In Omaha: Berkshire Hathaway’s 2025 Meeting with Brooks & See’s 5/2/25

0:03Hi, I'm CNBC producer Katie Kramer. We are kicking off a Squawk Pod Report special series, our weekend with Warren Buffett. This is the 52nd annual shareholders meeting. We're coming to you straight from Omaha, Nebraska at the Berkshire Hathaway annual shareholder meeting. They had requests for 138 ,000 tickets by mail. That's the most they've ever received. On this episode, interviews with two of everyone's favorite and sweetest Berkshire Hathaway portfolio companies just before the meeting officially begins. This is the calm before the storm. Brooks running CEO Dan Sheridan. You know, on mile 22 of the marathon, it really matters if your shoe's going to hold up.

0:43And so what's happened over the last 50 years in Southeast Asia is they've become craftsmen. And CEO of Seas Candies, Pat Egan. We're seeing a lot of folks that want to come in and they want joy. They want that pleasure and they want that Seas experience. This special Squawk Pod reports kicking off the Berkshire Hathaway 2025 annual shareholder meeting starts right after this.

1:15They call it Woodstock for capitalists. The Berkshire Hathaway Annual Shareholder Meeting. CNBC's Becky Quick is in Omaha early, setting the scene for her Squawk Box co-anchors, Joe Kernan and Andrew Ross Sorkin at the Nasdaq Market site in Times Square. Good morning. Welcome to Squawk Box right here on CNBC. I'm Andrew Ross Sorkin along with Becky Quick and Joe Kernan. Becky is bringing us a huge lineup, great guests from Omaha. That's happening in just a minute. It is what time there, Becky Quick? Four? An hour earlier, 5 a.m. It's only five. No, it's only an hour earlier. I always think it was a two-hour difference, but still.

1:53Not bad. Is that mountain time? What is that out there? Not quite. Central time. Central and then Colorado. Yeah, Central. I think we're on the edge of Central. We're on the edge of Central. Right. You know, this is the 60th anniversary of Berkshire Hathaway, of Warren Buffett taking over Berkshire Hathaway. And this is the 52nd annual shareholders meeting here in Omaha. It started out really small. This was something where it was just the national indemnity lunchroom and a handful of friends and family members who had been early investors with the Buffett partnership. But boy, has this grown.

2:26This year, in fact, they had requests for 138 ,000 tickets by mail. That's the most they've ever received. It's 10 ,000 more than they got last year. They also got another 6 ,000 tickets that they sold to people who wrote in and requested them. They sell two for$5, and they've always done that as a way to make sure that people aren't taking these shareholder passes and turning around and selling them on eBay for hundreds of dollars or anything. So lots and lots of requests that have come in. Here at the CHI Health Center, there's a capacity of 40 ,000. And last year it was filled to the rafters with even fewer numbers that had come through.

3:00We're anticipating that that's going to be the same story this year as well. And in large part, that's because Warren Buffett hasn't really spoken publicly since the meeting here last year. So there are a lot of people waiting to hear what he has to say on so many things that have happened since then. We've been taking questions from shareholders to get ready for tomorrow's meeting. And we've gotten all the usual suspects, things that you might anticipate. Questions about tariffs, questions about the cash hoard at Berkshire Hathaway, how that's been growing and what he plans to do with it and his thoughts on the markets right now.

3:30Questions about whether there will ever be a Berkshire dividend and all kinds of other surprise questions, too. Again, we're going to be asking those, taking those questions and asking them of Warren Buffett tomorrow when he takes the stage right here at the Chai Center. 830 a.m. Eastern Time. We'll also be broadcasting it live on both CNBC and CNBC.com. Also CNBC Plus, Today on Squawk Box, we've got a lot we're going to be talking about, too. But, guys, the party really kicks off here. And as you mentioned, this is a festival of capitalism. So many things that we're going to be looking at. This is Canyon Ranch.

