Mad Money w/ Jim Cramer 3/5/26

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1:21Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer. I got a few of my friends. Hey, look, I'm just trying to make a little bit of money here. My job is to entertain the putting context, call me 1-800-743-CVC, tweet me at Jim Kramer. The greatest story ever told lower inflation, high growth, got thrown for a loop today. And across the average, the outtumbling 785 points, S&P plunging 0.56% and that's like the client 0.26. It's easy to see how this happened though. Over this week, Wall Street figured the world with Iran wouldn't do too much economic damage. But today, the price of West Texas crews shot up above $80 again, reaching the low 80s. They all did settle back in the high 70s. But this kind of action has been starting to get, it's just too hard for people. And the selling, even though I'm telling you, you should stay in. Making things worse, the key leadership group, the semi-ductors, got kneecap today. See with the exception of China, our government mostly has a no borders policy for our best chips. They can be sold anywhere. But today, we heard rumors that the government wants to interject

2:23itself into all the foreign semi-ductors sales. They want to gain us. Before in video, AMD sell any AI accelerators overseas, they got to 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 to the best semis, to barely more than a dozen friendly nations. I always thought it was stupid. And it's sure seen like the Trump administration agreed with that position. They want an American chips to dominate. But if the government starts blocking these covers 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 you're so good at, like semi-ductors. Well, I love it if Nvidia can sell those 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 Marvel technology put an amazing quarter

3:26this very night. It, along with Broadcom and Nvidia and AMD, would be ready to soar if the Trump administration is something like, no, we're not going to do that. We're not going to let our companies be held back unless the Chinese have jumped on us. Now, the good news is that the price of oil can come down. That the semi-ductors thought, maybe it gets spiked. Oh, that would be so good. And maybe they don't go through with it. The bad news is there is war on and it's not a stable setup for Rally as much as we'd like to think it is. I know the 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 the administrative hand of the more new regulations of the semis, the best reforming stocks of the year. To tantalize, I'll tell you one thing, it would have been fabulous. This morning we had a monster reversal something that's plagued this market for a while. The awkwardly named Halo trade. Halo means heavy asset, low obsolescence companies. In the man's 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

4:29to the honey wells, the new cores, RTX's, any company that helped us build our data centers. The halos, companies that make tangible things for profit. It was working and it felt good. We had so many great industrials running. But today, perhaps because of the stellar earnings from Broard College, like any semiconductor company, with a software division, a stock that had been hammered until today, maybe it's because of the bounce that we saw in service now, workday, Adobe Salesforce, and now Viva Systems. It looks like the halo traders lost its halo. The five stocks I just mentioned are also 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 pozos or CEO, see what's happening. They're fiercely pivoting to combat any newfound competition

5:33code written by artificial intelligence. It might just be a temporary reprieve. But before the oil rally crushes, these stocks seem like they're ahead of for a major retracement. And that can help everything from private equity to anybody who actually believes that AI is not the destroyer of them. In this scenario, you're supposed to sell a halo names, dump the techs, buy the recession, prove healthcare stocks, if things are, if oil keeps going up. But the healthcare stocks were slaughtered too. So it's very difficult to see without oil going down how we can really make a big move. Look, I think the president is going to 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 inputs 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 markets in limbo. I hate limbo, but I accept this is always a lot of limbo in 2026 so far. And we need to learn to live it

6:37for ever going to get to the promised land of higher prices. And you've got to stay in if you're going to get there too. Let's go to John in New York, John. Hey, Jim. Thanks for taking the call. A long time. Listen to our first time caller. We're excited to talk to you one and two. I just found out I'm having a big so super exciting day. But my yeah. Thank you. My question. I have a big position. I bought into Uber and I bought in at the high 80s and it keeps it dropping. It seems to be day by day. And so I'm just curious, you know, my suit. Look, first of all, congratulations. I want you to stay in Uber. You got to 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 volatility in it. And I think it's going to end. Stock is way too cheap. I want you to stay in the stock. Let's go to Cheryl and Iowa. Cheryl. Hey, Jim. This is Cheryl from Indianola, Iowa. I just got to get your

