Data the US vehicle market. They're focused on the key metric here, which is the gross profit per unit, how much carvana keeps from the average used car sale. As these analysts see these numbers are already peaking. In particular, they've run challenge checks with eat with other US car retailers, and what they're seeing is an increasingly competitive market. Then also talk about how used car prices tend to Easter in the second half of the year, given how much carvanha was run well, you can understand what the analysts JP Morgan, feeling less bullish. Of course, on the same day, Jeffries comes in and raises price target 375 400. part of a broader sector call though, Jeffries is much more sanguine about the state of the used car business. So I'm going to quote this, we believe higher pricing is being driven by tight supply. Of course, the used car industry combined with strong demand, our analysts implies our analysis implies there's roughly $3,000 in upside to vehicle pricing and quote, which translates into higher than expected earnings. I questioned that, but reasonable people can disagree. Plus carvanha is a digital used car retailer. Everything's done over the internet and Jeffries points out that the web traffic was up 106% May, while those percentages should slow going forward based on more difficult comparisons. This though, is a very strong correlation with the number of vehicles that carvanha sells. So who's right. I gotta tell you, I'm actually I'm actually leaning toward these guys. And you know, I'm very bullish. Okay. But I'm leaning toward JP Morgan, certainly more bearish perspective, in part because it seems more forward looking than the more bullish analysis from Jeffrey's while Jeffries has data that confirms the strength of the current quarter, and I liked that, we already knew those numbers would be fabulous. And given the stock's recent run, a decent chunk of that is already baked in. Plus, when you look closely at the Jeffrey's numbers, it sure looks like April was better than that, which was better than June, that's called cadence and the cadence of the quarter is going in the wrong direction, that jives with what I've heard from the rest of the industry. Don't get me wrong, I still think corbon is a great long term story. And I'd never recommend shorting the stock. But if you own it for this terrific run, maybe agree with JP Morgan to take some of the table as used car sales are showing signs of slowing in price increases. Think of it like this, and a market that suddenly loves the hyper growth stocks again, do you really want to own the one hyper growth stock that's tied so tightly to inflation and the failure of the semiconductor industry to make enough Full Feature chips when they're starting to make a lot of them? The bottom line corbon has come roaring back at but this is the rare turbo charge growth name. That's actually somewhat hostage to the border economy. I love carvana used it thought it was great. But if another analyst comes out and says you know what used cars are weakening in price, or maybe we can price. I think you can get the stock a heck of a lot cheaper. Let's go to Connie in Washington, please. Connie

27:49
boulia jam. Beautiful, beautiful Makayla to Washington.

27:54
I'm a first time caller and a longtime listener and a member of the accidents alert class where we shall catch you remember the club. Thank you. How can I help? You're? You're welcome. With Shopify heading into its annual Developers Conference. In its recent run up hitting an all time high.

28:12
Do you recommend adding to my current position holding our selling?

28:16
I think it goes up Connie. I think it goes up. I think that meeting at United gate is going to be bullish. The numbers coming out of Shopify are just insanely good. I think you've got a great one. Connie, you know, we own diffraction alerts. We sold it too soon, but we made a profit you never pick yourself up just the losses. But thank you remember the club and Shopify I think goes higher. carvanha has come roaring back. But I think this company is a little more hostage to the porter economy than I like right now. And to the semiconductor industry, which tends to reinvent itself if you owned it for this amazing run. Nobody will get angry if you took some off the table but for made money and as Starbucks welcomes more customers back entering here of isolation. All find out if people are itching for a coffee break when I sit down with the CEO, and there's a lot of revelations about the word revelations coming I'm revealing what triggered the toward rotation most didn't see coming later on in the show. And lawyer calls rapid fire in tonight's edition of the fight and spoke correctly. But lightning round so stay with Kramer

