Mad Money w/ Jim Cramer 11/4/26

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1:20Welcome to Kramerica. Other boomerick friends, I'm just trying to make you some money here. My job is not just to entertain, but to try to explain crazy things like today. Why don't you call me? 1-800-743-CNBC. You can X me at Jim Cramer. The people have spoken. What have they said? They've said, buy the stock of Apple. All right, it's an important analysis of last night's big blue wave. I know that. But this is an irreverent show. When I look at the great rebuke of the Republican Party, it's hard to miss the fact that the stocks of some of our biggest companies are soaring today. And I know you look to me to explain the impossible.

1:55I can do it. So in a day where the average has exploded higher, Dow soaring an incredible 1 ,569 points, SMB rallying up 1.58%, and the NASDAQ gaining 1.44%, you don't need me to tell you the election results, but you do need to recognize that stock traders today rendered verdicts from the voting. And those verdicts are very positive for some of our biggest companies, although certainly not for others. Let's dive in. Today, the stock of Apple hit an all-time high, a rather quick turnaround from yesterday when the stock just got hammered, in part because of the gross margins of the companies were coming down, but also because of the rising cost of memory, namely DRAMs.

2:38Apple management said prices would continue to rise going forward. That was a total buzzkill. It was also pretty much an accepted wisdom. Now, I don't mean to go all Edgar Allan Poe on you. one of my favorites, but I have no choice to use one of his favorite concepts. It's called radiosination, the process of deductive, methodical, step-by-step reasoning to explain why this stock rallied a shocking 17 points one day after a bunch of analysts ran from this story, citing a murky outlook for the company's core products and service revenues. I think Apple's stock soared because the outlook for new data center construction may have changed, perhaps radically, because of these midterm election results.

3:22A combination of the harm to the environment and the possibility of massive job losses spelled victory for those who want the data center boom curtailed. It was resounding. It reverberated to companies that don't even build data centers, companies like Apple. Why? These modern AI data centers can have a gigantic amount of DRAMs in them. So if a lot of data center projects are being put on hold because the electorate has spoken, it's possible that DRAM prices could stabilize, or worse, they could even plummet. DRAM prices are the single biggest cause of Apple's price increases. The chief fees and markets are under pressure.

3:59Anything that slows down the data center build-out means potentially lower DRAM prices, something that wasn't possibly in the cards until last night's tallies. At the same time, last night we got earnings from AMD, and while they were strong at the data center level, the company talked about a double-digit decline in PC shipments next year. This decline was echoed by a call I have with HP management this very morning. You put the longer-term possibilities of fewer data centers in your thinking, your radiosination. Then you add the short-term demand destruction we are seeing in PCs, and voila, you have it!

4:30For the first time in ages, a genuine possibility of DRAM prices being in equilibrium, or better, at least for you. That means the endless price increases could be over, something that seemed downright inconceivable 48 hours ago. So just two days after Apple announced the DRAM problem intractable, it now looks like there's hope. And that's what was really responsible for the gigantic 5.3 % move in a stock that you could not give away yesterday. Hold it. The story actually gets better. We have heard repeatedly that Apple's products have to go up dramatically in price because of the DRAM price hikes.

5:01But tomorrow, T-Mobile is rolling out its new T-Mix plans that allow you to buy the$2 ,000 iPhone Duo for as low as$800 as part of some sort of a larger family plan. T-Mobile wants to open as many accounts as possible, wants to beat its competitors. And what better way to do it than to dangle the duo, which everybody wants, at a major discount? Apple gets its share no matter what for the duo. Lower memory prices, lower iPhone prices, neither of which was front and center or even on the radar screen two days ago. So what do traders do? They buy the stock of Apple all day, allowing it to reclaim its title as the largest company in the world.

5:34All right, now let's go radiationation on the stocks of Microsoft, rocketing 6.7 percent. and Amazon pole vaulting 6.1%. Figure out how the heck those moves happened. Until last night, the cost of the data center was, roughly speaking, about$50 billion per gigawatt. A bargain at any price? I don't think so. Both Microsoft and Amazon have been wrestling with the expense of the data centers versus the insatiable demand for compute, which can be very profitable for them. Now, Microsoft has chosen one strategy, to live within its means and not boost capital spending, while Amazon has said it's willing to spend beyond its cash flow means to meet that demand.

6:07It doesn't want to turn away customers. So how can both benefit from last night's national verdict? Simple. Microsoft cashes in because the market thinks, at least today, that there will be fewer data centers built because of increased regulation. That means it's likely that the cost of a data center will go down in the next few years because there are fewer builders bidding up prices. That's terrific for Microsoft. Meanwhile, Amazon benefits as well because investors figure that it can't spend beyond its means, even if it wants to. The public won't stand for it. Enforce discipline. The people have spoken.

