Men om du inte tycker att det är Nästa gång du behöver ladda bilen. Laddning! IKEA presenterar Ljud av förändring. Välkommen till IKEA! Hey, I'm Kramer. Welcome to Mab Money. Welcome to Kramer. I'll be with my friends. Hey, look, I'm just trying to make a little bit of money here. My job is to just entertain, but to put it in context, call me 1-800-743-CBC. Tweet me at Jim Kramer. The greatest story ever told, lower inflation, high growth, got thrown for a loop today.
And across the averages. Dow tumbling 785 points. SB plunging 0.56%. NASDAQ declining.2%.
It's easy to see how this happened though. Earlier this week Wall Street figured the war with Iram wouldn't do too much economic damage, but today the price of West Texas crude shot up above eighty dollars again, reaching the low eighties. Now it did settle back in the high seventies, but this kind of action has become a Starting to get it's just too hard for people and they're selling, even though I'm telling you you shouldn't stay in.
Making things worse, a key leadership group, the Semin doctors, got kneecapped today. See, with the exception of China, our government mostly has a no-borders policy for our That's shit. They can be sold anywhere. But today we heard rumors that the government wants to interject itself into the f all the foreign semiconductor sales. They want to gate us.
Before NVIDIA or AMD sell any AI accelerators overseas, they gotta get permission from the White House. Now, I have no idea if this is true or not. We know the Biden administration restricted sales like this of the best semis uh to barely more than a dozen friendly nations. I always thought it was stupid.
And it sure seemed like the Trump administration agreed with that position. They wanted American chips to dominate. But if the government starts blocking these companies from selling their best chips overseas, I think they're basically handing the whole market to China. That's why this is so out of character. The Trump White House typically doesn't like giving China a leg up, especially when it's something we're so good at, like Seming government.
Well I'd love it if NVIDIA could sell its chips everywhere. I understand that the case against letting them sell in China. I get that. I don't agree with it, but I get it. But blocking them from selling other countries? That'd be a travesty.
This rumors why the market lost a key leadership midday. Nobody wants to touch the semis if their total addressable market is about to get clubbed by the government. My hope is that this one spiked, especially because Marvell Technology reported an amazing quarter this very night.
Uh it along with Broadcom Nvidia and AMD would be ready to soar if the Trump administration says something like, oh no, we're not gonna do that. We're not gonna let our companies be held back and let the Chinese have jump on us. Now the good news is that the price of oil can come down. That the semiconductor start stock maybe it gets spiked. Oh that would be so good. Uh and maybe they don't go through with it.
The bad news is there is a war on, and it's not a stable setup for a rally as much as we'd like to think it is. I know they're no do-overs in this business, just narratives of what could have been. So let me tell you what could have happened if oil hadn't spiked and the administration hadn't been mulling new regulations of the semis, the best performing stocks of the year.
To tantalize, I'll tell you one thing. It would have been fabulous. This morning we had a monster reversal of something that's plagued this market for a while, the awkwardly named Halo Trade. Halo means heavy asset, low obsolescence company.
In the managed search for something, anything, that might be immune to AI, money managers seized on industrial companies that face no competition from AI if anything, this technology will only make them more efficient. So we gravitated to the Honeywells, the Nucours, RTXs. Any company that can help us build out data centers. The Halos, companies that make tangible things for a profit. It was working and it felt good. We had so many great industrials running.
But today, perhaps because of the stellar earnings from Broadcom, a gigantic semiconductor company with a software division, a stock that had been hammered until the until today. Maybe it's because of the bounce that we saw in ServiceNow, Workday, Adobe, Salesforce, and now Viva Systems. It looks like the Halo traders lost it.
Halo! The five stocks I just mentioned are all s enterprise software in place. There's been a widespread belief that anything enterprise software can and will be hobbled by anthropic or open AI, the two horsemen of the software apocalypse.
I think the rebound in this group is long overdue. Sure, it's absolutely possible that these software companies will lose some business to the AI Reapers. But coming into today, the enterprise software stocks have been trading like they were in danger of going out of business. That's absurd. These companies aren't run by a bunch of bozos. Their CEOs see what's happening. They're furiously pivoting to combat any newfound competition from code written by artificial intelligence.
It might just be a temporary reprieve, but before the oil rally crushes, these stocks seem like they're headed for a major retracement, and that could help everything from private equity to anybody who actually believes that AI is not going to destroy everything. In this scenario, you're supposed to sell the Halo names, dump the techs, buy the recession proof healthcare stocks uh if things are d if oil keeps going up.