7:41information from you. So last November, I bought Robin Hood stock for about $145 a share and then it went down to $120 and I thought, wow, that's a good deal. So I bought more and added in my position. And now it's down to $79.80. So but at that time back then, the price tariff was like $180. So my question to you is, do you feel Robin Hood's going to go back to $145 or higher anytime soon? Okay. Let's let's let's let's up in this one, Cheryl. Let's forget where we bought it and think where we think you could go to. If I could buy Robin Hood at $80, I'd probably buy some here and went to $70. 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 resounding. Yes. Ralph in Pennsylvania, Ralph. Jim, a question is about land research, which I heard from your show at the end of month January. So I did some homework and that found out that they sell their equipment to the likes of Taiwan

8:42semi-Sansung and Intel and their technology stacks up pretty well against their against their competitors. Anyhow, their PE, their PE is kind of high at like 34. But I pulled the trigger anyway and got in it like 246. The price target is the price. I want you to buy more. I want you to buy more. Lamb is got the best intellectual property of any technology. I'm not kidding. That is in that industry. And I think that you should average down. I don't care where you paid. I think it's going hard. Let's go to Ray and California. Ray. Booey out, Jim. Thanks for taking my call. Of course. What's going on? Well, my question is about service Titan. I purchased it in January. All the end. Can you believe that folks 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 like many companies that's been brought down by oil, brought down by a General May Les. That is a good company. And I think that you should hold on to it. And if

9:42you 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. All right, we have to face the fact that the markets in limbo someday it's going to go higher again. But you know, you need to have oil stabilized and we got to figure out what the heck is really going on with technology. Oh, man, money tonight. The average is might be in the red so far this year. But tapestry has been bucking that trend. So what's behind the comeback in the parent company of coach and Kate Spade? I've got the CEO to find out. Then Lloyd Black finds new books streetwise in shelves this week. I'm going to sit down with the former CEO of Goldman Sachs. You're more about his memoir and get his take on the current state of this turbulent market. Plus, put a gap down. Don't share your gap or side in the afteries. I've got the CEO of threshold theory's board. So stay with Kramer. Don't miss a second of mad money. Follow at Jim Kramer on X. Have a question. Tweet Kramer. Hashtag mad mentions. Send Jim an email to madmoneyatcnbc.com or give us a call at 1-800-743-CNBC.

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12:59Even after this beat down, there are some terrific winners in this market. Take tapestry, the parent of coach and Kate Spade. With the stock itself with an 84% over the past 12 months, putting some big gains after the company reported a ball out court about a month ago. Or today, we got a chance to check in with Joanne Poo-Voicer-Roye. She is the CEO of tapestry. The coach's flagship location with Fifth Avenue. Take a look. I'm so excited to be this in this incredible store, incredible. But I share 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, Frank Stewart, 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 business to life. And tapestry has embodied those concepts. And you're going to hear that a lot today. This is not a new brand, but it feels new. I don't know

14:01where they're feels new because of the charms. A book charm. So brilliant. It feels new because of the colors. It 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 leveraging brand building capabilities that we've strategically invested in those capabilities that help us be more relevant to a young consumer today. 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 what we've been called for we're doing a tech story. The TAM is being 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

15:01today. And I do want to share that because this doesn't happen overnight. 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. 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? 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 are the tensions they're feeling? How are they thinking about brands? How are they thinking about just their lives 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,

16:04tells 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 Spade? 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. Maybe that is the right way to go. What is your thinking? Well, Kate Spade is an iconic brand. And it has cultural relevance. If you go back to 1993 when Kate Spade 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, enjoy, and optimism. And in the day when the brand was

17:08created, Kate said, you know, and women were in the workforce in the 90s, right? We're in shoulder pads and suits. And what she was looking for was a brand that spoke to her and her personalities. 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 her evidence at coach 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 emerged with the capri, you would have dominated and 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

18:12to make sure that we cut through with consumers and build brands in a relevant way. 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. 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 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 build our brands and be relevant to that consumer in a sea of many choices. No, this is a stock show and you made it accessible, you made it accessible at the same time. You did an accelerated share of a purchase that may have been one of the most timely things I've ever seen. How did you know? How did we know? We knew that we had there are

19:14many outcomes of that potential transaction. And like any business, we're disciplined and looking at all of the possible potential outcomes and making sure we're prepared to compete whatever those outcomes or whatever the macro environment presents. And at that moment, we had an opportunity to make a strategic pivot. 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, 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 an investor day in September. 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 cash return to investors over the next three years.

