Mad Money w/ Jim Cramer 9/9/26

0:00There 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. If you're a small business, the right hire can be make or break. Indeed Sponsored Jobs gets you quality candidates when you need them most.

0:37Join the 3.3 million employers worldwide that use Indeed to connect with quality talent that fits their needs. Listeners of this show will get a$75 sponsored job credit to help get your job the premium status it deserves at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed Sponsored Jobs. My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a boom market somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money.

1:20Welcome to Kramer. I'm just trying to make you a little bit of money here. My job, not just to entertain, but to teach. So call me 1-800-743-CNBC. Tweet me at Jim Cramer. Oil controls this entire market. When it goes down, most stocks go up. When it goes up, few stocks can rally. It really is that simple. Right now, with Brent crude slicing through$100 a barrel, only a small group of stocks are going higher, away from the oil stocks, of course, and the rest are indeed headed lower. Dow sinking 45 points. S &P declining 0.48%, NASDAQ edging down 0.64%. Before I go into what's wrong here, though, there's suddenly a lot going wrong.

2:04Let me just say I am an optimist at heart and historically that's been the correct stance. When I first walked down the street right out here on Wall Street 45 years ago, Dow's industrial average stood at 853. Today, it's at 52 ,380. Long term, it really doesn't pay to be bearish. At the same time, there are a tremendous number of stocks that have created multiple millionaires. And as long as you're willing to stick with them, of course, and that's going to continue the same. So I don't want to give you the sense that I'm turning bearish here. I'm just acknowledging that there's a very real negative, and it is oil.

2:37Tomorrow when we hold our noon meeting for the Investing Club, I'm going to have six ideas that I think make a ton of sense to buy right here, right now. I also want to pitch you on an accidentally high yield or a stock that's gotten so low that its dividend supports the same 5.3 % payout as the 30-year treasuring. At the end of the day, my negativity right now revolves around just one thing. But it's a big thing, and it is the price of oil. We've been acting under the illusion that somehow oil was about to go down. We thought there was something going on that would end the war with Iran, either through diplomacy or maybe our bombing campaign doing enough damage to force them to the table.

3:10But we're getting a very different picture now, aren't we? The Iranians seem to almost welcome this war. If anything, they want to poke the bear to demonstrate that their drones give them a level of military equivalence. The result, oil is going back over$100, and that's not just a magic number that inspires selling. It's a number that's been breached before. Yes, it inspired a wave of selling then, but then the bears were brought to heel because President Trump assured us that peace was at hand. Rather than real peace, though, this was more like the Neville Chamberlain piece in our time. Normally, I wouldn't be too concerned about oil at these levels.

3:44The last time we got there was July 23rd. Right before the breach, the president said that oil was going to come down. It stayed up on the 24th. Then Trump paused his airstrikes over the weekend. On the 27th, he said he was having good talks with Iranians. Just, you know, oil drops 8.7 percent one day and we put the triple digits behind us. Or so we thought. See, this time it could be different. First, we've decided to wage an economic war, something that so far seems futile. Iran is already the most heavily sanctioned country on Earth. What else can we do to them economically? Not much. Besides, Iran's not waging an economic war.

4:16They're waging an actual war. They didn't close the Strait of Ramos with sanctions. And as long as the Strait's nearly impassable, which it is, we've got a serious problem. Second, tomorrow we learn how much of our Strategic Petroleum Reserve has been released. When the war started, we had 415 million barrels of oil in the Strategic Petroleum Reserve. That number fell to 286 million at the end of August, 31 percent decline. I know that still leaves plenty of crew, but I think that we now need to be on some sort of oil watch countdown. Now, Wall Street analysts will soon be telling you what day the Strategic Petroleum Reserve will run out of oil.

4:48And it will. The climate gas prices have been steady. Premiums,$5.12 on average. Diesel, record$5.94. And that is pass-through, believe me. I always tell you that we're a service economy, and the service economy may be about to sputter. The stocks of the retail complex are certainly predicting that exact thing. The house of pain. Even the most reliable of chains. Take an outfit like Casey General, okay? It flubbed this morning, sending the stock down more than 14 percent. OK, you think you haven't heard of it? It has three thousand stores, people, and it is a perfect bellwether because it sells gasoline on the outside.

5:22And it's all like got all that convenience store stuff on the inside. Snacks, beer, you're selling really badly beverages, the breakfast pizza, which I love so much. Management was quite upbeat about the numbers. However, you can't help but notice that when the price of fuel goes up, people spend less money in the stores. And the inside same-store sales growth fell from 5.5 % last quarter to just 3.2 % this quarter. Percentage base is big. So Wall Street came up to a simple conclusion. It just chose not to pay any attention to management's commentary about how strong certain stacks were or how, by the way, ready-to-drink liquor did quite well even when bureaus bad.