But you know the the healthcare stocks were slaughtered too. So it's very difficult to see without oil going down how we can really make a big Look, I think the President's gonna have to open the strategic petroleum reserve. to push down the price of gasoline, perhaps until the war is over. Those worried about inflation need to hope that the spike is temporary. And the new Fed chief needs to come to grips with the fact that some inflationary input simply can't be ignored.
Most of all, we need clarity on what the President really wants, both the semiconductor exports and with the war in Iran. Until then the bottom line is we have to face the fact that the market's in limbo. I hate limbo, but I accept that there's always a lot of limbo in 2026 so far, and we need to learn to live with it if we're ever going to get to the promised land of higher priced. And you've got to stay in if you're gonna get there too. Let's go to John in New York. John.
Hey Jim, thanks for taking the call. A longtime listener, first time caller. Excited to talk to you. One and two, I just found out I'm having a big Super exciting day. But my Yeah. Thank you. My question, um, I have a big position I bought into Uber. Um And I bought in at the high eighties and I it keeps di dropping it seems to be day by day and so I'm just curious, you know, my soon to be baby boy should I look first of all congratulations.
I want you to stay in Uber. You gotta think really long term about this because I think this is a company that's taking over the world and we're having some short term uh volatility in it that I think is gonna end the stock is way too cheap. I want you to stay in the stock. Let's go to Sheryl in Iowa. Sheryl. Hey Jim, this is Cheryl from Indianola, Iowa. I just wanted to get your
information from you. So last November I bought Robin Hood stock for about one hundred and forty five dollars a share and then it went down to one hundred and twenty dollars and I thought, wow, that's a good deal. So I bought more and added my position and now it's down to seventy nine, eighty dollars.
So, um, but at that time back then the price target was like a hundred and eighty dollars. So my question to you is do you feel Robin Hood's gonna go back to one hundred forty five or higher anytime soon? Okay, let's let's let's let's upend this one, Cheryl.
Let's forget where we bought it and think where we think it could go to. If I could buy Robin Hood at eighty dollars I'd probably buy some here and if went to seventy, I'd buy it very big. So the question isn't whether it'll get back to where it was. The question is would you buy it now? And the answer is a resounding Yes. Ralph in Pennsylvania, Ralph.
Uh Jim, uh question is about land research, which I heard uh of from your show at the end of month of January. Uh so I did some homework and uh found out that Uh they sell uh their equipment to the likes of T Taiwan semi, Samsung and Intel and their technology stacks up pretty well against their uh uh b uh against their uh competitors. Anyhow their P their P is kinda high at like thirty four. Uh but I pulled the trigger anyway and got in at like two forty six.
The price targeted to take a look at the biggest. I want you to buy more. I want you to buy more. Lamb has got the best intellectual property of any technology company, I'm not kidding, that is in that industry, and I think that you should average down. I don't care where you pay it, I think it's going higher. Let's go to Ray in California. Ray.
Booyah Jim, thanks for taking my call. Of course, what's going on? M well, my question is about Service Titan. I purchased it in January. All the animals can you believe all that stocks going down? I am surprised. I looked at that today. I think It's ridiculous. This is a very good company. You're getting this good like many companies that's been brought down by oil.
That is a good company, and I think that you should hold on to it. And if you have it any more extra capital, I would put some more money to work in it. They are giving some stocks away right now, and we want to take advantage of the sale. Alright, we have to face the fact that the market's in Some day it it's gonna go higher again, but you know you need to have oil stabilized and we gotta figure out what the heck is really going on with technology. Um
A comeback in the parent company of Coach and Kate Spade? I've got the CEO to find out. Then Lloyd Glyphite. Streetwise it shells this week. and get his take on the current state of this turbulent market. Gap down, shares with gap or sliding after earnings. I got the CEO of Fresh off the earnings board. So stay with Craig. Don't miss a second Have a question? Tweet Kramer. Mad mention. Send Jim an email to Mad. com or At 1-800-743-CNBC. Love double circle. Eller.
Men om du inte tycker att det är så enkelt, är då Kia presenterar Gjud av förändring. Du. måste flytta och inreda. Welkom anti l'EKI. What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trail Blazing Women the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
is short and you just gotta think big to accomplish big things. Power players. Every Tuesday wherever you get your podcast. Even after this beatdown, there are some terrific winners in this market. Take Tapestry, the parent of Coach and Kate Spade, with the stock that's up more than 84% over the past 12 months, putting some big gains after the company reported a blowout quarter about a month ago.