4:02This place is not. There's a lot of calories that are consumed here. Seize Candies is here. They brought 22 ,407 ,000 pounds of candy. It is expected to sell out. You've got Dairy Queen here as well. And they brought Dilly Bars and Orange Sickles, all of those frozen treats. I think there's 24 ,000 of them. Coke and peanut brittle are kind of the diets du jour, not only in the audience, but also on stage. You'll see Warren Buffett and others eating those things, too. And then you've got squishmallows that are here. And guys, you remember last year we got to jump into the big pit of squishmallows.

4:33There's a huge exhibit that's set up here. Also, there's a book this year, 60 years, as we mentioned, of Berkshire Hathaway. And there's a commemorative book. There's about 5 ,000 of them that will be sold here this time around. Only 20 of these books have been signed personally by Warren Buffett. They've already sold 10 of them and they've raised more than$300 ,000 for charity for it. They're selling another 10 of them here and you can auction for them. So they're going to be raising money for a local charity. What's free, Becky? Like the C's is not free. Yeah, the C's candy is not free. You've got to pay for everything here, man.

5:04This is capitalism. Okay. You'll bring me the small, you know, the little one. I will. I'll buy you some C's. Do you like the lollipops? I usually give you lollipops. Is there something else? Lollipops. I like the vanilla and the lollipop. You can't eat the squishmallows. It sounds like you could. Who makes the, who makes the peanut brittle? There is a C squishmallow. There's a C squishmallow kind of crossover that the two of them have teamed up to do. I think it's the Scotchmallow. You know, the Scotchmallows that they have? Yeah, exactly. Symphony like we do here at Comcast. Who makes the peanut brittle?

5:41Is that C's? Yeah, Mary C. Not personally anymore. OK, yeah, no, that's what I mean. So it's not just those things I'm familiar with. They make the peanut butter brittle, too. And cherry Coke. Yeah, it's really good, by the way. Lots of cherry Coke, lots of Diet Coke. Well, I drink the Diet Coke here. Other people drink the full the full force. And then DQ. I mean, what do you need to say anything about about Dairy Queen? But I mean, you can't go get a big Sunday. Is there a place you could go get a big? OK, it's the orange. No, they hand out just the frozen treats. It's like the orange ones and the Dilly bars.

6:18There's a lot of Dilly bars that are handed out. A lot of bars. Never been. You know, now I'm thinking maybe I don't need to go. Maybe you should. No, it's just now you're really selling it to me. And then you can get the running shoes to try and burn off, you know, maybe a tenth of the cow. Brooks running shoes. I'm looking around. There's a bunch of other places you can go. The Bookworm's here, but there's right behind me is Justin Boots. You can get cowboy boots and cowboy hats over here. Fruit of the Loom is back. They moved everything around this year, so I haven't gotten a chance to walk the whole floor to see where all the stuff is.

6:51Forest River is right behind us, and you can walk through one of their RVs and check out the boat. You've got Clayton Homes right here, and you can check out the Clayton home and walk through it. So lots of stuff. I think you can sign up for Geico insurance, too. But nothing's free. And tens of thousands. What is it? Yes. Tens of thousands. I think it's safe to say 30 ,000 to 40 ,000 easily. I think last year, again, this place seats 40 ,000 and last year it was full to the rafters and they gave away more tickets this year. Now, not everybody who gets that the shareholder ticket will come in because you can take those shareholder tickets and get a discount at the Nebraska Furniture Mart over the next week, I think, with it.

7:28But this place, I'm anticipating some big crowds and we'll get a chance tomorrow morning very early to see. You are like you move up the alphabet to definitely an A-list celebrity out there. It's almost like you're. Oh, Joe, these are our people. They watch. They ask about you. In fact, it started yesterday. I was on a plane that was a special plane that they put in from Newark. You know, United puts the special because usually you can't get direct flights. You have to go through Chicago or something. They had a special direct flight and it was basically a Berkshire bus. Lots of people asked about you guys.