5:54Instead, the market decided that the price of oil has gotten too expensive. And it's now causing a decline in sales of staples, which has been my biggest fear since the Iranians closed the strait. And now it seems to be happening. This is the first tangible sign that gasoline is now finally having a real deleterious impact on the economy. The street was quick to send down anything retail today, anything that sold in retail, anything that was inside the buy, anything discretionary, like monthly cable bills from Comcast, Crush, Staples, plain old food stocks, Hammered, home goods, hardware, smash.

6:24So the question is, why not just turn ultra bearish? The answer is threefold. First, we have a very strong rally in the data center stocks once again, especially semiconductors. Of course, that's not good for all of tech. Apple put out some really cool phones, including a foldable one that's listed for nearly two grand. The high price has to do with the chip shortage. So we're in zero sum territory there. Still, there was enough excitement that Apple was able to bounce off a three dollar loan to finish just 88 cents down. Second, the banks were strong. Now, I know that's a little counterintuitive.

6:52We have to do some drilling down here. We're going to listen to Bank of America's CEO Brian Moynihan later in the show. It seems like high oil has yet to hurt America's savings, perhaps because unemployment is still very low. Third, and most important, if the surface economy stocks bled over to the banks and the remaining tech stocks started rolling over, I believe that the White House will adopt a new strategy on Iran. They'll start talking peace again, and that usually is enough to send the market way up. Now, the only reason why I don't think it's going to happen quickly is that the S &P is only down a couple of points from its high.

7:23In other words, just when you get too negative, though, like we did in the last week of July, the narrative changes typically for the better. That will take the pressure off oil, which will ripple to gasoline, make us forgetting about the declining strategic petroleum reserve. Why do I think this? Here's the bottom line. I'm an optimist now for the same reason that the Dow's up 51 ,527 points from where it was trading 45 years ago when I got started. Historically, it pays to figure out how things could go right, because more often than not, that's exactly how it plays out. Let's go to Mark in Arkansas, please.

7:55Mark. Booyah, Jim. First time caller. Excellent, Mark. Thank you for calling. I really appreciate it. How can I help you? Enjoy watching Mad Money and Squawk on the Street in the Morning. Great shows. We appreciate everything you're doing for us. Thank you. Thank you, buddy. How can I help? Thank you. Hey, I have got a question on applied materials. What are your feelings on having it as a long-term hold? I want to do more than that. I want to do a long-term buy because I listened to Gary Dickerson today. He was being interviewed by my pal David Faber. By the way, Faber crushed it today. A lot of us don't say enough about our other guys.

8:31Faber crushed it at that communicopia, which I called cornucopia by mistake, and all the young people laughed. Ha, ha, ha. But AMAT is real good. I think you should stick with it and buy some. Let's go to Joseph in Washington. Joseph. Hey, Jim. Loved the show last night, especially the stock draft. Oh, thank you. Thank you. Yeah, I mean, Gibbs, man. Gibbs was NVIDIA. The people at NVIDIA were thrilled that day that it was Gibbs. A lot of people thought that it was going to be Mahomes. Totally wrong. I think he's still an undrafted free agent. How can I help? Yeah, I was born and raised in Buffalo, so go build, and maybe we'll see each other at the Super Bowl.

9:05Did you really? Okay, look, I picked Cook, okay? I picked Cook number eight. I saw you pick Cook. He's a top five running back. I got laughed at all day. And you know what? They're all going to be laughed. I'm going to be laughing at every one of them. Cook is terrific. I got that, of course. I'm a first-time caller, new viewer, new club member here after my book club read How to Make Money in Any Market earlier this year. Okay, and I will see you tomorrow at 12 at our conference call. I want everyone on that call. It's going to be explosive. What's up? I'll be on. Since reading that, I've sharpened my investing strategy and built my basket of stocks to deliver some big winners, including four stocks with 100 % plus gains.

9:42This year alone, including cybersecurity club names CrowdStrike and Palo Alto. But I need your help with this, Nicky. How can I help? Since this recent spinoff, this stock has been up, down, and all around. I have a sizable position I'm underwater on and would like your guidance on how to manage this pick heading into earnings. What say you about FedEx Freight? OK, now what we're doing is we're holding back to buy more. You see, it's still a small position. We can't seem to be able to get out from under the oil price. It's trading with oil. It shouldn't. It has a pass through. It has not been a successful investment so far.

10:15I don't hide that. I always admit that right at the top of tomorrow's show. But we are not adding to the position yet until we see it bottom and we see oil start coming down. It's one of those stocks that we just want to have as a hedge in case oil does go down. But thank you for saying all those nice things about the club. And thank you for Buffalo. All right. You can be negative if you want. I don't. It's fine with me. All right. But remember, longer term, it pays to figure out how things can go right, not wrong. May I have money tonight? I'm getting a cute read on the state of the consumer, the broader economy, and the country's financial backdrop.

10:48When I sit down with the CEO of Bank of America, Brian Linnan, then Jersey Mike just reported his first quarter's public company. I'm finding out the state of affairs with the CEO. And as retail stocks are getting crushed under rising oil prices, could a K-shaped economy help the parent of Coach and Kate Spade buck the curve? I'm getting last with Tapestry's Top Brass, so stay with Kramer.