Earlier today, we got a chance to check in with Joanne Kuvoisarai. She is the CEO of Tapestry at the coach's flagship location on Fifth Avenue. Take a look. I'm so excited to be this in in this incredible story. Incredible, and what I see are two things. I see magic, but I also see logic.
I am so glad you brought both of those words up right at the beginning, Jim, because that has been part you knew Lou, uh Frankfurt, who was a former CEO of Coach. It has been part of our DNA since the inception. Coach has always been a brand that has balanced magic and logic. It takes both to really bring a great b business to life. And tapestry has embodied those concepts, and you're gonna hear that a lot today. Well, this is not a new brand.
But it feels new. I don't know whether it feels new because of the charms. A book charms, so brilliant. Feels new because of the colors. Feels new because I don't know the people who work here make it feel new. Well it feels new because we have sharpened our focus and our execution over the last six years. And as we've done that, we've focused on becoming relevant to a younger consumer. And with that specific focus in mind, our whole organization.
Is is um leveraging brand building capabilities that we've strategically invested in those capabilities that help us. be more relevant to a young consumer today and and the expression of the brand has never been more vibrant. Well you've got a finance background but you also know a look. And to me I see here th what we would call if we were doing a tech story, the TAM is big, the total addressable market and where it starts for you and where you hook them and where they stay.
We've done a lot of disciplined work that has led to where we are today. And and I do want to share that because this doesn't happen overnight, right? The disciplines to really understand where's our authentic place in the world. Our authentic place with Coach, it's such a great brand with so much history, 85 years of history with this brand, right? And and that authenticity comes through as a timeless classic, genuine, well crafted product. It starts there
But we were asking ourselves, how do we become more relevant to a modern young consumer today, right? What makes the brand relevant? And the only way to do that is to really understand your target customer. So we have spent hours. hours and hours talking to young consumers and understanding what's going on in their life, what what are the tensions they're feeling.
How are they thinking about brands? How are they thinking about just their lives and and how they spend their time? And then connecting that with where we authentically live as a timeless brand. And so our target customer, the timeless Gen Z customer, tells us that they value self-expression. And they're trying to gain confidence as they grow in the world. And so we've honed in on expressive luxury as a way to help our young consumer.
leverage their own self-expression as they build confidence with our brand. Okay, so the numbers for here are just nothing short of spectacular. How about Kate Spay? Can you do the same thing? I see when I go and look at TikTok and look at Insta. It's a little bit younger. Uh maybe that i is the right way to go. What what is your thinking? Well Kate Spade is a is a an iconic brand and it has cultural relevance. If you go back
To 1993, when Kate Spades started the brand. She started the brand because she didn't see anything in the market that appealed to her. Right? It was differentiated from the very beginning. So how is Kate Spade differentiated? Well, Kate Spade has always been feminine. and had color and joy and optimism. And in the in the day when the brand was created, Kate said, I, you know, and and women were in the workforce in the in the nineties, right, wearing shoulder pads and suits.
And what she was looking for was a brand that spoke to her and her personality. She wanted something with a little more femininity to show her own personality and with a touch of cleverness and wit. And so from its very beginning, Kate has had that differentiated position. It has that differentiated position in the market today. And the work we're doing is building off the learnings and the brand building capabilities that we've built and then are it evidence at code.
And applying those, yes, to Kate Spade to be relevant to a young consumer today. All right, that'd be great. Now accessible luxury, deemed a category by the federal government, of which if you had had merged with uh Capri, you would have dominated a monopolist. What was that about? Well the truth is, and as you and I know, Jim, consumers have lots of choice. And in fact, today they have more choice than ever. And we're building the capabilities
to make sure that we cut through with consumers and build brands in a relevant way. Um, you know, we have incredible momentum at coach. And we're just getting started. You mentioned the TAM opportunity. We see tremendous opportunity to grow. with our coach brand, you know, the way we look at the market, we have one percent, less than one percent share globally. So we have an opportunity to continue to drive growth at coach.
and reignite growth at Kate Spade with these capabilities that we've built. And and as I said, the reality is the consumer has a lot of choice, so our job is to make sure we can cut through. and and build our brands and be relevant to that consumer.