20:19Now, talk to me about iconic. I mentioned tabby. What does it mean? Tabby is a great story and a tremendous icon that is a Gen Z recruiter. Gen Z loves this bag. It is. And you know, our business and our growth engine is driven by new customer acquisition. So our focus is on, as it always has been, bringing more people into the market. 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 tabby represents that great innovation. In fact, at one time, tabby almost went away. Tabby 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 really making sure that all of our people throughout our organization have the tools

21:23and 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 from there, an icon was born with tremendous innovation, animation. And this is what our consumers responding to. All right, now I want to 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. It was her first evening wear, because she could afford it as a sales person, okay, raising money for college and then selling 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 team

22:28members we were talking to Kristiana said, one of the things that reasons that she stays with this brand for 20 years is that she knows that we're selling a customer, a product they're going to treasure for a lifetime. And in fact, many lifetimes, we have products in our in our assortment that that we give second lives to that we remake and refurbish. We've kept over 14, almost 14,000 handbags out of landfills because we keep them in circulation. Well, the 100,000 eBay right now. And I urge her to do that. She said, don't worry, these are going to be my children or her daughter every day. This is Joanne Krabasurak. Thank you so much. You're welcome. CEO of CAPS. Coming up, when the market is as turbulent as it is now, few guides are better than the experience of those who've been there before. Don't miss Kramer, sit down with Lloyd Blank Fine. Next. Not every sale happens at the register. Before AT&T Business Wireless, checking out customers

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24:34Whether you're prepping for wedding season, festival season, or just planning the ultimate vacay, the right shoes can make or break an RSVP. So, on the moment, you've got big plans and we've got just the shoes at the perfect price, of course. Get ready to get ready with designer shoe warehouse. That's your DSW store, or DSW.com today. And let us surprise you. 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 Blindfund, who served as Chairman CEO of Goldman Sachs from 2006 through 2018. Basically, he took over right before the financial crisis and handled it better than any other financial institution. This week, he's published a new book which I love. It's called Streetwise. Getting two and through Goldman Sachs. This is a fantastic read. The parts of the financial crisis are really priceless. Don't thank it for me. Mr. Blindfund, welcome back to the bit of money. Mr. Blindfund, Mr. Kramer, thank you for having me.

25:35Oh, thank you, Lloyd. Lloyd, it's a fabulous read. And one of the reasons it's a fabulous read is I feel I'm in the room. I feel I'm in the room when you get part or feel you're in the room and J.R. And I feel 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 rabbi. I called for the Goldman Sachs. I was two years behind you everywhere. Yes, yes. But you were incredibly helpful to me because that's just the way you are. Well, you're easy to be helpful too. Well, okay, so tell me, it looked like that when everybody was calling at the Federal Reserve. You weren't in charge at that moment. It looks like Tim Geider was bossing you around. And at one point he told you, listen, I think, baby, walk over you. You said, walk over you, don't have a city. No, after Lehman went, they had us on Friday, that next Friday and all day Saturday, we were merging with City Group. I told us to merge with City Group. That got canceled. Funny stories. Yes, because it turns out that he was

26:37Vickram Panter was very flattered by your call. No, Vickram Panter said, I'm very flattered that you're calling to merge with City Group. And I said, well, I'm not calling to flatter you. I'm calling because Tim Geider told me to. By the way, the regulators, you know those Star Trek episodes when 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 on a difficult circumstance. I'm not taking shots at them. It was a very tense time, and nobody knew. But I would say, if Friday and Saturday were merging with City Group and that didn't work out, by Saturday night and Sunday, they had us merging with Wacovia. And so this kept on going. The different Bob still. You get the, all right, you get the idea. It was crazy though. But people, people, people under very difficult circumstances made quick decisions. Normally they would have spent a year analyzing something you had no chance to do it. I think people perform very well. They'll never get credit for it