11:18Don't miss a second of Mad Money. Follow at Jim Cramer on X. Have a question? Tweet Cramer. Hashtag Mad Mentions. Send Jim an email to madmoneyatcnbc.com or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com. There 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.

12:06VectorVest provides stock analysis tools, not personalized investment advice. Terms at VectorVest.com. If you're a parent and want to help set up your child for success, then IXL is right for your family. As an effective and affordable online learning program, IXL covers math, language arts, science, and social studies using interactive practice problems for kids from pre-K to 12th grade. Listeners can get an exclusive 20 % off IXL membership when they sign up today at IXL.com slash 20. Visit IXL.com slash 20 to get the most effective learning program out there at the best price. At Jared Jewelers, we know the right gift can bring a lifetime of meaning, a memory cherished forever.

12:4820 % off storewide. Exclusions apply. See Jared.com backslash radio for details. Jared, make the holiday last forever. Shop Jared Jewelers.

13:03You know, these days there's so much speculation about the state of the consumer. I don't like to speculate. I prefer to go straight to the source, and nobody takes the pulse of the consumer and the broader economy better than the Bank of America, the nation's second largest bank by assets, which, by the way, has put up a nice 14 percent gain year to date. Earlier today, I had a chance to sit down with Brian Moynihan, chairman and CEO of Bank of America, right here at the New York Stock Exchange. Our conversation comes as we approach the 25th anniversary of September 11th, with Bank of America making new commitments to organizations dedicated to honoring the victims, first responders and their families.

13:39Take a look. I want to talk about 9-11. We're on the eve of it. I think your bank, both charitably and as a commercial enterprise, responsible for a lot of the rebirth here. Why don't you talk to me about Bank of America and your role in an amazing turn that is downtown? So if you think about Bank of America, and this building is an important part of the tragic legacy around 9-11, because this is where America's epicenter of the financial markets happened. And the job was to get this back up and operating. That was the job, because we had to get the securities market started. But if you think about the legacy, we had Barrel Lynch is now part of the company.

14:21We had Fleet Boston, which was the quick and rye specialist business. And then we had Bank of America. We had U.S. Trust. And so all those companies are now part of one company. So as we look back, the stories from my teammates about going through that day are amazing. And the story is immediate. We're going to not let them get us down. We're going to beat this back. We're going to reopen. We're going to put America back in. And all of us worked in this industry who are fierce competitors, worked together to say, how can we get the securities markets back up? A lot of corporate issuers said we're going to buy back a bunch of stock on Monday.

14:55We got it going. and it recovered. And there was a lot of work, and there was a lot more work. But it was a story of resiliency, unity among the country, and just fabulous personal stories of recovery and resiliency, horrible stories of loss and grief. And, you know, I think back about it a lot because I was literally on my way down here when that plane hit. And you just wonder. That was terrorism at its terrorism worst. because they took something as ordinary as flying and turned it into a terrorist act, and America felt unsafe. And the President Bush, the city, the stock exchange, all the financial service companies all lower Manhattan recovered.

15:41And then since that, you've seen this. This is a vibrant place now. My daughter lived down here for a bunch of years. Kids are back down here running around. It's just a whole different place than it was. In the aftermath, it was like it's never coming back. And then even we built our building at Bryant Park in a place that was not well built back then, you know, off of Times Square. We built that building with Liberty Bonds, they were called, to help rebuild Manhattan because nobody was invested in Manhattan. And we put the building out and we ended up occupying it by 2007 or 2008 or whatever it was.

16:10So think about how fast for a 51-floor skyscraper to go up. So we're not alone. And then our company supported veterans, first responders, and we just recently announced another grant to Tunnels to Towers. and we've been doing a lot of work across the last 15 years, probably$100 million for veterans and first responders. You always, I felt, a soft touch. We're hard business people, but we have a hard one. You do. You do. Now, let's talk about present day. We're in a remarkable moment. You have the best data, and the data show that things are pretty darn good in the country. So think about what would be the indicios.

16:47Take the opposite. What would be the indicios of problems? Consumers wouldn't be spending. Consumers spent in the month of August about 4 % more than they spent last August, which is a pretty good month because that's after Liberation Day and the recovery. Last quarter it was 5%. So it's kicking along. That's consistent with a strong growing economy. The second dish should be credit. Our credit statistics are as good as they've been for years. Charge-offs in consumer, delinquencies in credit cards. You hear about record outstanding balances in credit cards, but the economy is 40 % bigger, whatever it is, since 19.

17:16Everybody compares it. So what you've seen is a recovery back to trend. And then you look at businesses, business credit is very strong. People are using the lines of credit investing. That's been a little slower to come back after the pandemic because just the uncertainty of trade, tariffs, you pick the issue of the moment. But, you know, they're strong. Their credit's strong. They have the ability. It's more costly. And the place that higher rates affect a small, medium-sized business who borrow on lines of credit, that's the big place. It affects mortgage rates, but where it really affects the short-term rate structures there.