In a in a sea of of many choices. No, I I this is a stock show and you made it accessible. You made it a accessible luxury. And at the same time, you did it an accelerated share repurchase that may have been one of the most timely things I've ever seen. How did you know? Um how did we know? We knew um that we had there were many outcomes of that uh
potential transaction. And like any business, we're disciplined and looking at all of the possible and potential outcomes and making sure we're prepared to compete whatever whatever those outcomes or whatever the macro environment uh presents. And at that moment we had an opportunity to make a strategic pivot. Um I would say first we never lost focus on our organic business. And so we continued to build that business and at the moment that we were presented with a change in circumstances
Um we made a big bet on tapestry because we see the opportunity to grow durable long term growth and value creation even today into the future. So we just had a uh an investor day in September. Our um our model is tremendously efficient. We throw off a lot of cash and we're returning
A lot of that cash to our investors. We have a very compelling value creation story, including our capital allocation story of four billion of of cash returned to investors over the next three years. Now uh talk to me about iconic. I mentioned Tabby. What is it? Tabby is a great story and a tremendous icon that is a Gen Z recruiter.
Gen Z loves this bag. It is. And and you know, our business and our growth engine is is driven by new customer acquisitions. So our focus is on, as it always has been, bringing more people into the market. Right. Young consumers today think differently about luxury, and we're making sure that we meet them where they are with great product and great innovation. And TABI represents that great innovation. In fact, at one time, TABI almost went away.
Tavi was, you know, we introduced the bag, it had great reception, but after a while it started to fade. And this is a perfect example of bringing magic and logic together in our business. It was right at the beginning of our transformation when we were talking about the need to attract young consumers to our brands. And it's it's really making sure that all of our people throughout our organization have the tools and the data to make different decisions.
So when you bring magic and logic together, a merchant or a designer in our business had the data that said, you know what? Tabby is resonating with a Gen Z consumer. Why not, rather than mark it down, why don't we amplify it? Why don't we animate it? And and from there an icon was born with tremendous innovation, animation, and this is what our consumers responding to. All right, now I'm gonna tell you that everything resonates when you go to your wife.
And she says, Oh my God, okay, my first bag. When she gets out of college? And then my bag, which of course she has in this, because it's never changed, that was her first evening wear, cause she could afford'em as a salesperson, okay? Uh putting uh raising money for college and then selling uh pharmaceuticals.
And this is it. And she says, I still wear them. That's you. That's exactly who we are. And that is what drives the passion behind our business from all of our associates, our team members, and our customers. One of our our team members, we were talking to Christiana, said one of the things that reasons that she stays with this brand for twenty years is that she knows
that we're selling a customer a product they're gonna treasure for a lifetime. And in fact, many lifetimes. We have products in our in our assortment that um that we give second lives to, that we remake and refurbish
We've kept over fourteen uh almost fourteen thousand handbags out of landfills because we keep them in circulation. Well there's a hundred thousand on ebay right now. Uh and they're and I urge her never to do that. She said don't worry, these are going to be my child uh Her daughter, every year this Joanne Kriposser. Thank you so much.You're welcome.See you. Coming up, when the market is as turbulent as it is now, few guides are better than the experience of before. Sit down with Lloyd Blair.
At love double circuit. Men om du inte tycker att Sväng in till oss nästa gång du behöver läsa. Laddning. KEA presenterar Gjud av förändring. Du måste prata. flytta och inreda ett... What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trail Blazing Women. One of my favorite pieces of advice, think about what your boss's boss is.
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. C and B C changes. New episodes every Tuesday wherever you get your podcasts. During this crazy, sometimes terrifying moment for the market, I want to check in with someone who has a lot of experience handling market meltdowns, Lloyd Blankfein, who served as chairman and CEO of Goldman Sachs from 2006 through 2018.
Basically, he took over right before the financial crisis, handled it better than any other financial institution. This week, he's published a new book, which I love. It's called Streetwise Getting to and Through Goldman Sachs. This is a fantastic read. The parts of the financial crisis are really priceless. Don't take it from me.
Mr. Blankfun, welcome back to Viv Button. Mr. Blankfun, Mr. Kramer, thank you for having me. Thank you, Lloyd. Lloyd, it's a fabulous read. And one of the reasons is a it's a fabulous read is I feel I'm in the room. I feel I'm in the room when you when you get part, I feel you're in the room with Jay Aaron, and I feel like I'm in the room.
When the country's melting down, what did it feel like? For about half the book, you were in the room for the year because we overlapped. Yes, we did. You were my rap. I was two years behind you everywhere. But you were incredibly helpful to me, because that's just the way you are. Well, you're easy to be helpful to Well okay, so tell me. It looked like that when everybody was calling at the Federal Reserve.