27:42because it's like in James Bond movie, when the bomb is ticking down and goes down oh, nine, oh, oh, seven, it finally gets any 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 markets from oil, people say it could be worse in 2008, as if because oil is going up and there's 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 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 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

28:44better understanding of risk. When I look at some of the portfolios of the companies that were worried about, they don't seem like they were built for a risky moment. Well, I think everybody who's running a big organization or an institution has to live, spend 95% of the time and the 5% worst 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 because 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. The choice kept respected. What did you say when everyone was so scared when you're about to go in the Federal Reserve? I said, guys, you're getting out of a bay, you're getting out of a Mercedes in the basement of the New York Fed. You're not getting out of a Higgins boat on Omaha, which get a grip. But favorite line of the boat. Get a grip. Get a grip. Okay, so you and I have kind of similar backgrounds and I'm trying to figure out why, in the fact that, you know,

29:45short ball, you always made that joke with me. Why? I know it felt very kind of driven. One of the reasons I felt kind of driven was I always felt people were looking down on me. And I felt 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 underestimated might look at the fact of the matter. I was telling you, I was in a big crowd yesterday, I did a book event and it was very high in 90 people. And your name came up. I brought it up because people were, somebody with a couple of those guys had gone to Harvard Law School and blah, blah, blah, blah. And I mentioned, oh, I'm going to see Kramer tomorrow. And why did I bring it up? I said, I would tell you, that elite crowd, your resume, your elite resume is better, but hey, your gym, every man, Kramer. I know, but that's not what you lead with, but that's, you know, you could, you live on both sides of the line. Yes, and you always do, but what you think, but, but really it's brain and heart. You have a big brain, but you have a big heart.

30:49Not everybody has both. Thank you. Now, I do need, that's very kind of you. I need to get a sense on a daily today where you have oil off, that's private equity worries, whatever, what you would be doing on your desk. What kind of, what should we say? Would you be saying this? And I want, risk removed. 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 kind of 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 better. Well, then why can't the private equity firms come, pummel the whole other stuff? They have all these different portfolio companies. It should be in the house. You know what I do. I'm a big believer in marking to market rigorously, because not just because of the accuracy of reflecting your P&L, it's a very, very good risk management tool,

31:50because think of the financial crisis. People were marking, they didn't know that their assets were weak. Right. We marked 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 assets. I would say that there's a lot of inventory building up, and you know, there's a lot of commentary on illiquid, and by the way, illiquid, I don't understand the concept of semi-liquid. Semi-liquid means 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 you know, we've just gone through a period, and kind of in a period where the equity market is near the highs, I know we had a couple of bad days, but we live near the highs of the equity market, and in a terrific financing market. That is a good combination for being able to sell inventory companies and divisions that you'd want to sell. It should be a good market to sell into. 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?

32:55I'd be going around and pushing people harder to sell, even if I didn't like the price. That's what they need to do. Pushing you to clean the issues. Even if I didn't need to. So what difference does it make whether I like the price or not? The price is the price. Well, I'm going to leave it there. Next thing you come back, we've got to talk about your call to Laura when you were sick, which was like, you put her on hold, you know, call her back, and we've got to talk about the guys who have red suspenders, but the investment bankers that I looked, it looked down on me. They didn't even notice us. All true. Where are they now? Great question. That's Lloyd Blank, fine former chairman and CEO of Goldman Sachs. Guys, just get it. I mean, it's by the way, Lloyd is the lairist and he remembers that the punchlines at the end of the joke. Nobody's back yet for the break. Coming up, you've got questions. Claimers got the answers. Get charged up for a fast fire lightning round. Next.

