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Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 6/26/24
Homes.com knows that when it comes to home shopping, it's never just about the house or condo. It's about the home. And what makes a home is more than just the house or property. It's the location and neighborhood. If you have kids, it's also schools, nearby parks, and transportation options. That's why homes.com goes above and beyond to bring home shoppers the in-depth information they need to find the right home. And when I say in-depth, I am talking deep. Each listing features comprehensive information about the neighborhood complete with a video guide. They also have details about local schools with test scores, state rankings, and student-to-teacher ratio. They even have an agent directory with the sales history of each agent. So when it comes to finding a home, not just the house, this is everything you need to know, all in one place. Homes.com, we've done your homework. My dad works in B2B marketing. He came by my school for career day and said he was a big row as man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laughing me to this day. Not everyone gets B2B. But with LinkedIn, you'll be able to reach people who do. Get a $100 credit on your next ad campaign. Go to linkedin.com/results to claim your credit. That's linkedin.com/results. Terms and conditions apply. Linked in. The place to be. To be. Money. I'm here to level the playing field for all investors. There's always a more market summer and I promise to help you find it. Man, money starts now. Hey, I'm Kramer. Welcome to Man Money. Welcome to Kramer. I'm build my friends. I'm just trying to make a little money. My job, I just entertained but to educate to teach you about this business. So call me 1-800-743-CBC. Please meet your Kramer. Maybe we have it all wrong. You know, maybe we've got the consumer all mixed up. We keep talking about how the consumers over-strach, just strapped, sapped. But what if the consumers just fed up with paying higher prices for so many things, for so long, and has grown full? And we'll easily jump in a bargain but has no time for those who have not rained in their prices even as COVID's been beat. The New Frugality is the mindset and we, you and I, can profit this incredibly powerful, but I think hitherto unrecognized trend until tonight. See, that's my conclusion. If you're day with a Dell and sub-16 points, that's to be advanced point one since Trentonastic, game point one point four and nine percent. And that's got some pretty good mega caps, of course. Now, I know this New Frugality thesis isn't obvious, but you know what that is? It's because we keep getting thrown off the scent. Take yesterday. We learned that the CFO of Wal-Mart, John David Rainey, total straight shooter, gave a talk where he said it'd be difficult for his company to beat its excellent first quarter. That was taken by Wall Street as what's known as a guy down. A bummer of a forecast and Wall Street stock, well, at Wal-Mart stock, well, it got hammered. But if you do a simple chat GPT query about what Rainey really said versus what he said on the last conference call, you'll find that he used almost the exact same quote. Basically, that whole talk was a non-event yesterday. So, if you sold Wal-Mart yesterday off the GLIB analysis, the Wal-Mart's having a sub-optimal quarter, then you got it. Wal-Mart's everyday low price model and their rollback and prices for thousands of goods has made the merchandise incredibly appealing to the newly-frugal consumer. Business remains incredibly strong, and the stores have never looked better. A lot that Wall Street ever goes to one of their stores. I'd like to invite them. They would really enjoy it. Now, that's the same reason why Costco is such a strong stock. It's amazing how their pressuring suppliers to rollback prices. And every time I look at feels like there's a new Kirtland signature brand, their house brand, that is more by them and a lower price and is in better, I gotta tell you, it's a better shape than any of the big brand names. I love their product. I always feel that Costco is in my quarter to my corner versus the greedy suppliers that want their prices bad. They don't want, they want lower their prices. They want lower prices where they should have been. They saw all the supply chain issues, right? They saw all the transporters. They saw the roll-cross inflation. But other than Costco, who's in my corner? I mentioned TJX last night as an all-price retailer, right? That's been getting the pick of the apparel litter because the full priced outfits are basically just flat-out losers. They don't fit the profile of the newly frugal consumer and where she wants to shop. TJX though, balance. I highlighted this last step with that piece of an Ollie's, the ultimate and closed-out Virginia's by the way. It was retailers, by the way. Matt Bois from Jay Pimor, best retail analyst at Sumerter, he's noticed that Big Lots, another not-so-hot retailer, is one of the ropes. If Big Lots were to liquidate to be almost 1,400 locations for Ollies to potentially pick and choose from to expand dramatically increasing its footprint. Now, not to mention all the cheap close-up merchandise they can pick up for next to nothing. That would cause the stock of Ollies to soar and why not? It should. New frugality. The other two off-price plays, raw stores and brilliant stores are both performing at a high level. We know apparel inflation has been sticky in the consumer price index but these four off-price chains are cutting the price of apparel aggressively. New frugality. Again though, we keep getting thrown off of my thesis by smokescreens. You might think, wait a second, the consumer's clearly getting blasted because of all the dollar store stocks they're getting crushed. Aren't they the last passion of frugality? No, that would be wrong. They're not. I think people have realized that dollar stores have become relatively expensive places to buy goods. They raise their prices very aggressively during COVID, even calling them dollar stores as a misnomer now. They definitely don't have the lowest prices. That's Walmart. That's Costco. The younger consumer, not the ones my age or even the 20 years younger ones, the ones who were in their 20s and 30s and live with this, they don't have to measure what's going on. They measure price versus volume all the time. They can comparison shop much better than Sam Walton could because they've got constant internet access their whole lives. They