That you weren't in charge at that moment. It looks like Tim Geitner was bossing you around. And at one point he told you, listen, I think maybe Walkovia you said Walkovia go. Oh no. And how about City? No, the after Lehman went, they had us um on Friday That next Friday and all day Saturday we were merging with Citigroup. Right. Told us to merge with Citigroup. That got canceled. Funny stories. It turns out that he was Vic Rompander was very flattered by your call. By the way
the regulators. You know those Star Trek episodes when uh Kirk is on the bridge and somebody else is threatening to turn off all the life support systems so they have to do whatever they want. Well, the regulators controlled all the oxygen. We had to do whatever and by the way
they did a pretty good job under difficult circumstances. So I'm not taking shots at them. It was a very tense time and nobody knew. But I would say if if Friday and Saturday were merging with Citigroup and that and that didn't work out by Saturday night and Sunday they had us merging with Wachovia. And so this kept our friend Bob Steele. It was uh it was Crazyville, right. But
People under very difficult circumstances made quick decisions. Normally they would have spent a year analyzing something. They had no a chance to do it. I think people perform very well. They'll never get credit for it because it's like in a James Bond movie. When the bomb is ticking down and goes down oh oh nine, oh oh eight oh oh seven when it finally gets there and he diffuses the bomb, nobody ever appreciates that he saved the world because it never blew up.
And it never blew up. Well the reason I bring it up is because every time we have market turmoil, people say it it could be worse in two thousand eight. As if because oil's going up and there's a a war in Iran and we have some problems with some private credit. Are these things even remotely like that moment? No, but everybody always thinks whatever you're living through is worse. And there's good there's good reason for it. Anything that's already happened
Is resolved, on the shelf, can't hurt you anymore. Anything that's still pending could get worse. And so everybody's kind of extrapolating. So it's just human nature to think Well we we got through that. How bad could it have been in hindsight? Well human nature you talk about something that I think is really missing in this market, particularly in the private equity. You say so much of resilience comes from having a better understanding of risk.
when I look at some of the portfolios of the companies that we're worried about, they don't seem like they were built for a risky moment. Well, I think I think everybody who's running a big organization or an institution has to live spend ninety five percent of the time in the five percent worse possibilities because guess what? The good times take care of themselves. what you have to do. If you're in my old job in the best of times.
I'd have a line outside my door, everyone had a number to tell me what their biggest problem was,'cause otherwise why would they be coming to see me? And so I always lived in a problem world, even when things were otherwise going well. But you always kept perspective. What did you say when everyone was so scared when you're about to go to the Federal Reserve? I said
Guys, you're getting out of a ba you're getting out of Mercedes in the basement of the New York Fed. You're not getting out of a Higgins boat on Omaha Beach. Get a grip. Absolute favorite line. Okay. Get a grip. Okay, so you and I have kind of similar backgrounds and I'm trying to figure out why on the fact that, you know, short ball, you always made that joke with me. Well, I I know I felt very kindred, but one of the reasons I felt kindred was I always felt people were looking down on me.
And I thought people were looking down on you even though you were the best at the damn company. Jim. The best thing in the world is to be a confident person to whom other people like underestimate and might look the the fact of the matter, I was telling you I was in a I was in a b a big crowd yesterday, was at a party I did a book event and it w very high and mighty people.
And your name came up, I brought it up because people were somebody w a couple of those guys had gone to Har Harvard Law School and blah blah blah. And I s and and oh I mentioned, oh, I'm gonna see Kramer tomorrow and and it's and why did I bring it up?'Cause I would tell you, that elite crowd, your resume. Your elite resume is better, but hey, your Jim Everyman Kramer, yeah, not what you lead with. I know, but that's not what you lead with. But that's you know, you could
You you live on both sides of the line. Yes I do. And you always do. Thank you. But which you think but but really it's brain and heart. You have a big brain, but you have a big heart. Not everybody has both. Now I do need that's very kind of you. I need to get a sense on a day like today where you have oil up, you got private equity worries, whatever.