6:36So that's how you get these incredible outsides moved from two different contradictory situations. Now, who loses in this scenario? Anyone who needs the great buildout to continue? So that means AMD, which reported one of the greatest upside surprises I have ever seen, yet still ended up only 1 % and spent much of the day in the red. And it means investors are projecting the end of NVIDIA's chip shortages, which have propelled one of the largest stock gains in history over time. The stock's now fallen from$239 to$200, including a 6.5 point decline just today. They and the DRAM makers, and most important, the neoclouds like Nebius, Irene, and Corlea seem neutered here.

7:12The latter three need financing. But what banks, what private equity firms are going to back-spec data centers after the American people rendered their verdict? Now, what's the reality here? Is it as cut and dried as all that? Never confuse what happens in the stock market with what happens in reality. Well, I truly believe that there might now be some sort of lid on DRAM prices, and I genuinely believe that Apple is the biggest beneficiary. I also think AMD is doing incredibly well, and I doubt that NVIDIA, which has been hammered relentlessly, is as bad as it seems. More important, I want you to understand that as important as midterm elections can be, and this one's important, the elections did not upend the business cycle.

7:47As my friend Michael Semblis, who writes the single best piece of research there is with his Eye on the Market letter for JP Morgan, wrote today, the most important market components are things that midterms do not affect. 10-year interest rates, commodity prices, Fed policy, corporate profits, budget deficits, defense spending, as well as, quote, the pace of AI investment over the next 12 months. I can't stress how important that is. We had another form of radio-ostination going when it came to the consumer and what she buys. This time, the thesis from last night's results is that the war's a bust.

8:15The president now knows it. And he would wind it down somehow because it's so unpopular. That, in turn, sends oil down, which then sends commodity prices down, which then sends the other prices down. That, in turn, puts the Fed on hold, which then makes the housing market better and causes more consumer spending. Genuine gibberish. Oh, and let's not forget that the tariff regime will most likely be repealed because that was supposed to be the problems of Congress, but the Republicans abdicated to the president. No more. We will see lower prices from that, too. No wonder this race went down today.

8:40How could they not? Look, I know it sounds absurd. I know it can't be that simple. But that was the reason that propelled so many stocks higher today. I didn't seem to. It didn't matter. It didn't matter if they're still sitting presidents totally unpredictable. It didn't seem to matter if the Fed she might not be, in fact, on hold. In 2018, a case we've studied before, we had a 20 percent drawdown in the fourth quarter. But the day after the midterm elections, well, the S &P jumped 2 percent. Then it started going back down. So to complete this tale, besides quoting the Raven nevermore, the bottom line is that the midterm results control today's trading.

9:12But by Friday, we're most likely going to be looking at the Labor Department's non-farm payroll report, and we could see a repeal of so much of this move that I hesitate to guess where we go next. But I do like the word guess, because that sums up what I thought was throughout today's session. And it's not the stuff I want to base investment decisions on, even as it's terrific for a one-day trade for the ages. Let's go to my friend Joe in Pennsylvania. Joe! Professor Jimmy Chill, how are you tonight, sir? The Chill man is happy about today's exchange with higher prices. What's going on? Today was unbelievable.

9:48I made everything I owned. I'm up. I'm excited. I do have a question, though, about a company that you recommended to me, oh, probably about five years ago. They printed money and put out good news all the time. The stock was constantly going up. And then one day, it just kind of went stagnant. and I broke off little schnitzels, as you recommended, while I owned it. And I was just playing pretty much with their money. My question is, does this stock still have legs? It's back up to$300 and closed today up$7. And what stock is that, Joe? The stock is Viva Systems. Viva Systems. We had them on. They had a monster quarter.

10:49I don't think it's done. They're doing many good things. I expect that he'll listen to them in the January J.P. Morgan Healthcare Conference. And I say that's a good one. Initially, when you said it was going down, I was thinking I detected a Philadelphia accent. And I said, he's about to pull a fast one. He's going to talk about the quarterback switch this weekend because we're doing so badly. But no, he talked about Viva. And I realized I wasn't on ESPN at all. I was on CNBC. Let's go to Sonny in Illinois. Sonny. Hey, Jim, a big get rich carefully and how to make money in any market. Booyah to you, my friend.

11:16Thank you. Thank you for that incredible plug that I did not pay for. What's going on? Investment Club member, and I love what you do for our home gamers here, man. Thank you. This company recently reported earnings, Jim. What's your thoughts on Archer Daniels Midland? You know, Archer Daniels Midland was one of those always a brides may never bride stock for ages. No one can think of reason to buy it, but it's got some game. Look, I'm not going to be, look, I'm not excited about it. It's a commodity company as far as I'm concerned. They'll tell you it's not. I think it is. I'm going to say I'm going to take a pass.