won't let the dollar stores get away with their most latest round of inflation. They want prices lower so the dollar store business declines. Don't spoil my new frugality thesis because if you actually care about finding bargains, you don't want to shop there. On the other hand, look at the success of Temu and Xi. There's two Chinese companies. You go out of all Asian companies. You go online, you see their prices and I have to tell you, they seem like mistakes because how could anything be so cheap? But no, the prices are actually real. The mistake is not taking advantage of them. Although sometimes tastes may come into play, least periodically, and as says someone who bought a lot of stuff from Temu for my wife, only to see it in the blue recyclable trash can the next day. Ouch. Now when I said my feelings were hurt, she said, "Why?" She threw it in the right bin. Let me give you another example. A little less anecdotal. Carnival reported tremendous numbers yesterday. You might think there's nothing frugal about taking a cruise but what could be more discretionary going on a cruise? That would be wrong. If you want to take a vacation, some of these cruise options are insanely cheap. Carnival's inside rooms range from $150 to $245 a night. Real equipping 175 new regions, 245. These prices are phenomenal. I mean, kind of ridiculously low when you compare it to hotel rooms and airfarers, right by far the most value-conscious way to take a vacation. That's the new frugality. Yesterday we talked about the horrendous sales of pool court, which sells all sorts of sweeping pool-related goods. I thought the problem with an issue was consumer pushback. It's true that with rates too high, maybe more expensive to take out a home equity letter to build a pool, but I want to take you on this one. You know, I came up with an alternative theory, the cost of labor, which has not yet come in. It's a big issue. Paying someone to fix up your home is borderline extortion right now because the contractors hold all the cards. It's simply become too expensive for most homeowners to afford. You need to see these costs come down before you see more pools being built. The cost of labor is too high for many homeowners. We've seen new boat sales plunging too. Now, some of that's because they're pricey, but again, the frugal consumers cagey and clever and using the web constantly get a better deal. Guess what they found? They actually love boating more than ever, but they know it's too expensive to buy a boat. So what do they do? Brunswick bought Freedom Boat Club, a rental service. You don't have to keep up with maintenance or docking fees or financing costs. You just bar the boat and return it when you're done. The value conscious way to go boating, I am sure people, yes, indeed, who they rent it and they say, oh, I ought to have one, but I'm telling you, the renting society is winning the beating the owning society. You wonder why the sales and CVS and Walgreens have worked tomorrow, but it's simple. I don't know soul thinks that those stores are bargains. In the past, the drug stores were time savers. You could always drop in, get what you want, get out in two minutes, but the frugal consumer just doesn't spend money at these places now that everything's locked up behind plastic. Amazon tends to sell almost everything you can get from a CVS or Walgreens and they usually deliver it the next day or even the same day in many parts of this country and at a lower price. Order in the morning, get back home. It's right there in your ports. It's waiting for you. Again, this younger classic consumer knows pricing better than any other retailer and that usually puts Amazon ahead of the game. Let's not forget restaurants. Today, we've got the flyers from McDonald's. I don't know if you're loyal. You might have seen it. They got a $5 meal going. They finally had to bring it back after raising prices endlessly. But I don't know if Biggie D's can get traction and not just because of the small fries. Texas Roadhouse and Brinker are offering $11 dinner. There's much more food. They got great liquor options. They're so cheap that their sales are booming. Brinker, which is owner of Chili's, has leveraged the newly frugal consumer to the hill and played it up on social media. And that's why that stocks from the best of the group. So let's suspend the notion that the consumers totally strapped for cash. That's wrong. The bottom line is the consumers finally pushing back and demanding better prices. We're no longer going to be counted to pay more than what something seems to be worth, which both very poorly for those stores that have yet to roll back their prices, but very well for the ones I mentioned. Bottom line, the consumers no mood, no mood to pay more for less. You just can't let the distraction of the false characterization throw you off the scent. If you offer the consumer a real bargain, not a dollar store one, that consumer is going to take it. Ryan in Michigan, Ryan. Hi, Jim. Third time caller. Thank you for all your input. Third time. I love that. We had a third time our last study. He turned out that he had the stake. And he loved it and gave us a nice note. What's going on? Thinking about my bought AT&T about a year ago at the low and it rallied nicely this year and has recently hit a 52-week high. Thinking to keep that at the more Verizon T-Mobile, I like to yield on Verizon. Okay, look, ATT's come back in 52-week high, but, you know, that's kind of from a low level. T-Mobile's got growth. I like growth. I am a big believer in growth. I want to go with T-Mobile. Now, look, we need to stop with the notion of the consumer strapped for cash. Instead, accept that the consumer is fed up with paying unfair prices that were jacked up during COVID and needs to come down now. If they're offered a bargain, they will gladly take it. Maybe the guys who are extortionate should realize that Costco and Walmart are winners. Oh, man, my tonight. Levi's is pulling it through. I'm going straight to the source. Let's find out what's really going on here before we just dump the stock, please. And speaking of apparel, winners emerge in the space that we have in focus stores. Now, I'll reveal what it is and why I think you can keep running and why it's got the wrong name and it isn't R-H. And paychecks has a solid rate on the state of medium and small businesses and with investors to turn about economic growth. I'm getting a sense of where we stand with the CEO, really. So, stay with the newly frugal Kramer. Don't miss a second of