What you would be doing on your desk? What what kind of what'd you be saying? Would you be saying listen I want r I I want l risk removed, uh I want but you sure all the marks are right? By the way, I would say It's mostly tailwind. I mean almost everything in the macro market that we're looking at is Is is kinda positive. You know, inflation is not where we want it to be, but it's tamed, kind of.
and it's growthy out there. Unemployment is pretty good. In any other moment it would be terrific except we wanted to be a little bit more Well then why can't the private equity firms come public all their stuff. They have all these different portfolio companies. It should be a mo house among the things.
because not just because of the accuracy of reflecting your P and L, it's a very, very good risk management tool. Because think of the financial crisis. People were marking they didn't know that their assets were weak. Right. We Mark to market and in order to really ascertain we made people sell stuff or try to sell stuff. That was the early warning system that they were troubled in the asset.
I would say that there's a lot of inventory building up in and you know, there's a lot of commentary on illiquid a and by the way. Illiqu I don't understand the concept of semi liquid. Semi liquid means it's li it's liquid when you don't need to sell it and it's totally illiquid when you do need to sell. That's what semi liquid means, I think.
But I you know, we've just gone through a period, I'm kind of in a period, where the equity market is near the highs. I know we had a couple of bad days, but we've lived near the highs of the equity market. and in a terrific financing market. Right. That is a good combination for being able to sell
inventory of you know companies and divisions that you'd want to sell. It should be a good market to sell into. Um it's not going to be better if the equity markets fail and financing gets more difficult. So That's something that I would be what would I be doing now? I'd be going around and Pushing people harder to sell even if I didn't like the price. Pushing it to keep it. You know, what difference does it make whether I like the price or not? The price is the price.
Well, I'm gonna leave it there. Next time you come back we gotta talk about your call to Laura when you were sick, which was like you put her on hold. And you know, call you called her back. And we gotta talk about the guys who had red suspenders, but the investment bankers that I looked they looked down on me, they didn't even notice us. All truth, where are they now? Great question. That's Lloyd Blankfine, former chairman in Goldman Sachs, guys.
It's by the way, Lloyd is hilarious and he remembers that the punchline's at the end of the joke. Yeah, Mike's back after the break. Coming up, you've got questions, claimers, fire lightning round It is time it's on the light round Chris my brand calls the insta bye bye bye so just wearing sweat on my step for swear to play this up and then the lightning round is over. Are you ready, skate? round critics let's go to Sam in Pennsylvania Sam
Jim, how are ya? I am doing well, Sam. How about you? I'm good. You know, Jim, I've had my eye on AEIS for a while now. The stock seems to be trading at a premium. I'm wondering if you think the good news is
You know, that's really is the question because it's another one like the other like we did forgett the other night, it's a bird. These are really unbelievable stocks, but they can come in and when you buy'em the first price, you tend to be saying, oh my god, did I catch the top? Let's do this. I want you to wait till we're going to be able to do 280s, 290s, and then pull the trigger. And if you miss it, you miss it. To Jason in New York, Jason.
Hey Booyad Jim, long time. Appreciate the show. Fantastic. What's going on? Thank you. Interested in GPC? That pi that last quarter was awful. I mean I was actually surprised how bad it was. I I don't want to I mean it's still not protected by the yield at 3.6. I I think you have to wait on that one. Let's go to Gerson in New Jersey. Gerson!
Hey, this is uh person from New Jersey. And I'm calling about um Turking these capitals. No, this is a business development company. We've it we've disliked these for twenty-one years now. A lot of people have been but a lot of private equity companies got in, but there was one today that we talked about with uh that that BlackRock did. I want you to stay away from these. You don't know what's in them and it tends to be stuff that you would never buy. Let's go to Bob and Nevada, Bob.
Hi Jim. I'm a first time caller and longtime follower. Thanks for all fantastic. Oh great that you called. How can I help you? I appreciate your taking my call, sir. Your question is in light of the pending merger between Paramount and Warner Brothers, what are your thoughts on IMAX corporation stuff? You know, IMAX I've got to tell you I have news I go to IMAX's now in the packed and one of the reasons we do is because otherwise we'd stay home.
The only reason you go to the movies is because there is an IMAX. And I think it's a terrific situation. I gotta hand it to Gelfon. We used to make fight comes on TV a lot, but boy he did he stuck with it and he did a good job. IMAX is real. Let's go to New uh Ed New York. Ed Jim Kramer, my man. Yo, shoot oil covered booyah to you, Jimbo. Done your way. How can I help? My question is this for you, what do you think of a quick in and out on ENVS?
Oh, lithium battery, no, I can see you in, but you never get out. I don't you I don't want you near that one. Please stay away from it. And that, ladies and gentlemen, conclusion of up. Gap shares are on the move. The company reported earnings today. Kramer's getting a read on where things are headed with the CEO.