17:44But they're borrowing. They're using the lines. The credit quality is good. They've figured out in a world where a lot of things are changing, they figured out a path forward pretty much. They still worry about gas prices and how it affects product prices. But everything we see is fine. The capital markets had a gangbuster second quarter. Year-over-year numbers are great growth stock numbers. Our earnings were up 30 % and things like that. We had a great quarter. What's interesting is that level will be hard to sustain the growth rate at that level. But the aggregate level, the S &P and stuff, has stayed.

18:19And that's good for the wealth management business. Investment banking fees are a little bit, you know, sort of bouncing around a little bit. But, you know, it's just a lot of activity. Last year, in comparative, it was a good quarter. But we feel very good about deposit growth, loan growth. It's stuff that makes the American economy visualizing. And consumers are spending and consumers are employed. And wage growth. We see wage growth in a lower income group because we see their paychecks coming in. The lower income, we had that K structure. We converged a little. The most recent numbers you have are very encouraging for the people who are less well off in the country.

18:51So there's an affordability issue out there in people because it's real. Gas prices were up a dollar a gallon or whatever, the Labor Day, Labor Day. That's real in people's mind. Rents and things like that. What you saw is some of those things mitigated, were mitigating across time. And what you're seeing is wage growth catching back up. So you had a period after COVID where wage growth, and a great resignation, remember, we all talked about that. Wage growth was very fast. Then wage growth slowed down, and now wage growth is back on. The encouraging thing we're seeing is two things about we split our data into lower, middle, and upper income just by thirds.

19:24In the lower income strata, you're seeing wage growth of about 3.5 % to 4%, and you're seeing spending growth come up with that. That's very good because that's a lot of people, and that means that they're feeling pretty good about their positions. Unemployment's very low. New claims for unemployment. I mean, I know that I'm very concerned about gasoline, but job getting a job, not so hard as it's been in the country. The fact is, is that the credit situation has been made to sound like we should be worried. But it is a bigger pie. Well, the statistics that drives me crazy is the Fed reports these delinquencies.

20:00But if you were charged off two years ago, you're still in the Fed's data. if you report it, the Bureau is having charge. The reality is the charge-off rates that are going through bank P &Ls and the people who grant credit, which would cause them not, are as low as they've been in many years. And so that's great because we're as aggressive with credit granting as we can possibly be being judicious and responsible. Now, what could go wrong? There's a parade of horribles out there. The Iran war doesn't solve fast. The Ukraine-Russia war doesn't solve fast. There's escalation of Southeast Asian issues or something.

20:29There's a lot of things that people could say, but meanwhile, here goes the U.S. economy. We're going to grow in the mid-twos this year. And we don't see anything in this way. Even with Fed hiking rates, we still see the economy growing through that. Okay. Now, you have always hired a huge number of people in the summer. It's been a great time. Everyone knows that you've got a great program. Have you cut back the number of people you're making offers to because of AI? Or has AI made it so each person is so productive that you just want to continue to hire? We hire, call it 2 ,000 summer interns a year in 2000, kids from schools in a defined recruiting program.

21:06So 400 schools for 2 ,000 kids, 2 ,000 a summer. We haven't changed it. We are now being careful as we think about those kids' career path, get them to places where there's, you know, and move them around a little bit more, redeployment as we call it. That's a responsibility of management to show them places they can go because, yes, the AI techniques being used in investment banking today make the analyst more effective, but there's thousands and thousands of other jobs as talented teammates can do, plus we can just do more productivity and more business. So what's interesting, I think managers that I talk to, I mean CEOs and others in my team, we're all trying to manage the impact on the human side of this because at the end of the day we need talent, need lots of talent.

21:48And I thought Dara from Uber said it well two years ago when he said, you're not going to lose your job today, You may lose your job to somebody who knows how to use it. That's what we tell our team. Learn it. Make it your oyster. The world's ahead of you. Go drive it. And they are enthusiastic. And as we get to the next recruiting class, their people have had AI their entire college career. You've now made a jump. So they don't know what we're talking about when we talk about AI as a change for them. They're saying, I've been using it. And so it has all its pluses and minuses, all the debates in the educational process and how kids use it, and all that stuff, universities and high schools are figuring out.

22:22But at the end of the day, these kids know how to use it. And that's terrific because they're going to make us better. Now, are you ever concerned about getting more young people in as savers? For instance, we read about Robinhood with 28 million accounts. Is that a threat to Bank of America? Some of these companies where they start, they get people in through maybe crypto, maybe through gambling, but then they end up with IRA. And next thing you know, the 401k. I mean, is it something Bank of America has to worry about? Well, we have Merrill Edge, which is a great product. The Merrill Edge develops about 10 % more customers every year.

22:55Average starting balance is$100 ,000 plus. So it's a more substantial investor, and we drive that. And that's our viewpoint. I was talking to your colleague about when was the last time I rang the bell, and I think it was 2006 where we announced$0 trades on equities in Bank of America securities. Everything's a new concept. We did it back then because we had an online brokerage, so-called. And so we feel very good about that business. I think the key is to get people to budget, save, and then save for retirement. And I was talking to a young fellow the other day, and he said, somebody said, maximize my 401k.