Mad Money. Follow @chimcramer on X. Have a question? Tweet Kramer #MadMensions. Send Jim an email to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. Miss something, head to madmoney.cnbc.com. My dad works in B2B marketing. He came by my school for career day and said he was a big row as man. Then he told everyone how much he loved calculating his return on ad spend. My friend's still laughing me to this day. Not everyone gets B2B. But with LinkedIn, you'll be able to reach people who do. Get a $100 credit on your next ad campaign. Go to linkedin.com/results to claim your credit. That's linkedin.com/results. Terms and conditions apply. LinkedIn, the place to be, to be. AI might be the most important new computer technology ever. It's storming every industry and literally billions of dollars are being invested. So buckle up. The problem is that AI needs lots of speed and processing power. So how do you compete without cost spiraling out of control? It's time to upgrade to the next generation of the cloud. Oracle Cloud Infrastructure or OCI. OCI is a single platform for your infrastructure, database, application development and AI needs. OCI has 4 to 8 times the bandwidth of other clouds, offers one consistent price instead of variable regional pricing. And of course, nobody does data better than Oracle. So now you can train your AI models at twice to speed and less than half the cost of other clouds. If you want to do more and spend less like over 8x8 and Databricks Mosaic, take a free test drive of OCI at Oracle.com/advanced. That's Oracle.com/advanced. Oracle.com/advanced. How did a master cyber criminal and a Russian oligarch that ties to the Kremlin hack into America's financial system, scamming millions? CNBC presents the crimes of Putin's trader. Listen wherever you get your podcasts. Tonight we got results from Levi's Trousing Code. See, I caught a denim company with a stock that's nearly doubled from its lows last October. It's better than what I'm hearing about the consumer. This type of Levi should put up a tech leave look like a mix quarter and it ever so slight revenue missed paired with a substantial five cent earnings beat off an 11 cent basis. While management left their full year forecast intact, not ideal after earnings beat, they also spelled out that they expect the five cent earnings hit from their new logistics strategy and an increased marketing budget in the second half, along with currency fluctuation. In other words, despite these new costs and investments, Levi's can still hit the number they previously guided for. That's exceedingly positive. You don't get a stock up 40% for the year for doing nothing. Sometimes this market has trouble appreciating nuance. So let's take a close look with Joel Goss. She's the president and CEO of Levi's Trousing Company to get a better real situation. Ms. Goss, welcome back to ManBuddy. Hey, Jim. Great to see you again. Great to be here. You've just been crushing it. Taking advantage of what is a remarkable wave in denim and then really augmenting it. Tell us how you were able to, with inline revenues, crush the earnings estimates. Yeah, well, to that point, Jim, I mean, we were thrilled to deliver another strong quarter. A 8% reported up, 9% constant currency. And to your point, with a very big earnings beat, and we're expecting this momentum to accelerate in the back half of the year. And first and foremost, it starts with growth. And our DTC business is just on fire. I mean, we delivered another double digit quarter. We were up 11%, driven off of nine consecutive quarters of strong comp growth. And then the second shout out I would give you, Jim, is on our women's business. I mean, our women's business, we've been at this for a while, but we are amplifying it and sharpening that strategy. And it's working. So our business is up over 20% in our DTC channel. And that's your point on profitability. That's a very big focus. We delivered record gross margins this quarter and are driving a lot of efficiencies through our key enabler project fuel. Okay, talk about the strength of the consumer. A lot of people are hearing about the about the album. I feel if they get a deal, if they get a bargain, if they like something, they're spending it. It really is not a consumer who's strapped as consumers, just more particular. Yes, I completely agree with with you on that. I mean, we see our consumers as being really resilient. And we're excited about the category. I mean, as the category leader, it's our responsibility to drive a lot of innovation and excitement. And I think we're doing that in a couple ways. One is driving the next evolution of the trend, which is going baggier and looser and wider across both men and women. And and then also this whole head to toe denim lifestyle. I mean, that's really our new focus is yes, continuing to own jeans, but taking that denim top to bottom, things like denim skirts and denim dresses, which historically, not being big, big businesses for us. I mean, they're exploding of triple digits in the quarter. Let's talk about you talk about fashion, talk about excitement. Obviously, anybody who likes Beyonce, like my, my wife who plays this endlessly, talks about the new album's country album, but it's got a Levi Strauss Levi's jeans song. And what's that meant for your business? Yeah, well, I'd first say, I mean, we could not be more humbled, more honored, and of course, excited that the fact that Beyonce, who is such a global cultural icon, would name a song after us. You know, and this is, this is, we've had a relationship with her over decades. So like I said, we're just so honored about this. As it relates to the business, our business is really being driven off of the key strategies that we spoke to, strengthen our direct to consumer channel globally, strengthen the US, in particular, our biggest market, three quarters now of growth, what's happening with women's and what's happening with denim bottoms with this next fashion cycle. Well, when I look at things that I know some people are trying to sell the stock debt, I look, the stock's been such a home run, I could understand if anyone wants to take profits. But the only thing, the nipping I would have was that I was surprised that Europe was weaker. Maybe you can explain that to me. Yeah, it's a Europe actually met our expectations, Jim, and we saw success, sequential improvement since the first quarter, and we're still believing that we're going to see Europe return to growth in the back half. DTC was positive, our wholesale is improving, and