All right, what the heck's happened to the stock gap after hours? It looks like a real turnaround story, and then reported somewhat of an imperfect quarter after the close. In line, revenue, softer than expected, same-store sales at one of the divisions, small earnings biz, and yet the stock gets crushed after hours. I don't get this.
It didn't help though that the four year and first quarter forecast came in a little light, but maybe they're just being conservative. So is this just temporary turbulence that we really need to worry now that the stock's starting to run? Let's take a closer look at Richard Dixon, the presence here of Gap. Find out what's going on. Mr. Dixon, welcome back to Bad Money.
Thank you, Jim. Always good to be here. Okay, so Richard, I gotta tell you if someone told me that that Gap, the regular Gap, could do seven percent cop, I would say that's impossible. I'll pay fifty for the stock. So we are in some weird mode where because you were a little bit light on old navy, people are not even paying attention to how good Gap is or Banana Republic for that matter. Could you please help me understand what's going on?
Yeah. Well, Jim, first thank you. You know, we delivered another successful fourth quarter and it's also marking another year of real meaningful progress for the company. Uh we achieved our second consecutive year of top-line growth. That's eight consecutive quarters of positive comparable sales, and that's real consistency.
Comps were up three percent in the fourth quarter. It was driven by old Navy up three percent. Gap, as you mentioned, plus seven percent. By the way, that's on top of last year's seven percent. And banana republic four percent comp, that's uh three consistent quarters in a row. And of course we know we're rebuilding Athleta. It's also, I think, important to note, you know, we're winning across all income cohorts. And we grew share in the quarter.
Uh lastly, I'd say a big important highlight, 2025, we drove our highest gross margin in the last 25 years. Wow. And we further improved our balance sheet. We're ending the year with$3 billion in cash. consistency in our top line, controlling the middle of the PL, and great bottom line progress. So the progress that we're making and have made over the past two years.
It's reinforcing our confidence in our twenty six outlook, which reflects another year of top line growth in addition to operating margin expansion. So We are very excited about where we are and more importantly, moving into the next phase of our transformation, which we couldn't be more excited about. Right now I want to know about health and beauty. I love I love that part of every store. It moves. The stuff moves. You're going with it.
Absolutely. Look, beauty, as you know, it's one of the fastest growing, most resilient retail categories in the U.S. And when we study our consumers, our consumer insights reinforce that there's strong demand for the category and specifically with our brands. So when you look at other fashion and apparel retailers with a beauty offering, the category represents anywhere between 5% at a low to 20% of their sale.
highlighting the meaningful potential that this category can represent within our business over time. Uh you know we we're not you know foreigners to the beauty business. We have had an underdeveloped beauty business. And based on our consumer feedback and insights, the potential of this category is fantastic. In twenty twenty five you recall We announced plans. Uh for our strategic expansion into the category with a phased approach, introducing it with Old Navy in the fourth quarter.
Ngap is gonna be relaunching its fragrance later this year. Watch the space over the long term. We believe this is gonna be an important category of growth for the brands. Alright, so let's go over what we ha we that had but got us last time to uh just a I don't know, a horn is just a confusion. Tariffs. Uh it was very difficult to try to figure out what they really were. It was so on the fly. Put give us the state of play right now on tariffs in your company.
Look, fur first I I really want to say I'm I'm really proud of how our team has navigated tariffs over the past year, uh leveraging a broad slate of mitigation strategies to manage the impact to our PO. Um look, we we view this latest uh news as an evolving situation. Uh we've not included any of the benefit from the Supreme Court ruling uh and section one twenty two announcement in our current outlook at this time.
You know, as our mitigation strategies build through the year, the annualization of these tariffs is expected to be net neutral to go our gross margin and our gross operating margin for the full year. It's a fluid situation. Um and we'll see. We'll see how things roll, but we're not getting distracted. We need to concentrate on building great product, great storytelling, great execution, and consumers will find us as they have been.
Breaking through the clutter and gaining market share. So tariffs are a daily discussion, but ultimately not letting us get distracted from exactly what we're trying to do every day and that's excite and delight our customers. What people are going to say, well listen, uh the inconsistency here is madness.
Uh and I would come back and say, You miss a percent. That's not manding. I mean th everything's going in the right direction. What do you say to someone who says, No, they're too episodic? I I I gotta go with someone who's just straight up. Well first of all, look, I'd remind them this is our fifth consecutive quarter of positive comps. We just delivered another strong quarter posting a three percent comp. We made our expectations.