23:29And I said, that's the answer, maximize your 401k. It's important. Now, I know that you have more emphasis on cybersecurity than pretty much any other company in the world. How are you feeling? I mean, how are you feeling about what the machines can do to us, about the machines breaking in? It seems like it's more perilous than maybe it is. You can tell me this because you're the guy who's seen it all. Well, we're lucky that we have a very talented group of 3 ,000-plus people work on this full-time. We have a temperament among the whole company that this is job one, most important job. Don't debate the costs that come allocated to you.

24:05Business line leaders getting allocated. Don't debate that. Just let it go. They work closely with the industry. Our industry, actually, the banking industry, the financial service, has been very good at this and worked hard. These new tools present interesting questions. The way that they can find vulnerabilities fast is unbelievable, and they're good at it. And so what we've been doing is using them in cooperation with the frontier model providers and others to figure out how to run them against that, whether it's open source, closed source, proprietary software. Run it and figure them out. I was talking to an expert in this field the other day.

24:36He said, you have to remember, Brian, on the other side of this, is this wall to help you harden your systems faster. So right now you feel like, oh, my God, vulnerabilities and patching and go, go, go, go, go. There'll be a time when you tip over that they can help you find it. Are there some interestingly fascinating stories going on right now? They're a little bit science fiction oriented where you take over and stuff. That we have to do. And I think the companies that make these models are starting to realize they've got to be much more careful about the guardrails and things. And they're trying to figure out how to slow that down.

25:07Not slow down the ingenuity. Slow down the negative side of the industry. do that, don't we? I mean, you can be a leader in that because you are a leader in cybersecurity, among many other things, including a leader in banking. I want to thank Brian Moynihan, the chair and CEO of Bank of America, BAC. Great stock. Terrific job. Thank you. Thanks. Coming up, did Jersey Mike's deliver in its first public earnings report? Kramer is checking with the top brass next. There 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.

25:45Most 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. If you're a parent and want to help set up your child for success, then IXL is right for your family. As an effective and affordable online learning program, IXL covers math, language arts, science, and social studies using interactive practice problems for kids from pre-K to 12th grade.

26:24Listeners can get an exclusive 20 % off IXL membership when they sign up today at IXL.com slash 20. Visit IXL.com slash 20 to get the most effective learning program out there at the best price. At Jared Jewelers, we know it's about more than fine jewelry. It's the moment they open the box. That smile they can't hide. Knowing you chose exactly right. Because the right gift can bring a lifetime of meaning. A promise. A milestone. A memory in the making. Make every moment unforgettable with 20 % off storewide. Exclusions apply. See Jared.com backslash radio for details. Jared. Make the holiday last forever.

27:06Shop Jared Jewelers.

27:15What's happening with Jersey Mike subs? At the end of July, this Blackstone back sandwich chain came public with not enough fanfare as far as I'm concerned. Finished down 6 % at the time I told you buy, buy, buy. But the stock really didn't catch on until today. This morning, Jersey Mike supported an inline quarter with better than expected guidance for same store sales. And that's why the stock jumped over 7%. I tell you now, I'm wondering if this might be the start of a longer term rally. Let's take a closer look with Charlie Morrison, old friend of the show, CEO of Jersey Mike Subs. You might remember the run that he had at Wingstop.

27:47It made a lot of people money. Mr. Morrison, welcome back to Mad Money. It's great to be back, Jim. Great to see you. Well, Charlie, I know you as someone who has been able to put up some pretty darn good numbers at the previous place. So you're one for one with me. Now, I got to ask you, your outlook today was incredible. A great forecast. And what makes you so confident that you can deliver on those numbers? Well, we've got a lot of momentum in the brand already, Jim. At the beginning of the year, we really started in earnest rethinking how we do advertising as a brand. Over many years, we've had incredible success as a brand, growing same store sales for more than 20 consecutive years.

28:28but we also weren't really advertising in the digital space to that younger consumer and a broader more diverse audience and so we made some small shifts in our advertising spend that's over 200 million a year that we spend we made some adjustments to get more digitally savvy engage new customers and get them ready for the road ahead and bring them in with a much higher frequency than we see from them today so that includes the gen z population a more diverse audience notably a Hispanic consumer, both of which are pretty underserved from Jersey Mike's perspective, but love subs and love the opportunity to come along with us.

29:03Well, that would mean that you have a lot of room for more locations in the country. You put up some pretty bold numbers that I think would really, if you looked at the cadence, give you multiple years of growth, not unlike Wingstop. Absolutely. We have over 3 ,300 stores in our chain today, but we have a lot of runway to go. We estimate over 7 ,500 stores for the U.S. alone, another 7 ,500 for international. We have a pipeline of domestic commitments that's 1 ,600 units strong, of which 1 ,400 of those are already signed and only a couple hundred left in final negotiation. We also have 600 units in our pipeline for international development.