34:15I'm good. You know, Jim, I've had my eye on A E I S for a while now. The stock seems to be trading at a premium. I've wondering if you think the good news is priced. I'm with their 18s. You know, that's really is the question because it's another one like the other like we did forges at the other night. It's a burden. These are really unbelievable stocks, but they can come in and when you buy them the first price, you tend to be saying, oh my god, that I catch the top. Let's do this. The stock is all 40 points from its high. I want you to wait until it's in the two 80s, two 90s and then pull the trigger. And if you miss it, you miss it. Let's go to Jason in New York, Jason. Hey, boy, yeah, Jim. Long time, Jason. I appreciate the show. Fantastic. What's going on? Thank you. Interesting, interesting in GPC that that last quarter was awful. I mean, I was actually just pride how bad it was. I don't want it. I mean, it's still not protected by the yellow 3.6. I think you have to wait on that one. Let's cut a Gerson and New Jersey Gerson. Hey, this is a person from New Jersey. Yes. What's up? What's up? Come to these capitals. No, this is a business development company. We've

35:20it. We've disliked these for 21 years now. A lot of people have been, but a lot of private equity companies that I didn't have. There was one today that we talked about with the set 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 the first time calling and long time follower. Thanks for all you did. Fantastic. Oh, great. That's a call. How can I help you? I appreciate you're taking my call, sir. My question is, in light of the pending merger between Paramount and Warner Brothers, what are your thoughts on IMAX corporations? You know, IMAX, I've got to tell you, I got IMAX is now and they're always 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 isn't IMAX and I think it's a terrific situation. I got to hand it to Gelfon. I used to make fake comes on TV a lot, but boy, he didn't. He stuck with it and he did a good job. IMAX is real. Let's cut it to new, uh, Ed, New York, Ed. Jim Cramer, my man. Yo, Cheeto. What's happened?

36:22What's happened? Booyot figure, Jim Boat. Done your way. How can I help? My question is it for you. What do you think of a quick in and out on ENVX? Oh, it's in battery. No, I can see it in, but you never get out. I don't want you near that one. I'll please stay away from it. And that led Joe's conclusion of the Lightning round. Coming up, gap shares are on the move. After the company reported earnings today, Cramer's getting a read on where things are headed with the CEO. Next. All right. What's happened to the stock gap after hours? It looks like a real turnaround story. And then it reported somewhat of an imperfect quarter if they close in line, revenue. So often they expect the same store sales at one of the divisions, small earnings miss. And yet the stock gets crushed after hours. I don't get this. It didn't help though that the full year and first quarter forecast came in a little light, but maybe they're just being conservative. So is this just temporary turbulence?

37:23We really need to worry now if the stock is starting to run. Let's take a close look at Richard Jackson, the presidency of gap. Find out what's going on. Mr. Dixon, welcome back to me. I have money. Thank you, Jim. Always good to be here. Okay. So Richard, I got to tell you, if someone told me that that gap, the regular gap could do 7% cop, I would say that's impossible. I'll pay 50 for the stock. So we are somewhere 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 been out of a bubble 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. 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 3% in the fourth quarter. It was driven by old Navy up 3%. Gap, as you mentioned, plus 7%. By the way, that's on top of last year's

38:277% and Banana Republic, 4% comp. That's three consisting quarters in a row. And of course, we know we're rebuilding Afletta. It's also, I think, important to note, we're winning across all income cohorts. And we grew share in the quarter. Lastly, I'd say a big important highlight 2025. We drove our highest gross margin in the last 25 years. 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 PNL, 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 and our 26 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 wonder about health and beauty. I love, I love that part of every store. It moves. The stuff moves. You're gone with it.

39:35Absolutely. Look, beauty, as you know, it's one of the fastest growing, most resilient retail categories in the US. And when we study our consumers, our consumer insights reinforce that they're 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 sales, highlighting the meaningful potential that this category can represent with an hour business over time. 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 2025, you will recall, we announced plans for our strategic expansion into the category with a phased approach, introducing it with Old Navy in the fourth quarter. And gap is going to

40:36be relaunching its fragrance later this year. Watch the space over the long term. We believe this is going to be an important category of growth for the brands. All right, so let's go over what we that had got us last time to adjust it. I don't know, a hornet's just a confusion, tariffs. 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, first I really want to say I'm really proud of how our team has navigated tariffs over the past year. Leveraging a broad slate of mitigation strategies to manage the impact to our P&O. Look, we view this latest news as an evolving situation. We've not included any of the benefit from the Supreme Court ruling and Section 122 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 our gross margin and our gross operating margin for the full year.