we expect both channels to improve in the back half. Across the strategies, we've been talking about women's denim dressing, denim lifestyle, you know, our tops business. That's been an area of focus for some time. We doubled down this last year, did a whole reset on our top's business growing over 20%, and that impacts Europe as well. Okay, excellent. You did mention something just now with wholesale. I was quite impressed. You had the inflection. I was been waiting for it and you had it. What does it mean for your bottom line? I think it's an important question because when we talk about DTC first, which is operating the company this way and DTC being our key growth driver, wholesale is still really important, right? I mean, we're going to reach, continue to reach millions of fans around the world through wholesale. We saw improvement from Q1 to Q2. We expect that to continue really driven off of number one product, right? Driving relevant product. We have so much excitement. I was talking about bag or loose here. We're also bringing a lot of fabric innovation. I mean, it's summertime, and we've got a great new performance, cool platform that we're launching around the world. So it starts with product across both channels. Women's, again, is outperforming. I should actually mention that women's claim the number one market share here in the US, and it's doing really well around the world as well. So wholesale, I'm excited. The other thing it's worth mentioning is last year, this time, we were struggling with a lot of headwinds in our supply chain. That's all behind us. So we have seen a step change in execution from a year ago. Now, I know Mr. Singh, Harman Singh, he's just a great CFO. One of the best, I've known him for a very long time. So why don't you just tell us how he's doing with project fuel exploration for what's going on there? Yeah, so, great question. So project fuel is, it's going to be a multi-year initiative. It really is a key enabler for us making this pivot to be a DTC first, you know, retailer, omnichannel retailer. And we have our sights on growing this business. Again, please, what we've seen in the last couple quarters, but growing this business to be 10 billion and expanding our margins to 15%. And project fuel is a really critical part of that. We have multiple work streams across the company. You know, I'd point to a couple. One is, you know, we talk about being a retailer, it's getting that productivity and profitability up in our stores. You saw our numbers this quarter, we're making good progress, you're seeing the results. That's going to continue forward. Rewiring the company to be faster, more agile. So our hope will go to market process is getting a lot tighter and shorter. That's another one, indirect procurement. I mean, the list goes on. And again, great confidence that we're going to ultimately do, you know, drive a lot of growth up to that 10 billion, 15%, but especially on the margin side, you saw at this quarter. And you can expect to see a lot more in the coming months. Yeah, look, when you have gross margins of 60.5% of 180 base points, I'm trying to think about what other, what other power companies are delivering those numbers. They're very hard to come by. I don't know, maybe you just quickly explained that this is not an easy number to reach. You are absolutely right. And it is a good bellwether to the health of the business. And we have many work streams that are feeding that. I mean, first of all, it certainly starts with our cost of goods. And as you said, that number, it's a record number for the company. We are so proud and the teams have been working really hard. So relative to our supply chain, cost of goods coming in, exceeding expectations, our DTC penetration, driving a lot of great favorability there to our conversation we were just having, higher full price selling in our direct to consumer channels. So all of these things are helping us support that gross margin, which as you know, turns into gross margin dollars, which helps us get that leverage on the bottom line. Well, just terrific work. Thank you for coming on. Once again, the stock has been a rocket. Some people may not understand, just a little harder to understand this quarter than it was the previous one, but the fact is the bottom on his fabulous top line is good. And you're doing a fantastic job, Michelle Goss, President and CEO of Levi's. Thank you. Thank you so much, Jim. Great to be here. Absolutely. And then Mike's back in. My dad works in B2B marketing. He came by my school for career day and said he was a big row as man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laughing me to this day. Not everyone gets B2B, but with LinkedIn, you'll be able to reach people who do get a hundred dollar credit on your next ad campaign. Go to linkedin.com/results to claim your credit. That's linkedin.com/results. Terms and conditions apply LinkedIn, the place to be to be AI might be the most important new computer technology ever. It's storming every industry and literally billions of dollars are being invested. So buckle up. The problem is that AI needs lots of speed and processing power. So how do you compete without cost spiraling out of control? It's time to upgrade to the next generation of the cloud Oracle cloud infrastructure or OCI. OCI is a single platform for your infrastructure, database, application development and AI needs. OCI has four to eight times the bandwidth of other clouds offers one consistent price instead of variable regional pricing. And of course, nobody does data better than Oracle. So now you can train your AI models at twice the speed and less than half the cost of other clouds. If you want to do more and spend less like Uber 8x8 and Databricks Mosaic, take a free test drive of OCI at oracle.com/advanced. That's oracle.com/advanced. We keep hearing that consumers are strapped for cash that they're just not spending like they used to and it's wreaking havoc and retail. But all retailers are not created equal. Some are more equal than others. When you go closely, there's still plenty of winners in this group. Consider the case of Urban Outfitters, which you also know is anthropology, free people, FP movement and newly. That's N-U-U-L-Y. If you don't know that, the latter is being in a parallel subscription service aimed at women. Honestly, I haven't given this story enough credit in the last few years because it's spent decades lost the wilderness. But now the stock has more than doubled from its lows set just over two years ago. So