29:26
Can we please take a moment to appreciate the fact that the world is probably going back to normal. I never thought I'd be so excited. But business as usual. For example, After more than a year of only filling takeout and delivery order Starbucks has finally started welcoming its customers back inside of stores. They're even letting people bring their reusable cups again, which sounds like a little thing that you remember there's a coffee cup shortage and of course we want to be good to the earth. I'm loving this returned in Rome see so let's take a closer look with Kevin Johnson is the presidency of Starbucks learn more about what he calls the great human reconnection Mr. Johnson Welcome back to Mad Money. Jim, I'm vaccinated, caffeinated. And it's great to be with you and the crew at CNBC today. Well, I couldn't agree more about being with you, I don't think anyone really has the pulse around the world about what it's like to reopen, then you, you're all over the world. You're great United States, you're in China, you're in Europe, what is it like to work and sell and be a customer Give me the whole panoply. The reconnect, I

30:24
tell you, you know, after after a year, year and a half of sort of living in isolation through this pandemic, all of humanity is ready to reconnect. And, you know, we see that happening, certainly right here in the United States, but it's happening in markets around the world. And it is fantastic. And so we expect this is just going to continue to unfold in a positive way as more and more people on the planet get vaccinated. And Starbucks is here to serve. And our partners are rising to the occasion. Customers want to be a part of a community again, and you know, come back to the familiar experiences they had pre pandemic, and we're open and we're ready for business. As more and more areas get vaccinated. Do we actually see better same store sales in better than even 2019? Yeah, we do, Jim. In fact, here's we study this, and here's what, what is unfolding in markets around the world. And we saw this in the United States. As soon as we got to between 35 and 40%, of adults vaccinated, the government started to ease restrictions, and it was immediate consumer mobility shot through the roof roof. And so we started seeing traffic increasing in our stores. And certainly, you know, we shared even last quarter that we were having a positive two year comp, fairly strong positive two year comp, as we exited last quarter. And that continues to unfold. We now see that happening in Mexico, we're starting to see that happen in Europe, it's unfolding. So every market around the world is going to see exactly what the United States has experienced here over the last 90 days. Alright, so

32:00
I look the press tries to put a negative spin on 10 is a cup shortage. I look at it a different way. You've got reusable cups, which are great for the planet. And maybe that'll help you with with the paper competition. Where are we really in this cup shortage.

32:13
Once you hit there's no cup shortage at Starbucks. I don't know how that story got got started. But we've got plenty of our hot cups and our cold cups. And as you said, we just reintroduced reusable cups that we had had paused during the pandemic for safety reasons. But you know, customers are back in our stores demand is strong, and we've got plenty of cups to serve them.

32:35
Alright, so Kevin, if I was speaking a couple CEOs in retail, and they all expressed a point that it's become really hard to work in retail, because people got angry and people were on edge and people are like, that's no Vax. Are you're in are the breezes, your associates, in general having a lot of churn? are they leaving, or are they stay?

32:57
Well, Jim, candidly, the retention that we've had with our green apron partners here at Starbucks has increased. Wow. And the reason retention has increased is I believe, we took care of our partners through this pandemic we did we did no involuntary layoffs or furloughs. We gave all of our partners economic certainty. We leaned into this and gave a significant wage increase at the beginning of this calendar year, we're preparing to do another one. And so, you know, look, we don't take for granted how hard these jobs are. But I tell you, I'm so proud of my Starbucks partners in the stores, they have risen to the occasion, and we're going to continue to take care of them.

33:34
Let's get another canard that presses you have because of the pandemic there's an inability to be creative. Have you stopped being creative in your dreams?

33:44
Well, Jim, I I think if you look at the demand for some of our newest beverage platforms we've introduced, you know, we're seeing phenomenal customer reception to those new beverages. I think you just take the shaken iced espresso beverages when we've launched here in the last in the last few months, phenomenal reception by customers. So, you know, we're pretty excited and we see customers more and more customizing and creating their own beverages. And because we're in the business of handcrafted beverages personalized for each and every customer. I think there's a tremendous amount of innovation that that has come to Starbucks and our customers are part of

34:22
how are we doing throughput? We don't want those long lines at the airports I know there's a franchise we don't want long lines anywhere and there's open space in retail can we get more Starbucks sweet late, wait less?