41:42It's a fluid situation 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 shares. 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. Let's go full circle to old Navy. People are going to say, well, listen, the inconsistency here is maddening. And I would come back and say, you miss a percent. That's not maddening. I mean, that everything's going in the right direction. What do you say to someone who says, now they're too episodic? I got to go with someone who's just straight up. First of all, look, I'd remind them, this is our fifth consecutive quarter of positive comms. We just delivered another strong quarter, posting a 3% comp. We made our expectations. You know, this is a large base business delivering quarter after quarter. And the quarterly

42:44comp was trending higher, in fact, prior to the winter storms, if you recall, at the end of the quarter. Yes. So importantly, and importantly, we saw sales pick up again right after the storms pass. 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 ended. This performance, in addition to the brand's consistent sharegates 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. All those categories have grown, particularly denim and active. You're going to see a lot more innovation and price value in the active space. I promise you, it's going to 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 with a number two brand in the country for

43:46kids 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, and we're going to build upon that strength. Look, I'm with you. I've been with you all the way, you know, that I'm with you. I think you got to buy the stock. It's down like this. A 10% decline. That seems wrong to me. That's Richard Jackson, Presence Hill of Gap. Read the conference call before you make a judgment. Thank you, Richard. Thanks to you. I appreciate that. You're my back. Coming up, could retail be the sector to get into with the market in motion? Kramer's returning to his old friend. Next. You know, I cover more and two of industries, but my first love is retail. I love today walking through coach and Kate's bed, noticing what can grab you,

44:50what can entice you, maybe spend a little more money, maybe you see something to wear that makes you feel more confident, brightens your day. After the war, my dad sold trousers and gimbals. One of the biggest stores was in Philly, rivaled by lits from my mom's soul lingerie. Now, unlike coach and Kate's bed, 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. Only a little bit of selling gift wrap, Scotch Day, playing boxes, printed bags. As a writer, how to make money in any market, it was an awful business. Once Saturdays, I'd go with pop to see customers, he was always treated terribly. Until one day, he saw his calling, selling droggie bags to restaurant owners, so penny-pitching Philadelphia's could take their leftovers home in bags with the restaurant's name on them. When he found that business, he no longer had the bag, 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,

45:52how many were burned with many packages. He told me how to watch the faces of sales, people watch the matches, watch the register. Maybe working there, you'd see people treated like he was at gimbals. Get a sense before you sit down on what's high price, what's on sale, what wasn't, what wasn't. Today, coach Kate Spade, the subsidiaries of tapestry, I know pop would have been smiling. Every box was checked. The register had been hung before we came in, a smile score, 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, tapacies of winter. Well, organized, great price points, beaming salespeople. True, we'll sense a wonderment. Would I buy the stock less than enough? You know, you've got to do a little homework, however, it isn't a good place to start. When I heard from CEO Joanne Kruvasaro today, it 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 the store was our favorite thing to do after watching the Eagles get together. Case in point, why don't my greatest hits error when I was a hedge fund manager was shorting the stock of a retailer named Gantos, from the 30s all the way down to zero. Goldman Sachs loved it the whole way. How did I know

46:56was going to go down? Because pop, he went to watch a series of Gantos locations during the week, then he took me to see one of Franklin Mills outside of the building. It was a busy Saturday. The mall was packed. We watched Gantos for four hours. We watched miserable salespeople ignore customers. Prices were outrageously high. The merchandise mostly women's clothes were painful to look at. Most important, we only saw two people walk out with bags, four Saturday hours to satisfy customers. Ouch. Goldman Sachs told 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 error. I got the opposite vibe today from coach and Kate Spade. I say, Gideon, this one is lucky. I like said, there's always one market summer promise. I'll find it just for your man money. I'm Jim Kramer. See them all. All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its 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 Kramer as a specific inducement to make a particular investment or follow

47:58a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full mad money disclaimer, please visit CNBC.com forward slash mad money disclaimer. Early birds always rise to the occasion for summer vacation planning, because early gets you closer to the action. So don't feel late. Book your next vacation early on Verbo and save over 120 dollars. Rise and shine. Ever savings $141 select homes only.