clearly something's going right. Yep, at the moment, Urban's doing incredibly well. It's just hard to notice because the company has so many moving parts and the namesake brand is the worst of them. Other than Urban Outfitters, the store though, Urban Outfitters, the business has a lot going for it. When the retail side, which is over 90% of the business, Urban's got a network of 7 or 19 stores and a quality digital business. When you look at their sales by brand, the namesake Urban Outfitters brand is no longer number one. Did you know that? Now anthropology's number one, counted for 43% of last year's sales. Urban Outfitters barely edged out free people's segment for second place last year. Imagine making up 26% of the company's sales versus 25% for free people. This year, free people will be larger because it's growing rapidly while Urban Outfitters' nameplate keeps shrinking, stagnating, shrinking. I don't know, not good. Oh, this is a problem. It's all a problem with the exception of newly the apparel subscription service that they launched five years ago and that's still very much in pure growth mode. I don't even mind that doesn't make any money yet because less than 5% of sales at the moment, but it is growing like a weed and I love the business model. Put it all together, you can understand why the company did so well as your Urban's adjusted net sales were up 7.7%. I mean, you drill down, some of these brands are on fire. Anthropology had 12% same store sales growth. That's incredible. Free people, same store sales were up more than 21%. That's been consistently high. It's only Urban Outfitters that keeps dragging things down. Comps fall in nearly 14%. That's not good. They took a small hit on their tiny wholesale business, but that newly subscription service, get this. 89% adjusted net sales growth with average active subscribers of 82%. In the end, the company earned $3.25 per share. That's up from $1.75 the year before. That is spectacular. Urban Square. Just as important, Urban came into the new fiscal year with tight inventories, meaning they didn't have to do much excess, merchandise, didn't need to aggressively mark down in order to get out of the stores. There were not a lot of promotions, except again at the quarter of Urban Outfitters brand. Now, last year's overall numbers were excellent. They reported an ugly fiscal fourth quarter in February, with disappointing revenues, same store sales, and earnings. Even though Urban had a great holiday season, the fourth quarter includes January, and the business accelerated rapidly that month. January is not that important, but people don't think like that. At the time, management made some mixed comments about how February was going. They said, same store sales were a bit softer than the fourth quarter, but ahead of their plan for the current quarter. Given that Urban doesn't give explicit guidance, investors were left to interpret that amorphous statement on their own, and many of that regularly. That definitely happens, by the way. If companies have to understand, if you leave it somewhat tepid, they're going to say it's extremely tepid. It doesn't help that the company made some positive pre-announcements at the conference. The previous month, making people feel like management might be clueless, or are they ever not clueless. The stock had run up to $47, right before the report in late February, came down to $41 the next day. And then, as Wall Street got even more worried about the consumer, the stock fell even further. And then Jeff recited it with this brutal downgrade mid-April, citing proprietary data, showing a notable deceleration in foot traffic. Keep that proprietary data from me, please. The stock got hit again, falling to $36 in change, but that was rough patch in March and April. It was a head fake, because on May 21, Urban Africa supported a terrific quarter. Better than expected sales. Rising more, declining inventory, 15 cent earnings speed, or 54 cent basis, everything you want to see. Management said they had high single-digit growth, and their digital growth paired with low single-digit growth in brick and mortar sales, that's fine. Breaking that down. Listen to this. Free people delivered 17.1 same-store sales growth. Street was only looking for $14 before. Anthropology had $10.4. Street was only looking for $8. The only fine meal in many games was Urban Outfitters. The company was the Urban Outfitters' brand, which saw a worse than expected the same for sales decline of 13.7%. See the pattern coming here? Now, wholesale is finally growing again, thanks to the strength of Free people. That means they're selling it to other stores. And that was something, by the way, that Macy's called out specifically. Newly, Urban's subscription business had 51% sales worth of all good. On the conference call, founder, chairman, and CEO Dick Hain sounded almost gleeful, touting the strength of anthropology and free people. What you also know that Urban Outfitters' brand is now under new leadership, and customers seem to be responding well to the changes that the new team is making. Hain even hinted at some encouraging signs for the Urban Outfitters' banner in May. I don't know. I also like what Hain had to say about the consumer. He sounded a little more nuanced than the typical retail executive, which is why we felt, and it felt different. Listen to this. As a group, we believe they are currently in good shape, enjoying both solid job security and incomes that are rising slightly faster than inflation. They are still excited by our new fashion offerings and traffic and stores, and online remains strongly positive. But their purchases are slightly more considerate than last year, end quote. Hain then sums it up, quote, "Overall, I would classify the consumer mood this versus last year as enthusiastic rather than exuberant. We believe this new mood, it's healthier because it's more sustainable," end quote. I like that. Now, it sounds good to me, right? But Urban stock actually dropped 4% the next day, although rebound almost immediately, and hasn't looked back since. I bet it can keep running as Urban sells for less than 12 times this year's earnings estimate, and if they can keep beating the numbers like last quarter, the stock will look even cheaper in retrospect. In the end, Urban Outfitters may not seem like all that enticing at first, but that's because it's a complicated story, and people don't have any ability to discern a complicated story like, well, we must trust this complicated story tonight. But when you do