11:45There's so many other things that are moving right now that make a lot of sense. I say let's not worry about that one. I'll take Kraft Heinz over it. Now that they've sold Maxwell House, what the heck is that? Okay, they kept a 30 % interest. All right, listen, we have exaggerated moves related to the data center interest rates, and they were kind of fun, right? We're not sure if they're going to repeal or not. but I kind of felt they smacked more of fiction than fact. Oh man, buddy, tonight, where do things stand for the trucking stocks if fuel prices have rocked the sector? I'm going to catch up with the CEO of ARC Best to get the state of freight.

12:17Then, McDonald's has become a bit of a show-me story, but as a big turnaround in the store for the Big Mac, I'm digging into the company's latest quarter, and tariffs and consumer trends have shaken the beauty sector. So how is Elf Beauty holding up? I'm going to find out what the CEO of their earnings, So stay with Kramer.

13:06There are three kinds of investors that listen to this show. Those protecting what they've got, those looking for solid returns, and those swinging big. Most tools pick a lane. VectorVest doesn't. Every stock gets three scores. Value, safety, timing. You decide what matters most. Stop overthinking what to buy and sell. Go to VectorVest.com slash mad. Get 30 days for just 99 cents. VectorVest provides stock analysis tools, not personalized investment advice. Terms at VectorVest.com. Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that.

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14:43On the day after the midterm elections, investors are trying to figure out what the results mean for a whole host of different industries and the individual companies within them. Take, for example, the trucking sector, which bottomed in mid-2025 and has been quite strong for over a year since then. through steadily rising fuel prices throughout the year and caused many trucking stocks to retreat from their highs. But what happens now? Will fuel prices fall further? And if so, will that really help the truckers? Will we see tariffs walk back even more? That should be an obvious tailwind, correct?

15:12Thankfully, you don't have to guess. Joining us now is Seth Runzer. He's the president and CEO of ARC Best, leading logistics and supply chain solutions company, with a stock that's up an astonishing 85 % for the year. Good. Nice game today after a solid third quarter report. Mr. Runzer, welcome back to Mad Money. Thanks for having me on, Jim. All right. So I have to ask it. I know it's knee-jerk, but we saw a big change. Obviously, Congress goes Democratic. I can't believe that that really can mean all that much to ARC Best, especially not in the next six to 12 months. But can you read into it at all?

15:43Why, from your end, it might be viewed as positive? Yeah. When I think about political parties, really, I think about the history of our company. We've been around for 103 years. So we've seen every administration you can imagine. So really what we tell our team is we don't see a lot of things changing. Stay close to the customers. There's a lot of disruption in supply chains right now. And ultimately, if we do that, we're going to win over the long term. Well, let's talk about the disruption in supply. One thing I know is that there have been 200 trucking companies that have gone out of business in the last 18 months.

16:18Second, I have to believe that does lead to disruption itself and also should mean that there are a lot of customers up for grabs. How is ARCBest doing in that environment? Yeah, what's interesting about this market is this is the first time in our whole history, the 103 years, that this is more of a supply-driven recovery. It's not coming from demand as much. So there's been the bankruptcies, like you mentioned. There's been regulatory changes. Just a lot going on in the space. But we are seeing some positive things on the demand front as well. So PMI has been above 50 since January, which drives a lot of trucking activity.

16:53Our pipeline continues to be strong. And this quarter is another proof point towards some of those long-term targets that we outlined at our investor day last year. But we try to stay close to our customers and navigate all that uncertainty. But we're seeing some early signs of demand starting to come back. Give me a sense of what is shipping. I mean, the move in your stock has been so stark. I have to believe that there are some particular industries that are maybe reshoring something. that is giving a tailwind that is just monumental for a trucking company? Yeah, I think a lot of it comes down to that supply-driven recovery.

17:28So what you've seen is as supplies come out, freight rates, particularly in the truckload market, continue to go up. And when you think about what the industry's done and what we've done as a company, we've invested a lot through this cycle. We've been in a four-year freight recession, and we're starting to come out of that, which is great to see. So I think a lot of investors are noticing the operating leverage that we have within the business. And that's been really good to talk about. And this quarter is just another example of that leverage. I also have to believe that we've studied and followed your company for some time.

18:02It's a differentiated offering that you have. A lot of people feel that trucking business, I remember this from the old days of Yellow Freight. Look, it's just whoever has the lowest cost wins. It's no longer like that. ArcBest is doing some specific things about on time, about what the customers want, that I think is giving you an edge over the other guys. It has. Really, when I think about our approach to the market, we go to market as an integrated logistics company, but with assets. And that's differentiated in the marketplace. If I have to boil down our strategy to the simplest form, it's about finding ways to say yes to our customers.