29:43We're getting ready to open in the U.K. So we've got a lot of white space ahead of us, Jim, opening close to 300 stores a year on average over the past few years. We feel very confident in our ability to deliver very predictable unit growth for a long time to come. And how do you feel about average unit volume going forward? Well, right now we're at 1.4 million, which generates about a 40 percent or more cash on cash return for our franchise owners. That's excellent, especially against competitors in our own category. We believe the opportunity is presented for more than two million dollar average unit volumes from stores.

30:18We have a lot of experience above that level. In fact, over 6 percent of our stores are already above 2 million, more than that, over 1.8 million. Our stores can handle that kind of volume. And I think that by continuing to expand our customer base, appealing more broadly to a broader mix of customers than just to those that we've marketed over the years, will create that opportunity for us to achieve$2 million and hopefully beyond. All right. Now, newer viewers may not know, but Charlie taught me and our viewers a great deal about franchising. And one of the things that was at the top of the list for you was you do not give franchises away to people who can't make them work.

30:54Are you continuing with that balance sheet analysis, making sure that your franchisees are are liquid and capable of handling whatever comes their way? Absolutely. We want people who are fully committed to executing the Jersey Mike's model the way we've defined it. The good news here is we have a wonderful group of franchisees that are building restaurants and growing this brand and have for a long time. In fact, that pipeline of over 1 ,600 stores is made up almost more than 90 percent of that is out of existing franchisees. So we don't have to go recruit a whole lot of people to bring them in to grow the Jersey Mike's brand.

31:33Our existing operators are hungry. They readily want to grow and they're enjoying great cash on cash returns. That's why we think that pipeline of growth is not only predictable, but we can easily get to that 7 ,500 stores over time. That's sensational. One last question. You're going more digital marketing. I think that's great, but less than 1 percent to 20 percent. But does that mean we will not see that much Danny DeVito and Eli Manning on ads when we watch football tonight and this weekend? Quite the opposite. You're going to see Danny and Eli back at it again. that friendly competition of who's the spokesperson and who's the football player.

32:09We'll have some fun with that. And we're launching a new product this week, Mike's Hot Italian. It's a product we tested and executed well in the first half of this year. We're going to bring it back for another run. We know it's a fan favorite. And the two of them are going to bring it alive, much as they did before. And so we're really excited for football. We're going to be in the NFL games this year, more so than we ever were before, redeploying our advertising, hitting those targeted areas we want to be in. And the NFL is a great property for us. And the NFL works out. You tell me that Eli Manning can sell subs outside of this New York, New Jersey area.

32:43Oh, yeah. No, I think Eli has a great presence. Danny's anchoring all of this. I mean, he's New Jersey born and bred, but people across the country, around the world, love Danny. We're excited to have those two back this fall. Well, OK. OK, and one of the things I wanted to ask you, we know that Blackstone owns a lot. Are you in contact with them in terms of them cutting down their position? Can we feel good right now that they just want to back Charlie and stick with you? Oh, you know, Blackstone, obviously, we're just a newly public company, but Blackstone certainly appreciates and understands the need for liquidity in the market.

33:18We stay in constant discussion about that over time. And I think certainly over time, you'll see that they recognize what the market wants here, which is an opportunity to continue to build their position over time. Well, I'm so glad you came on. I want people to be in this stock, Charlie. And I'm saying that because initially I was not sure because Troy Aikman was part of your previous outfit and I wasn't so quick to recommend him. Eli, like he's a neighbor of mine. That's Charlie Morrissey, the CEO of Jersey Mike Sub. Charlie, it's so great to have you back on. It really is. Thanks, Jim. I really appreciate it.

33:51It's great to be there. Okay, absolutely. May I be back after the break? Coming up, Kramer's talking to the CEO of Tapestry to figure out how the fashion brand can begin to bounce back next.

34:13What the heck went wrong with the stock of Tapestry? The parent company of Coach, Kate Spade, went to port a little less than a month ago. The company actually delivered a pretty strong set of results. But the stock got obliterated, plunging 16.5 % of single session. Since then, the pain hasn't stopped. It's down 30 % over the past month. Even though Tapestry posted a healthy top and bottom line beat, 28 % earnings worth, driven by incredibly robust results from Coach, well, maybe the forecast was a little bit light. I don't know. I'm trying to figure it out. Let's check in with Joanne Kravassarap.

34:43She is the CEO of Tapestry. to find out. Mr. Basra, will you please help us here? Because I've got to tell you, your investor date financial targets, you did them two years early. The numbers were blowout. Help me understand what's going on with the stock. Well, what I can tell you, I'm not an expert in that department, Jim, but what I can tell you is there are so many good things happening at Tapestry right now. We have, as you said, delivered an outstanding year. We delivered double-digit growth around the world. We acquired 11 million new customers to our brands. We did that at increasing profitability.