the homework, you realize that Urban's got something very special going on here. The company's largest brand, anthropology, excellent shape, double digit, same store sales, five straight quarters, best part of the business is the White Hot Free People brand, which has been White Hot for a long time. It will soon supplant the Urban Outfitters brand, a second largest segment. And while it's still too small to move the needle, I'm telling you, you got to be optimistic about this newly subscription service. It's clearly getting traction and growing like crazy. It fits the taste of the new frugality that I talked about at the top of the show. By the way, when I was glad with my daughter, Montana last week, she dressed almost entirely with newly. It was so exciting because one of them had the price tag in it, that means she was early on in the rental of that outfit. Okay, maybe that's somewhat anecdotal, but I like to point it out anyway. Really, the only bad part of the Urban Outfitters story is Urban Outfitters. The brand might be time for the change of the name. What do you think? I've got some ideas, Ben Stoder and I fooling around a little bit. The softest of Urban in the store seems to carry outside his weight. Maybe they should call the company free people. They can't call it our age. That's taken. Call it free people. Maybe they should call it anthropology, or how about this? F, P, and A. Free people and anthropology. All right, maybe how about this? Philadelphia fashion cone, because they're based in Philadelphia. How about that? I like that. Either way, Management clearly isn't happy with the performance of Urban Outfitters, the brand. I'm betting that the new leadership and new strategy can better soon turn things around. But the bottom line right now, Urban Outfitters, but the bottom line right now, anthropology, the bottom line right now, free people, has quietly become one of the better stories in all retail. And at less than 12 times earnings, I think this talk deserves a lot more love than it's getting and makes sense to buy right now, right here, before they change the name, there's something smarter like the ones that we've suggested. Let's go to Tony in Florida. Tony. Hey, Jim, I just like to take my call and you have a great team and I'm looking forward to tomorrow's the conference school. Fantastic. And our team is amazing. The team actually helps me in the conference school, too. It's really a, it's a virtuous circle. How can I help? Yeah, I don't know if I should do this with the stock side of some ammunition, because I know you and Jeff always say, you know, fight it. And I'm fighting this one really bad. And it's down, but it gives me a 3.5 dividend. And I do still drink here. You might take the shot. It's tough. It's like I should hold onto or sell it. So I have ammunition for tomorrow. Okay, tap is a very complicated story. I have to tell you, I've done a lot of work behind the scenes with this one and I'm shocked at this decline. Hatter's Lee is doing a good job. The yield is great. You're right. I am shocked. Honestly, this is like, as people just say, listen, all their drinks are going to be hurt by the GOP dash ones, but not constellations, but you and I both never going to cover tomorrow in the conference court. I am not thinking, I don't think it's so moist. And if anything, I want to buy it, but it is so hard to buck the GOP dash one thesis that anything alcohol is no longer going to be drafted. They just think that people lose the taste for it. Beer is experiential. It is not just about alcohol consumption. Urban alforters has become one of the better stories in the retail store space. I think this doctor says a lot more love than it's been getting. Maybe it's the name. Much more may have money, including my Susan Wood Page has stopped following 6% of the earnings, our investors getting this great buying opportunity, like the usual average reporter, or is it a real warning this time? I'm hitting the latest for the CEO. Then after the report turned into my FedEx last night, investors are focused on buybacks. I'm sharing the copies that are being the most aggressive in what it means. They're of course order calls, rapid fire tonight's edition of the lightning round. So stay with Kramer. All right, what just happened with the stock of paychecks today? The payroll processing slash outsource, Yumi Capital Management Company. I love these guys because they can tell us a great deal about the state of small, medium-sized business in America. In fact, did you really like the company helps process the paychecks for one out of every 12 Americans in the private sector? So when the company reported a solid set of results this morning, an outlook that was a little less strong than I wanted, it knows the four-year forecast was fine. Well, you better believe I paid attention. Wall Street certainly didn't like it. The stock taking a beating down 6%. But look, anyone, anyone who follows paychecks knows that its stock tends to sell off after earnings no matter what. So could this be another buying opportunity to spend almost every single time, or do we need to be more concerned? And I'm being too quibber. I don't know. Let's check in with John Gibson. He's the president's CEO of paychecks. He had a better sense of the quarter and one comes next. Richard Gibson, welcome back to Bad Money. Hey, Jim, it's great to be back with you. Oh, thank you, John. You know, when we go over these quarters, there was a sense that maybe you were going to do. You gave us a preview, maybe do five. It comes in four to 5.5. I mean, to me, these are rounding errors. At the same time, some people feel that business has to some degree gotten tougher for you. So let's try to figure out whether that's the case. We didn't have a huge number of new client gains, but in the perspective of revenues and earnings, things were terrific. Yeah, Jim, I think you said it from the start. It seems like whenever we beat and reaffirm guidance for the next fiscal year, we seem to drift down. I'm not sure why that happens. What I'll tell you is we had very solid results. We exceeded consensus both on revenue and earnings per share in the fourth quarter. In fact, when you look at the fourth quarter, as you know, we've had this program, the ERTC program, where we've been helping clients. It's a one-time service charge. When you exclude that, our revenue grew 8% in the fourth quarter and adjusted earnings per share, 15%. And in fact, our growth actually accelerated in the second half of the year. You mentioned the client