18:36So we announced in our earnings today that our managed solutions had another record quarter. and a lot of that's driven by supply chains being disrupted. Our customers want to partner with us and we can partner with our partner carriers or we can handle it with our own assets. And that is differentiated in the marketplace. We continue to invest in tools like technology, AI. Arc Best View is our new customer platform we just rolled out. And I think it adds a lot of value to the customer supply chain. Well, give me a sense of differentiation. For instance, I know that you've got technology that lets the customer know exactly where the goods are.

19:11I would have thought that everyone had that, but it sounds like the industry itself is taking a step forward, and you're taking two steps forward in technology to be able to help the customer. Yeah, really, it was interesting. We had an AI expert in here that talked to our entire leadership team about two, three weeks ago, and he made a point that really stuck with me around technology. And he says, automation is not transformation. And I thought that was really powerful because a lot of people are talking about automating the easy stuff, quoting, billing, some of those type of tasks. What I really focus on is how do you create differentiated value?

19:47How do you create new revenue streams? We operate markets with$400 billion worth of opportunities. So we try to build technology with our customers, and that's what creates that differentiated value like our best view that we just rolled out in May. All right. Just one last question. I know that when I was on the FedEx conference call, Raj Subramanian was talking about the fact that they didn't have enough drivers. They had to go into a pool to get drivers and they cost more money than just what they had some people on staff. What is your situation in terms of the number of drivers you have and the challenge that a lot of different companies have to be able to find people who want these jobs?

20:24Yeah, that's really another area of differentiation for us. When you look at our company, and we've been around a long time, I have the great privilege of signing every single retirement letter. And I personally sign each one of them. And when I sign them, 30, 35, 40 years of experience. So we have historically low turnover at our company. And there's very few companies where our drivers actually have our customer cell phone number because they built relationships over the long term. So we strive to be a place where people want to work. And I feel like that's a differentiation because we have the best benefits in the industry.

20:58We know what type of culture that an employee is coming into. And with low turnover rates, they can build longstanding careers in our company. And that's what's so special about us. Well, that's terrific. And it does remind people, look, an 80 % move, it doesn't matter if it's from trucking or semiconductors. I like it coming from trucking because it seems like that that one is accessible if you've got a differentiated offering like ArcBest has. I want to thank Seth Runzer. Seth is the president and CEO of ARCB, A-R-C-B. Seth, thank you for coming on the show. Thank you, Jim. I appreciate your time.

21:27Of course. May I be back in the evening. Coming up, was McDonald's able to cook up a big quarter? Kramer is digging into the numbers next.

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23:17While the major averages were swinging around wildly today as traders tried to account for the results of last night's midterm elections, I was also keeping a close eye on one particular story I've been following for a long time now, McDonald's. I've checked in on Mickey D's a few times over the past few months. I covered the story in August as part of the Burger Wars segment after the company had turned in a weak second quarter report with particularly bad results here in the core U.S. market. I told you then that the company was losing to a resurgent Burger King domestically, and the stock had become a show-me story.

23:47Still, I got to tell you, I was hopeful that the company could present a promising plan for improvement at its big Investor Day event scheduled for late September. Initially, though, that Investor Day event was viewed as a negative catalyst. The stock fell further after it happened, as investors seemed to balk at the cost of the individual store renovations that McDonald's management was pitching. I wondered if the company truly had the buy-in of the incredibly important constituency of the franchisees for its big refresh plan. I covered the story again at the beginning of October, explaining why the investor day hadn't immediately turned the stock around, noting that rising interest rates at the time were also playing into the stock's prolonged downturn, as they were to many a consumer stock.

24:27But while I said that McDonald's remained a show-me story after its investor day event, I also said that I was tempted to be a buyer of the stock. Why? because I thought there were some pretty good elements of the plan that were being overlooked, like a renewed focus on value and technology that should improve throughput and efficiency. I also noted that the stock was at levels where it had bottomed before, and this blue chip stock's price-to-earnings multiple was getting too cheap to ignore. Now, you know how much I value price-to-earnings multiple analysis. The stock of McDonald's, the so-called blue chip with a long record of valuation bottoms and tops, fits this kind of thinking perfectly.

25:01perfectly. All told, McDonald's shares lost about a third of their value as they fell from an all-time high of$341 and change in March, just under 230 at their lows in early October. But something interesting has happened over the past month or so. As investors started fleeing the tech trade, and you saw that writ large today, McDonald's was one of the more defensive consumer-oriented names that they rotated into. Stock has now climbed more than 50 points, or more than 20 % from its low in less than a month, including a more than 17-point gain today. It's McDonald's after the company reported a third-quarter results before they opened this morning that, I don't know, they seemed just okay.