35:18You talked about our earnings growth. And the best is yet to come. We're just getting started. This is a muscle that we've built and a growth engine that we've built by design. And we provided an outlook that showed growth on top of the year we just delivered. And we see that well into the future. Well, were there some animals just felt it can't continue as if, you know, the law of large numbers you had done so, so well that maybe people think you can't follow up. Well, what I can tell you is that we see tremendous opportunity going forward. We have redefined our market. And as we've redefined our market, our purpose is to give more people the power to bring their own style and story into the world.

35:58And the operative word in there is more people. Our brands appeal to a broad audience. And that audience, that's our opportunity of people who have the potential to buy our bags. And I'll just throw out one statistic. Did you know that this year, Jim, in the markets we currently serve, 25 million women will turn 18 this year? This year and every year for the next 10 years. And those are people, consumers, who have, we have an opportunity to meet and deliver their first luxury bag purchase. And when we win with that consumer, not only do we win their first luxury bag purchase, we win a customer for life.

36:37And that's a place that we've always played. And it's a place that we continue to show and demonstrate that we can build our business and drive growth into the future. It seems like to me when I read your last conference call that the greatest opportunity is overseas, particularly China, also Europe. There's just a huge number of people with a price point, by the way, that is that is not super premium, but a nice premium price that can be afforded by lots of people. That's exactly right. We see our opportunity both in North America as well as the international markets. And as we talked about during our investor day, over 70 percent of our growth will come from international markets.

37:15And you can see the success and the traction that we're gaining already by developing those brand building capabilities to bring more consumers into our brands. Right. The marketing investments and how to make those investments, the delivery of new experiences in those markets. We're driving double strong double digit growth in China and in Europe. And that's powering our growth. And we have so much opportunity beyond the near term. Now, it's not like you're not discounting. This is the there is just premium pricing. No one is lowering price to promote and get rid of merchandise. This is an extraordinary time for you.

37:54That is that's also a really great point, Jim, because we have been very intentional about what we're building. And we're building again. It starts with this obsession around the consumer. Right. To really understand what they want, where their values are, where the tensions are in their life. and then creating the brand building capabilities to build out our brand world and meet those consumers where they are. And that's a price point, yes, but it's also with the innovation that they desire and the creativity that they desire. And we see the consumer responding, and so we're not trading on price.

38:29We're trading on emotion and value and versatility and meeting the consumers where they are. That's a muscle that we've developed over the last five years and one that we'll continue to exercise going forward. Another muscle you guys have under your stewardship, you return cash. You don't just idly sit there. I know there's been a huge number of shares bought back. It would seem to me, given the fact that I can't find a thing that is necessarily to blame or justify the stock's decline, this is a decent opportunity for a company to be able to stand there, so to speak. Absolutely. We see tapestry as a great investment, and we're putting our money where our mouth is.

39:02We have returned$1.7 billion of cash to our shareholders last year. We see that going forward. We made a commitment at our investor day to return$4 billion worth of cash to our investors. And we are well ahead of that pace right now. And what's really important is when we talk about the earnings growth, the margin expansion that we've delivered while we're delivering incredible top line growth. It's the disciplines of operating our business with real intention. And that's helping us not only drive this new customer acquisition, but doing it in a profitable way that drives tremendous cash flow and optionality for our business.

39:42I want to be sure, last time we saw each other, we did end at a Kate Spade store. I know you can't be satisfied with Kate Spade's numbers, but I also believe that it's a great brand. What's your intention? Oh, Kate Spade is a beautiful story in the making, Jim. We know that Kate is an iconic brand. And I'll give you three reasons why I'm so confident in the potential in this brand. First, last time I was at the stock exchange, I walked out and a customer walked up to me right here and said, let me tell you about my Kate Spade story. I have a Kate Spade bag that I love to wear. It brings me outsized joy.

40:17These are her words. Every time I open the Kisloc at the top and close it, I feel this uplifting feeling, right? Uplifting, outsized joy. is this is a distinctive brand that has a real emotional resonance with consumers. And the second reason I'm confident is we just hired Jonathan Saunders as our new creative director. This is a person who really values and understands the heritage of the brand, but will bring it forward in a modern and relevant way with his understanding of color and pattern. So I'm excited about what he's going to bring to the brand. And last, I'll talk about that store experience.

40:51You know, we got a chance to walk that store. It's beautiful. It's a great store. You know what we hear from young customers? They give us 60 seconds. They'll walk into a store. It'll take them a minute to decide whether they want to stay in that store, whether it's a brand for them. So we know we don't have a lot of time. We're investing in improving that store experience. Yes, the elements of the store, making it feel inviting and warm, but also investing in training and development of our teams with all of this consumer knowledge that we have. We're bringing it forward and making that experience even better so that we can grab her the second she walks in our door.

41:24Excellent. OK, I need to be covered all bases. And I come to the conclusion that I want to be with the company, which is buying. And that's what matters. That is Joanne Cravaserat. She's the CEO of Tapestry. And I've got to tell you, it's very rare that you see this stock this down with the fundamentals of this up. And my perspective. Coming up, you've got questions. Kramer's got the answers. Get charged up for a fast fire lightning round next.