You know, this is a large base business delivering quarter after quarter. Uh and the quarterly comp was trending higher in fact prior to the winter storms, if you recall, at the end of the quarter. So importantly and importantly, we saw sales pick up again right after the storms passed. Now those last few days of the quarter, they were painful to watch and obviously we sort of got through it and then business picked up right after the quarter uh the quarter ended.
This this performance in in addition to the brand's consistent share gain. over the last two years. Reflects the brand's strength, consistency, and reliability. It's a brand that wins around great product, great quality, great price. Again, all income cohorts responding to our offerings. We're leading in denim, active, kids and baby.
Uh all those categories have grown, particularly denim and active. You're gonna see a lot more innovation and price value in the active space. I promise you it's gonna be an exciting year ahead for that category. And also in Kids and Baby, you know, one of the stats that we like to share, we're the number two brand in the country for Kids and Baby. And we've become Disney's number one apparel direct to consumer partner in the U.S. So it just goes to show you through partnerships.
leveraging entertainment licenses. We've got a lot of opportunity to grow. We're well positioned, we're delivering consistently. Are we gonna build upon that strength? Look, I'm with you. I've been with you the whole way. You know that. I'm with you. I think you gotta buy the stock gets down like this, a 10% decline. That seems wrong to me. That's Richard Dixon, presidential of Gap Inc. Read the conference call before you make Could retail be the sector to get in?
Kramer's returning to his old friend. You know I cover a multitude of industries, but my first love is retail. I love today walking through coach and Kate Spain, noticing what can grab you, what can entice you, maybe spend a little more money, maybe you see something to wear that makes you feel more confident, brighten your day.
After the war my dad sold trousers at gimbals. One of the biggest stores was in Philly, rivaled by Litz where my mom sold lingerie. Now, unlike Coach and Case Bay, These places were awful and my folks hated their jobs as all the bosses treated them terribly and only my dad was fired for something he probably should have gotten promoted for.
After that, my dad sold carpet. Then he sold toys out of his station wagon, including board games to help make. It was a disaster. Ultimately ended up selling gift wraps, scotch tape, plane boxes, printed bags. As of right now how to make money in any market, it was an awful business.
On Saturdays I'd go with pop to see customers, he was always treated terribly, until one day he saw his callie, selling doggy bags to restaurant owners so penny pitching Philadelphians could take their leftovers home in bags with the restaurant's name on them. When he found that business he no longer had to beg and it was delightful. So on Saturdays we did something different.
We'd go to indoor malls and we'd watch stores. We'd watch what customers picked up. We'd measure how many came out empty-handed, how many were burdened with many packages. He told me how to watch the faces of salespeople, watch the managers, watch the registers. Maybe working there would be t you'd see people treated like he was at Gimbal's. Get a sense before you sit down of what's high priced, what's on sale, what wasn't moved, what was.
Today, Coach Kate Spade, the subsidiar of Tapestry, I know Pop would have been smiling. Every box was checked. The register have been humming before we came in. Uh smiles galore, well presented, nothing promotional at all. Now I know it sounds strange, but after years of watching with pop, I can tell a winner in retail just by witnessing the stores. Capesty's a winner. Well organized, great price points, beaming salespeople, a true sense of wonderment.
Would I buy the stock? Well, that's not enough. You know, you gotta do a little homework. However, it is a good place to start. What I heard from CEO Joanne Cruvasero today makes me feel very confident about this stock.
You know there are a million reasons why I wish my dad were still with me, but sitting down and watching a store was our favorite thing to do after watching the Eagles getting together. Case in point, one of my greatest hits ever when I was a hedge fund manager was shorting the stock of a retailer named Gantos from the thirties all the way down to zero.
Goldman Sachs loved it the whole way. How did I know it was going to go down? Because Pop, he went to watch a series of Gantos locations during the week, and then he took me to C1 at Franklin Mills outside Philly. It was a busy Saturday, the mall was packed. We watched Dantos for four hours. We watched miserable salespeople ignore customers. Prices were outrageously high. The merchandise, mostly women's clothes, was painful to look at. Most important, we only saw two people walk out with bags.
Four Saturday hours, two satisfied customers. Ouch! Goldman Sachs thought Gantos could be the next big thing. Pop said it would be bankrupt within a year. He was off by about six months. One of my greatest trades ever. I got the opposite vibe today from coaching Kate Spade. I say giddy up. This one is lucky. I like to say there's always Boom Market Summer.
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