25:37But wait a second, there's more. Let me say out front that the third-quarter report from McDonald's today was not perfect. The company did report a top-line miss, for example. Total company revenues were up only 1 % year-over-year. Comparable sales for McDonald's international operating markets, while positive, also missed expectations. Bad numbers from France. But there was enough good news in the report, including a healthy bottom line beat and a better than expected U.S. comparable storage result to give investors confidence that the company could be back on track with its efforts to stabilize the business here in the U.S.

26:08Now, maybe I'm beginning to think that the self-help efforts announced in September are gaining real traction. For McDonald's, U.S. business comparable sales declined 0.2%. Oh, not great. That was the first domestic comps decline since the first quarter of 2025. But that result was still better than the expectations, 0.5 % decline. And far more important, the company said today that the cadence, the cadence being the month-to-month trend within the quarter was positive. See, McDonald's had already disclosed its late September investor day that U.S. comps were slightly negative in July and August.

26:40That's part of the reason why that event was such a real bummer for the Mickey D. Bulls. But they said today that the performance of the U.S. business had improved throughout the quarter. That's the cadence. And that U.S. comps turned positive in September. After what CEO though, Chris Kamchensky called a, quote, series of interventions, end quote, that the company initiated during the quarter. Interventions. I kind of like that. Most of those initiatives related to better values for you, the consumer. McDonald's restored some digital offers that drove frequency with its most engaged customers, and they shifted some of their marketing dollars to highlighting their value options, which I must say I find pretty compelling.

27:16As management noted today, McDonald's-based menu pricing, of course, the most popular menu items, chicken, beef beverages is generally below that of its closest competitors. It has$5 and$6 meal deals, and it also found success with extra value meals, like a combo meal with an average savings of 15 % that have really driven incremental sales for a consumer cash trap. Consumers are sick of higher prices. How about that? But a big reason that McDonald's shares rallied today I think is the fact that management gave more color on the next steps in his plan, especially on value. After explaining the value efforts that turned around comps in September, Kempczewski said, and I quote, our focus now is to build on that improvement and accelerate baseline performance, end quote.

27:56And he highlighted three specific efforts that McDonald's has planned for the next few months. First, nailing the final piece of our value equation, entry-level offerings. Second, further engaging in most loyal customers with compelling digital offers that give them more reasons to visit. And finally, reinforcing taste and quality credentials, including through additional training for employees on taste, quality, and great hospitality. I always think that's a good idea. And one final tweet or management said on today's call that the encouraging traffic trends that were first seen in September had continued into October.

28:29For McDonald's, which doesn't offer formal guidance, that's about us encouraging a read as you're going to get. McDonald's has seen our coverage of its performance recently, including my candid commentary when it was doing poorly. And they know I'm closely tracking the restaurant's turnaround efforts. Today, shortly after the results were published, CEO Kempchinski told me, quote, The interventions we made in the U.S. began to stabilize baseline guest counts, and we saw progress through the quarter. We're working closely with our franchisees to build momentum as we exit 2026. Most of our international markets continue to perform well despite a soft consumer environment, particularly in Europe.

29:04End quote. Now, I like that. Two of those comments about the franchisees. I told you they were really important. Listen, it's not a good deal. McDonald's shares were extremely compelling on a valuation basis at their lows a month ago. That's why the confidence sticking with the stock, even when the fundamentals look weak. With the stock well off its lows at this point, we're going to see continued execution for McDonald's in order to continue to have things running towards the high set earlier this year. But the bottom line, we're seeing progress for the Golden Arches. Actual change, not knee-jerk buying like you saw in a lot of other stocks.

29:35And that's why the stock is doing so much better than it was just a couple of months ago. There's a clear plan in place to ensure this momentum continues. And the fourth quarter has gotten off to a good start. So I still like McDonald's. I'm glad I stuck with it. I think a lot of analysts are going to change their mind based on October. And I think you're going to get higher prices for the stock. And it looks like it bottomed. It was just the classic bait bargain basement levels that made people change their mind. Now we're going to go to Joe in Maryland. Joe. Hey, Jim. Thanks for taking my call, man.

30:06Really appreciate it. No problem, Joe. What's up? All right, man. Look, I got in on this thing with the IPO. It dumped down pretty significantly, and it's coming back up a little bit. And they also make a pretty tasty sub. Should I hold or should I buy more of Jersey Mike's? I got to tell you, when Jersey Mike's went down and, you know, this stock went all the way down to, I don't know, high teens. I would say maybe Charlie Morrison has lost his touch. You know, he's the man who built Wingstops. But it wasn't. It was about the sellers who didn't seem to know what they had. Business is pretty good there and getting better.