42:00It is time. It's time to go to the Lightroom. Remember, that's where we're off. We're going to let you see what's going on. It's our center. Bye-bye. My social syndrome. The course. My step is where we play this out. And then the Lightroom is over. Are you ready to keep that? Let's go to Eric in Michigan. Eric. Jim, what's going on, man? I miss the days. You used to throw the chairs. I miss it. Well, what do you think about Akrami, man? Give me something on you. Akamai. Akamai, the cybersecurity company, I think is terrific. And by the way, I felt that Cloudflare, that was one of my favorites.

42:33Let's go to Chris in New Hampshire. Chris. Hey, Jim. What do you think of Builders First Source? My travel trust is getting the stuff he's knocked out a little bit by Home Depot. I'm not going to go down the chain and go to Builders First Source. No, thank you. Let's go to Blake in South Dakota. Blake. Hey, Jim. This is Blake. I'm out here in South Dakota. Thanks for having me on. My question for you today is about the outlook on Applied Digital. I know you don't love the stock right now, and I know they've got a lot of debt. I don't. Look, I'm really focused on companies that are making money.

43:04I just think it's worth it. I'm trying to focus on people getting off of margin and getting to situations where companies are making money. And that, ladies and gentlemen, is the Lightning Round! The Lightning Round is sponsored by Charles Schwab. coming up is the ai judgment day coming for us all don't go anywhere kramer will be back with his thoughts next

43:37tomorrow kick off the trading day with swak on the street live from post 9 at the nyse this is some dark stuff we got going on here carl well i mean the Texas station. Maybe we should talk about oil. When you wake up and a guy says we're all going to die and then another guy says, hey, listen, there's really only a 10 % chance we're going to die. I don't feel all that reassured, David. It all starts at 9 a.m. Eastern. Hey, Jim, your mission has been very successful in our family. I listen to your show multiple times a week for investing knowledge. I just want to say thanks. I love your show. Thanks for always looking out for the world back.

44:15A huge thank you for all you've done to make me a better investor. I got to call Kramer because I can't make a move without this guy. I want to make people better investors. If they make money, fantastic. Let's go to work.

44:46When I was a little boy, after we said the Lord's Prayer and the Pledge of Allegiance, we were led over to our cubbies for a duck and cover drill. When the whistle blew, we had to stick our heads in our cubbies and keep them there. The rest of our bodies couldn't fit in, but we were told it was good enough to do the job. And what was the job? Preventing our deaths in the event of nuclear war with the Soviet Union. I was too young and too gullible to realize that sticking my head in a wooden locker wouldn't save my life. There was actually something comforting about it all because the teachers assured us it could make a real difference.

45:17I haven't thought much about that daily duck and cover drill until today. when a man named Jacob Coxon told us we're all going to die from AI. No cubbyhole haven here. Coxon's not some pop-off. He's someone who just resigned from Anthropic. He had some choice tweets about what was going on. Like this one, quote, the people building AI earnestly believe that it could kill us all by the end of the decade. This is not a marketing stunt. End quote. Oh, I said to myself, good. I was afraid they were merchandising death for bigger profits. He said they're gambling with our lives. Soon enough, we got a riposte from a man named Evan Eubinger, also from Anthropic, who wrote, quote, Jacob's correct here.

45:52We really do earnestly believe AI could kill all humans. I personally think it is greater than 10 percent within the next decade. End quote. Maybe a touch of, I don't know, humor. He said that Anthropic's doing its best to prevent the AI apocalypse risk, but they don't yet have the plan to solve the alignment for super intelligence. And they're clearly not on track to get there anytime soon. Ah, 10 percent, much better. Maybe I'll skip a couple of you this time. Now, seriously, maybe more seriously than our teachers in 1959, I did not take a lot of solace in that 10 % figure. Unless you're about to die anyway, doctors don't want to authorize a dangerous surge.

46:27It is just a 95 % chance of success. 90 % is not good enough. I've never been a doomsayer about AI. I think we'll tame it. When I listen to Keserora from Palo Alto Networks or George Kurtz from CrowdStrike, I feel reassured. I also think that we'll get smarter as people. I don't think that we will all end up like the humans and Stephen King's best, the stand when a virus escapes from a secret U.S. lab and kills almost everyone. Although I don't want that book near Claude or OpenAI and don't let them watch Terminator or 2001 either. Nevertheless, I think that these days of ignoring this stuff, they've come and gone.

47:00The casual nature of this mass casualty discussion is way too bloodless. We have to figure out a way to get our heads out of the cubbyholes, even if it's only to slow things down until we have more of an alignment, to quote Evan Ubinger. We never got a chance to learn how many of us would live if the Russians dropped H-bombs on our kindergarten. But at least the Cold War was about ideology. I really don't want to see what happens if AI gets too out of control. Fortunately, it's still early enough for us to do something about it. I like to say there's always a bull market somewhere. I promise I'll find it just for you right here at Man Money.

47:31I'm Jim Cramer. See you tomorrow.

47:43Kramer 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 a 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. When an intruder approaches a home, they expect a camera.

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