34:34
Well, you know, Jim, we were going through trade area transformation, which which means we are reap we are in the process of repositioning about 600 stores in the United States. And we're well into that. And you know, in many cases, that means where we we've got a store that maybe could could be relocated to better serve the community of customers. We've we've made those moves and so that is creating more opportunity for us to serve customers. It's it's enabling us to elevate the customer experience, you know, but that said the volume of customers coming into our stores is a record. Wow. And so you know, we are we are doing everything we can to ensure we were serving those customers in a timely fashion. Certainly, you know, drive thru mobile order, but now with our cafes, open customers are in the stores and they're loving it.

35:20
I just got to get back to this. There are no shortages within the supply chain of Starbucks. I mean, I don't want to think the price is completely wrong,

35:28
right. But at any charge, that we've no shortage of cops, no shortage of coffee, our supply chain in our breakfast sandwiches and some items in the bakery case, you know, they have had to ramp up staffing. And so we've had some shortages in the baker case, that certainly is true. But you look at what we've done over the last couple of months to really get us in a much better position. And you just think about it. When you turn turn this on so rapidly, it really tests the elasticity of the supply chain. And if there's one area that we've been focused on, it's it's our supply partners who assemble breakfast sandwiches and some of the food items in our bakery case, that's where we've seen some progress. One

36:06
last question. I've always regarded you and your predecessor as being the best kind of ambassadors, we have the United States. If there are countries that you feel do not have religious freedom like China, how can you influence en de Bie to be better actors?

36:23
Well, Jim, look, we operate at four markets around the world. And you know, specific to China, we've been in China now over 20 years. And I think the most important thing we do is when we show up in a market and we show up in China, we have built Starbucks in China, for China. Okay, so we hire talented people, we, we leverage the artists and craftsmen who build our stores, we're helping coffee farmers and eunan. And I think by leading by example of how we can take care of all stakeholders, starting with our partners, the customers we serve the communities we're a part of, you know, we think that leading by example, influences other businesses to do the same. And by doing that we hope to make the world a better place.

37:03
Well, you always have you and your predecessor, Howard Schultz, I've got to always give him credit. He doesn't get enough. And we know that Kevin Johnson, Starbucks president ceo, congratulations on the reopening and human connection. We all need it. So always great to see. Like this, Kevin Johnson, and I've got to tell you, that is a message. That is a one positive message. And of course, a correction of the media who asked to find something negative about one of the greatest companies we have in the country. Our books. SBU x going hard, man, please back up.

37:37
Just chill. Chill man is in the house. He's happy. The lightning round is coming up when bad buddy returns.

38:00
And then the lightning round. Are you ready to close over Susan in New York. Suzanne?

38:07
Give me irreplaceable and unbelievable chills. Great because you've been watching and listening to you for decades. We won't go there. Back in September, you had maker made a recommendation relative to horizon for yield. It's been trading in a very, you know, very narrow range, which is fine. I just want to know what your thoughts are just keeping it to the four points plus yield.

38:34
I hear that the quarters going to be better than expected. I think that they're doing business with Apple. I want to buy the stock of varizen. Gail in Ohio gal. Hey, Jim, what's up? Thank you for taking my call tonight. Absolutely.

38:54
And also for us several years ago on Ross. But tonight, I'd like to ask for your opinion on greenbox POS symbol g Bo x.

39:05
You know, it's still one more mobile application free wallet. Here's what I tell you. I say that that means you should buy paper towels. I think paper towels is the winner, our own best of breed. Let's go to john in Florida john.

39:20
Yeah. Hi, Jim. It's john Kay and donate in Florida, Georgia. Amen. All right. It's been a while or you've been way too long. I'm doing okay. Thank you What's happened? Well, the stock I'm interested in Jim is the view I believe. I believe it's pronounced view six views zx

39:38
symbol views. Ei. Yeah. Optical optical optical. too hard for me. I have to do work on that optical. A billion dollar company gotta learn more. How about we got a Katherine in

39:51
New York, Katherine. Hi, Jim. Thank you so much for your wisdom. I really nice. Thank you. I mostly am invested in big tech thing and my biggest holdings are Amazon and Nvidia and I thought I should have some variety so I recently bought some k ami Do you think

40:14
I think they're not going to be a lot of pipelines since the President doesn't want him there for that makes me feel the scarcity value and I think you should be buying Hey, Mr. Lazar

40:29
is sponsored by TD Ameritrade. Coming up stay models primerica a rotation is a humbling animal like Kramer can help you famous. Next.