30:44I want you to hold on to Jersey Mike's. Let's go to Cordell in Ohio. Cordell. How you doing, Jim? I'm doing well. How about you, my friend? I'm doing great. I'm calling in upon a company that was up 5 % almost today due to the Democratic sweep. Do you think that Brian Nickel and Starbucks are headed the stock to an all-time high coming up? Okay, I'm glad you brought this stock up. By the way, Dutch Pro reported a bad number tonight. The stock's all the way down to 36. Here's what I think's going on, and I alluded to this. I'm thinking about this all day. This is a classic consumer growth stock that just went crazy today.

31:31It's in a lot of baskets of consumer growth stocks. This was viewed as being a winner if oil prices came down. It'd be a winner. Tariffs went away. It'd be a winner if the war ended. Now, is it any of those? It's just a real good cup of coffee and a great place to go with a turnaround agent at the helm. But are we selling any for our charitable trust? Absolutely not. I think the stock goes to 125. And I said that to Brian Nichol himself. All right, listen to me. I'm still loving McDonald's. I think there's still lots of opportunity for the stock to go higher? Sure, I'd like you to come down a little from up 17.

32:04But you know what? Call me a bull. Watch more mid-money, including my post-earnings exclusive with Elf Beauty. That's a good one. Then today's midterm-induced rally did some kind of weird things, so a few individual hot stocks. I'm running through some that I think were just plain old confusing. Of course, all your calls rapid-fire tonight's edition of the Lightning Round. So stay with Kramer.

32:31At the Bell, Elf Beauty, value-oriented cosmetics company based in Oakland, delivered a strong beat and raise for its fiscal second quarter. Revenue jumped 51 % to$520.8 million. I remember as well above expectations. I remember it was such a smaller company at one point. While adjuster earnings beat estimates by 59 cents on a 62 % basis, the company also raises full-year sales and earnings at far above Wall Street expectations. Shares came in the report up nearly 50 % this year, and they're adding to those gains after the hours, after this market closed. So can it keep going? Let's check in with Tara Amin.

33:03Now, Tara, she's the chairman and CEO of Elf. We've been following your company for a long time. This may be just an incredible quarter, best beat that I've seen since you and I've gotten together in many a year. How did it happen? Well, first of all, thank you for having me. I am so proud of our team for delivering another quarter of exceptional, consistent industry leading growth. with these remarks, our 31st consecutive quarter of net sales growth, averaging at least 20 % growth. And then in terms of the drivers, what I'm most pleased about is we had strength across our entire brand portfolio.

33:38Every one of our brands grew this quarter, and we plan to continue that growth. Now, Turing, I've got to ask you, you made the announcement about Rode on our show, and I did not know how big it could be, candidly. You told me it could be Monster. I think it's 10X monster. How is it working still? Rode is one of the most exceptional brands I've seen in my career over 35 years in the consumer space. This past quarter, we launched Rode with Sephora in Europe across 19 countries. It was the biggest launch Sephora has ever seen. The second biggest launch I've ever seen was our launch into North America with Rode.

34:18It's the number one brand by far in Sephora. We continue to have incredible momentum. And it's such a special brand. And it's just really great to see. And it's not just the growth and the biggest launches anyone's seen, but they have amongst the highest repeat rates in beauty, which really talks about the durability and the strength of our products. It was funny. I was reading the results. I said, geez, what is this charge? Well, it turned out to be the charge you have to take when business is far better than you expected for the road deal. It is. I mean, it's exceeded every possible expectation to have the number one brand in Sephora in the doors we're in.

34:52the number one within Mecca, and continue to have a very strong direct-to-consumer business. We just have incredible momentum. And even with all the growth we've seen with Rode, even with our expansion in Sephora Europe, we're only still in 40 % of their doors. So we still have a lot further to go on Rode. I did not know you still had that much ahead. That's fantastic. Now, you say the community has spoken, and the community wants hair care. Is that a—and fragrance. Now, are these really growth categories? Yeah. Oh, they absolutely are. I mean, hair care has been one of the most requested categories we've ever had.

35:28I think in the U.S. alone, hair care is a$17 billion category. Fragrance is an$11 billion category. Our consumers have been asking for it. And the great thing is we can apply the same model when we successfully took Elf from color to skin. It's prestige quality products, all at an extraordinary price. We have the exact same thing with hair care. It's a curated lineup of six products, all with a clear prestige frame of reference, all at$10 or under. We've exclusively launched it with Target to help nurture the brand already in three months. It's a top 20 brand within Target in hair care, number seven in styling.

36:04We have incredible momentum. The same is true with fragrance with our Elf Pop collection. We've put that on Amazon and TikTok Shop. It's off to an incredible start. And it's just great to see just how elastic the Elf brand is and gives us a lot of confidence in terms of what we can do for the future. Paul, it reminds me when you first came over the Style of 16, you told me that cosmetics were overpriced. Of course, you had a very good sourcing mechanism. It's only gotten better. I think fragrance is one of the most overpriced categories ever. Are you going to do the same thing to what you did to cosmetics, to fragrance?