growth. Our client growth this past fiscal year was slightly better than the prior fiscal year, and we had a good year this year. So when you look at our business, I would tell you very solid results. When you look at our HR outsourcing business, particularly our PO business, growing at double digits, our retirement business, double digits, we're well positioned going into this next fiscal year. All right, good, because that was my thinking. I know that there are people who would say, "Well, wait a second." They said there's a tight labor market. They said it's because it's still hard to find people. But at the same time, you did say that small businesses continue to hire the small business employment watch that you shall tell us about. One month gain in job growth, best since January 2022. I mean, so there's a lot of good things happening in small business. And you're doing your usual to help the small business and then making some good business, good numbers from it. I don't know. It seems like business is usual to me. Yeah, look, Jim, we look at our index and what we continue to see is moderate growth for small businesses. But we're seeing growth. We're also seeing labor inflation continue to cool, which I hope the Fed sees as a good sign to take further action. But again, we saw all regions improving our May report. What I would say, Jim, it's stable. You pointed out the real issue. When we went out, because one of the things we didn't understand this past fiscal year was with an economy growing at the rate it was, our models would suggest that we were going to be seeing more hiring inside our client base. And we just simply weren't saying that. Now, I'll tell you, in the fourth quarter, we actually saw growth in both our payroll and our HR outsourcing businesses. So after a couple quarters of increase, so that's a good sign. When we went out and talked to clients, what we found was they were having problems finding qualified people. So we actually created product called the employer of choice playbook. We introduced it first in our PO. And we're actually going out and leveraging technology, data analytics, and our dedicated HR professionals to actually build customized plans for our clients to help them go into the market and attract using technology and AI more qualified employees for their business. Well, why don't we talk about a qualified employee? Because I think a person who is not qualified, I don't know when to get, I don't want to get Republican or Democrat here, but I've run a lot of businesses. But the minimum wage is high and versus where it's been. But people say, listen, the workers don't make nearly as much as the boss. So I get all those arguments. But I did feel this time when I read through your call that it's possible that the minimum wage is hurting. For the first time, I really feel like this hurting hiring. Because there's a lot of people who like the higher under the minimum wage, but they don't want to. They feel like they can't fire anybody. And they're not able to grow if it's going to be this continually higher rate versus what would have been now that we have a lot more people coming into the workforce. But do you feel like I do it after listening to your call that the minimum wage is hurting hiring in some places? Well, Jim, I think that employers learned a lot of lessons during the pandemic and the various employment shocks that we had during that time. And so I think when we had the situation where a lot of people were hiring anyone they could find, what they found was when they hired someone that wasn't as qualified or not as high a quality as they generally wanted, that person actually had a negative impact on the culture and the productivity of their current employees. And so one interesting things, Jim, is we really monitor, we have our HR professionals engaging, we actually have over 158 years of recorded calls just last year alone that we transcribed and done analytics on. And what you find is is when people were hiring a lot of people, we had a lot of employee relations related matters. Now, to your point, it may be that the price is a little bit higher. Now they're being a little more picky because they're paying a higher wage. What I will tell you is people want to have qualified workers and they're not going to settle for anything less because I think they learned a lot of lessons during the pandemic. That's a much more thoughtful response that I'm thinking. Sometimes you get the knee jerk way of like, wow, because it is. It's about how people do it to the workplace far more than a dollar or two for minimum wage. Let me ask you one thing that I am really concerned about, which is there is a retirement saving crisis in this country. People don't put money away. They don't know how. I've seen it so many times personally, and you guys are doing something about it. What can we all do about it? Yeah, Jim, you and I talked about it the last time we spoke. Very concerned about this. As you think about the aging population and the impact that this is going to have socially on us if we don't deal with it now, we know a lot about the 401k business. We're the largest record keeper. We have over 120,000 clients. We open a lot of the new plans that are out there. Jim, when you think about it, it's kind of concerning. In the 1980s, almost 50% of the working population was on a pension plan. There was a means for those people to retire. You look at it today. We believe there's upwards to 60 million people that have no retirement savings plan at all. So certainly, we've been supporting the secure act and the secure act too, which were passed. Those are great steps forward. We're also supporting the RISE Act. One of the things there was a loophole put in in secure act 2.0 that needs to get closed, and we've got bipartisan support, and it really hinders a small business. When I say micro business, under five employees, because they don't get the same level of tax credits as a larger firm. This RISE Act would actually feel that. Now, you want you to think about that. Of the six million small businesses, over half of those are less than five employees. That leaves a lot of workers on the sidelines. In the states, we've got about 20 states that have implemented a retirement plan. There's 12 others considering it. In those states that enacted that, we saw marketed improvements in the savings rates in those states. I really hope this is something that policymakers can get behind. I'm going to push for this too. It just makes no sense. I don't like it. I don't want