40:49
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41:29
you're in the middle of one of these sector rotations where one group keeps roaring another group gets plastered. It always feels like it's hard to believe right? Until it's almost over at least at which point everyone starts acting like the winners are unstoppable. Then you go back a few weeks later and kick yourself for buying industrials at the top of steering clear the super growth stocks near the bottom. Yeah, a month and a half ago the rotation into the industrials ended and a new rotation into super growth stocks got rolling hit no one seemed to talk about it or even notice it. Don't believe me? Would you take a look at the recent action in these stocks in snowflake DocuSign CrowdStrike Not to mention squared Tesla paypals z scalar. Same goes for Roku Bumble app Levin which we talked about last night trade desk. This streaming video advertising play that soared stock surged another 16% on some bush news from Google. They're delaying the new privacy policy that would make it harder for advertisers to track your behavior online. When you look at all these hyper growth games, you'll see a bunch of stocks that had been stuck in a hideous decline before they bottomed right around nice metal. But since then, they've been relentless run higher. She used to back in see okay, what happened I went to the Wall Street Journal a neighbor you look back at what happened, mate? Well, you know what happened may 12. It wasn't the pandemic. It wasn't politics. It wasn't earnings. No, what happened was we got the hottest CPI numbers since 2008 bonified barnburner of 4.2%, which made a lot of money managers freak out about inflation. Never mind that 1/3 of that increase came solely from us cars and trucks. The biggest price increase since we started collecting these numbers in 1953. More importantly, the CPI figure convinced the big institutions that no matter what he said, Jay Powell will have to change as easy money attitude in order to tamp down on in seemingly out of control inflation. Yet these money managers did a two step they decided to vote against pal that very day. They bought they bet that he'd have to fold by raising interest rates sooner than expected when the feds about the tighten. The Wall Street playbook says you need to sell the boom and bust cycle technicals and buy the kind of stocks that thrive during a slowdown, like the supercharged growth names. That's what spurred the rotation. Yes, a one two punch raise rates recession by high growth. I know I certainly didn't see it coming. I thought the big jump in the cybersecurity stocks can be explained by the colonial pipeline hack nearly shut down the supply of gasoline to the east coast. I never dreamed those stocks were roaring because hedge funds had fallen in love and expensive secular growth plays again, that sell on a multiple to sales, not earnings, the initial injection zoom and DocuSign. I wrote them off as collateral buying from the Delta COVID Varian, maybe people were worried about another lockout. Bradley I had an answer for every single one of these tech stocks, the bottom the May 12. Everyone, because I didn't want to believe that Jay Powell was wrong. I still don't think he's wrong. Many of these inflationary pressures have already started to paint, but I did misjudge the power of Wallstreet groupthink. Remember, in the short to medium term, it's the big institutional money managers who control stock prices. There are the marginal buyers and sellers. And most of these people are convinced, rightly or wrongly that the Fed will have to slam the brakes on the economy in order to tamp down inflation ahead of when people think, even if that results in horrific crash landing that would benefit these companies. It is sobering to look back at that moment because if you read the cut news stories, you would have seen endless insights about growth versus value. How this market lugged value as much as it hated growth in love this cyclicals the industrials smokestacks Of course value is always quote for the cyclicals, right? And that's exactly when they peaked right as the hyper growth stocks came roaring back their headlines those last few days around that may 12. Were all about how you had on the industrials. The thing about rotations though is that they're temporary. Once they start to feel permanent, that's often a sign the move is coming to an end. So if the April consumer price index triggered this current rotation into Junior growth tech stocks, maybe the June CPI can reverse it, assuming it shows that inflation is coming down. But the bigger point is that the market is a humbling animal. Hardly anyone saw this coming. I never heard a saw argued that the CPI would cause such a powerful rotation into these stocks hit that's exactly what happens. You can tell from the charts. I like to say there's always a bull market summer and I promise try to find it just for you right here on Mad Money On Jim Cramer seeing him while the news was Shepard Smith storage now.