36:38Well, that's our objective. We take seriously our responsibility of delivering a superior value every single day. After all, two-thirds of Americans live paycheck to paycheck. And we take great joy of being able to get prestige quality at unbelievable value. And that accessibility really has been propelling our results, along with our powerhouse innovation and disruptive marketing engine. How are you able to both be in Dollar General and Sephora? Sephora being one of the most expensive places I've ever walked to in Dollar General, a place for iShop? Well, it talks to the elasticity of the Elf brand.

37:11We launched both Sephora Mexico and Dollar General in the same quarter, and we're number one at both customers by a pretty wide margin. We recently took Elf into Sephora Brazil, and again, we're number one in both dollars and units. So it just really talks to the strength of this overall proposition of bringing prestige quality to an unbelievable value. and our ability to engage with consumers. We just had our most recent Piper Sandler teen survey. We had two unprecedented results there. Elf was the number one brand amongst teens for the ninth consecutive survey with a mind share five times greater than any other brand.

37:47And Elf and Rode were the only brands that were top 10 in both color cosmetics and skincare. So it talks about the strength in our engagement model of how we connect with our communities. Speak to me about what's going on in terms of where you manufacture. what, about 70 % is now outside of China? That's right. And if you look just a few years ago, only about 1 % of our manufacturing came out of China. So I'm really proud of the diversification efforts the team has been able to do while maintaining that advantage we have, the best combination of quality, cost, and speed in our industry. And it really talks to the strong partnerships we have with our key suppliers and our ability to take that same advantage and put operations in different countries, including Thailand, the U.S., Italy, South Korea.

38:34We've really been able to expand that supply chain. And I'd say it originally started with helping mitigate some of the risks with tariffs, but I'd say it's transformed more into helping meet the strong global demand we see for our brands. Our international business was up 165 % in Q2, and we see tremendous white space in terms of continuing to bring our brands around the world. All right. In the time we have left, you've always had a good handle on different seasons. What do you think about holiday season? Well, we're quite bullish on holiday. We have real momentum across every one of our brands.

39:07You know, we say Elf is a perfect brand to gift, whether we put it in a box or you put it in a box. We just introduced a new holiday campaign and we have incredible innovation across each of our brands. So I'm very excited about what we can do. Well, look, you have saved people billions of dollars. And I will say when I brought Elf home, my wife, I took the label into the back, as you know, but we never went back to the other guys because they were 10 times the price of yours. And my wife could never figure out what was different. So congratulations to Rangamine again, delivering fantastic quarter.

39:41CEO of Elf Beauty. Great to have you back on the show. Thank you for having me. Man, buddy's back in for the break. Coming up, he's the fastest mind on Wall Street, so we're putting him to the test with your help. Bring on the lightning round next.

40:00Booyah, Jim. I love you, man. I've been watching you from day one. Thank you for all the wonderful advice that you provide us. I'm learning so much watching your show. Watch your program every day. I love it. I always wanted to say booyah on your show. Thank you for being the greatest in the world. We consider you the money market maker. and we thank you for all you do. I love your show. I love your show, and we think it's the most entertaining program on TV.

40:43It is time! It is time for the White Mouth.

40:51And then the lightning round is over. Are you ready? Let's start with Bill. It matches Bill. Jimmy, you know, it's great being a club member, you know, because I get you and your staff to lean on to these tough times. And this volatility is just crazy. It sure is, Bill. I learn a lot from you, you know. It sure is. It's fantastic. Well, then how can I help you today? What can I do? What can I do? Hey, Jimmy, can you tell me what you think of ProtoLabs? 3D printing. You know what? I don't have enough knowledge. Bill from Massachusetts, write that down. He has stumped me. I don't know ProtoLabs, but he has an explanation, and I will come back with one.

41:34Now we're going to go to Sam, also in Massachusetts. Sam! Sam, I think it was Peter Lynch who said that oftentimes the stock, a lot of the money is made when stock goes from horrible to just bad. And I think that might be the case with NKs. But the management needs to look into other business models. I listen to their earnings call. It sounds like a dog and pony show with these outside of residential. You've got to pick something and you've got to go for it. I think they should go for grid scale batteries. What do you think? You know, I just can't recommend them. Not when I got Nex Power. When I got Shug, Dan Sugar in my corner.

42:05That's the way you're going. You're going with Shug. You're going with Nex. Let's go to Charles in Georgia. Charles. Hey, Jim. Booyah. Booyah. Hey, quick question. Honeywell Aerospace, they did not get off to a good start after their spinoff. But it seems like maybe things are settled a little bit. It's now a good time to look at them as a long-term investment. You know, my ma, this great ma, she said, not a mayor. And she always said, if you don't have a good word to say about someone, then don't say it. Bob in Massachusetts. Bob! Hi, Boston and Bob. I'm a fan of growth stocks that are making money.