people to feel like they have to work until they die, because they've saved no money. That's not the American way. Well, I want to thank you so much, John Gibson, President CEO of Paytex. PAYX was this is another regular, consistent, good quarter. Good to see you. Great seeing you, Jim. Thank you. May have money back in for the break. It is time. And then the lighting round is over. Are you ready, skiing, dance on the light round. What's up with Mary Claire and I? Oh, Mary, Mary Claire. Jim, how are you? What a great day. I'm in your master class for 10 years. Oh, thank you. Thank you. I love it. Here's my question, cassava sciences. It's an all-timer play. And the ticker is S-A-D. No, I know, Chris, I've neurodegenerative diseases, and I do a lot of work with the neuro case, and I will say this. If they can have something big, that's stock triples. If they don't, I think it drifts down. I like that risk of war, but I understand it's speculative. Let's go to Dave and Illinois, Dave. Dr. Kramer, my mad recent Montana and Wyoming national parks visitor. How are you? Indeed, I am doing well. Obviously, Gabe, as you know, I am doing unbelievable because of that trip. And how about you, my friend? Well, as well, Jim, this $6 billion company develops and manufactures diagnostic and therapeutic products for the treatment of heart, cancer, and other diseases. Lantheus Holdings has outperformed the S&P and has up over 25% on the year. Jim, your thoughts on L-N-T-A. I think it's great. Now, you know we own Dan and her, Dave, and we talk about that tomorrow at noon for the CNBC investing club conference, but Lantheus is terrific. I wish, honestly, that Dan and her would just buy them. I think that would be great news. And as always, I thank you for your call. And that, ladies and gentlemen, good, have a lightning round. The lightning round is sponsored by Charles Schwab. Coming up, one stock has recently delivered for shareholders. Is more joy on the way? Kramer checks out FedEx. Next. FedEx delivered a spectacular quarter list of dramatically reduced expenses, possible sale for its freight division, which would likely be worth more as a standalone entity, and some amazing earnings growth on a fairly small bump in revenues. And that's how a stock finishes up $40 in a session. But for many analysts, what really stuck out was the increase in the already humongous buyback. For the 2024 fiscal year, FedEx spent $2.5 billion on a shared purchase. They retired roughly 3.9% of the whole share count. Now, the company's announced it going back to the well. Expect to repurchase another $2.5 billion in the new fiscal year, including $1 billion in this first quarter alone. That's aggressive. It shows confidence. CBC.com ran this fantastic piece yesterday about buybacks, like, but just like this one. And it put things in perspective. The number one buyback in the last year was marathon petroleum shrunk its share count by 19%. And of course, the stock that went up 54% over the same period. General Motors is number two, where CEO Mary Barr has overseen a 17% decline in the share count. The stock's up almost 25%. Consider the performance of the analysts. You talked about Tesla, as a counterweight stock that's declined more than 80% forever. Competitor Ford down 14% Tesla doesn't have a buyback. I mean, they can't afford to do it. They're losing too much money. Ford, among the cheaper stocks, the SP needs to step up and do a buyback that 5% yield link doing nothing. Now, it's possible that no amount of stock buybacks can actually make a difference if you're in the wrong sector. State Street, the bank known for its custody work, has bought back 11% of the shares. But that stocks up less than 3% over the past year. Builders' first source has also retired 11% of the shares. Yet, it stocks up less than 7%. The supply, the home builders, the home builders, look, the home builders are holding up too well. They don't do a lot of building these days. If they don't do a lot of building, they don't need more building for stuff from first source. Of course, if you're in the right industry, you have these great. Valero and other fighters bought back 10% of the shares. The stock's up 36%. Randy, half the double digit repurchases is there's J-bill. Contract manufacturers also retired 10%, but its stock has only seen a gain of 10%. Obviously, buybacks aren't panacea's. Or else, all these stocks will be up phenomenally. But they can be springboards for outsized moves. If the underlying business is sound, their fighters knew they were in a golden age, so they stepped up in a big way. When people realized that they were having tremendous quarters, they simply weren't enough shares to go around. And that's why they're stocks sorted. There was enough supply. GM stock always seems to be devoid of sellers. Who wants to sell? GM might be the buyer. They're buying your stock head over fist, which brings me full circle to FedEx. When you see the stock up more than 15% in a day, you can bet there simply isn't enough stock for sale, not enough supply at these higher levels. Not only were there very few sellers, but the buyback increases the performance dramatically. As their earnings per share will grow nicely, if you've got far fewer shares as a divisor, that said, I'd like to chase stocks after such big moves. I can't count ones paying up for FedEx right here, but you need to keep this buyback in your mind for the end of a bull down day. Management is very bullish on its own stock, much more bullish, by the way, in the analysts, even if I read the morning notes. I think after this quarter FedEx has forever changed its stripes. Combination of FedEx's additional buyback, with even a fraction of a percent of the growth beyond what it already has, will lead to explosive earnings. After this quarter, it's become one of the best stocks to own in the entire market. I bet it becomes a quilt spring the next time it goes down. Congratulations or do to CEO Raj Subramanian. The transformation's working. The job's getting done. And the shareholders are the real winners, which is exactly as it should be. I like to say, there's always more more I guess I might promise I'd find just for you right here. I'm Jim Kramer. I'll see you tomorrow. Last call starts now. All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company, or affiliates, and may have been previously disseminated by Kramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Jim Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. 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