42:45I need your opinion on FTAI. We like FTAI. We like aerospace, but we also like How I Met My Mother, which is another name for Hal Met. And I think that stock is in better shape than this one. I'm going, man, I'm on a roll here because I'm going to Joel in Ohio. Joel! Hi there. I'm curious about Dow. Dow Chemical. So it's you know what? I'm going to tell you something about Dow. I've decided I want the company on, obviously, but it is so levered to China. We need China to do better. I see China's got this plan where they're going to move up stocks. You're going to buy a lot of stocks. That's my kind of country.

43:22Count me into China. They're buying the government's buying stocks. You can beat that. But I wish they'd come here and buy some Dow. OK, let's go to Mark in California. Mark. Jim, you hated this stock, but a lot has changed. Their revenues and margins have exploded. They received over$225 million in new contracts just since July. And with the big NASA contract they secured last week, they're going to the moon. It's Big Bear AI. B-B-A-I. I hate those guys. I hate those guys. Look, I was a little cavalier with Big Bear. I just don't like those guys. Because you see they are losing a lot of money.

44:02That's why. That's why. And that, ladies and gentlemen, concludes the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Stick around. Kramer's wrapping up tonight's show with more Wall Street wisdom. Next.

44:29What should we make of these incredibly outside moves today, so out of proportion with reality? I'm talking about things like the McDonald's 6.5 % move I mentioned early on, on just a slightly better than expected U.S. comps number. Or how about Starbucks, with a stock that rallied nearly 5 % on no news? Or TGX, which jumped more than 5 % on nothing? Those are two of the stocks we highlighted in the CNBC Investing Club's Home Stretch Report today, which comes out every afternoon, courtesy of my partner Jeff Marks. I think what it tells you is that when you have rapid-fire buying, Both through ETFs, which often routinely dominate trading now, and through impromptu baskets of stocks set up by trading firms, you get these ridiculously large moves that can be repealed in a nanosecond.

45:12Investing club members know that we are definitively anti-trading. We think trading is fine for hedge funds. I used to do it a lot in 14 years as a hedge fund manager. But individuals can't possibly hope to beat both the machines and the big hedge funds while still doing their day job, for heaven's sake. That said, today was a day where I wanted badly to break my vows and peel off some stock. simply because of the absurdity of the session. For example, my child was just on TJX for ages. It's been a mold-of-year home run. However, this year it stumbled barely. Frankly, we have no idea why, because they wouldn't tell us.

45:39Management did promise that things were under control and even said they were getting better. I can't just take their word for it anymore, not in this kind of market. Stock plummeted on that news from 150 to 144, and then it kept going lower to 122 in mid-September. It was sickening. Today at Longest, stock got back to nearly 145 because of the exaggerated rally, climbing over seven points based on, again, nothing but gossamer theories about what will happen to rates in oil. It was a fact-wise move. Call me a seller. I no longer trust TNGX, at least the way I used to. I wish I did. Maybe I will after their report, but what an opportunity to shed some of the big positions to a ridiculously outsized move.

46:16Now let's talk about the other direction, Capital One. The company with high interest rate credit cards saw its stock plummet eight bucks at one point today as the crowd decided the Democrats would cap rates. That's right. ruining their business model. Get some sort of cap on high interest rates. Funny thing, the crowd said the same thing when President Trump waited for their credit cards earlier this year. Remember in January when he said he temporarily capped credit card rates at 10 %? That effort failed miserably. Today, it took a full hour of free fall before buyers came in and caught a five-point move up, capital one finishing down just two bucks.

46:46I would argue that it shouldn't have moved at all. Either way, yes, today was really one heck of a day for the bulls. The move in the indices it was extraordinary. But when it comes to some of the individual stock trajectories, I found it hard to justify almost any of the biggest swings based on the actual fundamentals. I cannot emphasize how silly so much of today's market was. It would be sensational if we could say that happy days are here again, that gridlock really is terrific, that inflation is on the run, and that the Fed might even cut, which is what a Martian would definitely say if she landed in my office today and saw these fanciful prices.

47:19It'd be incredible to think that you can just buy stocks and a rebuke of the Republicans. Incredible things have occurred, but the valuations don't change on a dime. And stocks, believe it or not, are meant to reflect the value of the companies they belong to. Maybe today is the beginning of a huge move, or maybe today was the beginning and end of a huge move. For many stocks, I fear it was the latter. I'd like to say there's always a bull market somewhere, and I promise I'll find it just for you here on Mad Money. I'm Jim Cramer. See you tomorrow. All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do 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.

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