8:01These are our people. They watch Squawk all the time. I don't know what I'd do if I was actually an A-list. In most places, we're even past what the grading system entails, I think. G, H, something like that. But you must be like Margot Robbie or something. I'm trying to think of the biggest current star. Who's the biggest current stars right now? Who would you say? That's a good one. Margot Robbie. Robbie's pretty good. I'm both Margot Robbie. Margarita was a good call. Berkshire has more than 60 companies in its portfolio, and each one comes to this capitalist party ready to dazzle shareholders who come ready to shop.

8:46It's not just the Dilly Bars and the Seize Candy. Everybody lines up and tries to get their specialty Squishmallow dolls. They're going to sell$1 ,000 an hour and they will sell out. I'm sure of that. Brooks running for its part released a special Berkshire Hathaway limited edition sneaker ahead of the meeting. This is something they do every year. You can buy them online for a limited time, or you can wait in line at the Berkshire Hathaway shareholder meeting with the crowds. In a past year, the sneakers had sketched faces of Warren Buffett and longtime Berkshire Hathaway Vice Chairman Charlie Munger right on the back of the shoe.

9:19This year, 2025, they went neutral. Our Becky Quick sat down with Brooks Running CEO Dan Sheridan. Sneaker maker Brooks Running has been a Berkshire Hathaway subsidiary since the year 2011. And joining us right now to weigh in on the brand's growth, manufacturing, the impact of tariff policy and much more is Brooks running CEO Dan Sheridan. Dan, thanks a lot for being here today. Good morning, Becky. Thanks for having me. You guys just this morning put out some really strong numbers for the first quarter showing the growth that you've seen. And I have to say it's really impressive just looking at some of these things.

9:52The 15 % year-over-year global revenue growth, leading performance-run brand continued for eight consecutive years in North America, up 13 % in the first quarter in revenue, 38 % year-over-year growth in Canada. And that's fantastic. You guys have been putting up really great numbers. But that was all for the first three months of the year. And then a few days later, we had Liberation Day. And that's a big deal for you guys because you do most of your manufacturing in Vietnam. So what's the story? What's the impact from tariffs? What are you guys doing about it? Yeah, super proud of the results of the team.

10:24You know, this has been a journey for Brooks over 20 years. We're the leader in performance run now. And the storyline for us is that we're growing across the globe. Every region was double-digit growth. Our EMEA group, record high for the quarter. Our North America business, as you mentioned, eighth straight year of growth in North America. And it's rooted in the participation rates of health and wellness around the world. Yeah, and that got a big boost in COVID when people were working from home, had more time to run at home and really got back into this idea of running as a lifestyle. But what do tariffs do to your business?

10:59How do you handle that? Yeah, I mean, like every business, the uncertainty of tariffs is what we're trying to figure out right now. You know, we're somewhat fortunate because most of our products are manufactured in Vietnam and Indonesia. So we already had high tariffs coming out of those countries, 20 percent tariffs. So this additional 10 is, you know, it's a problem for us, but we're mitigating it not just on the tariff increase, but really trying to look at the full value chain of Brooks and addressing supply chains. Meaning putting pressure on your suppliers to try and get prices down? It's not pressure.

11:33We're working directly with them. I bet they feel like it's pressure. Yeah, yeah, yeah. But, you know, I think this is a full value chain solve. It's not one part of the supply chain that we have to go after. So, you know, price increases. We're trying to be smart, be market right. We don't want to penalize the consumer with this. So we're really trying to approach it holistically. And the other thing is the uncertainty. We don't know where they're going to go. So it's really challenging for businesses. Where who's going to go? Where the tariffs are going to go. Okay. Right? So, you know, we were whiplashed in the last 30 days on it.

12:08And the uncertainty for us is, you know, is this additional 10 % going to stay in place? Could it come off? Could it be higher? So we're trying to be measured in how we do it. But it's a challenge for us. Have you changed your perspective just in terms of where you might do some of your manufacturing as a result? Yeah, I mean, you know, making a running shoe is very, very hard. We talk about it in terms of fit, feel, ride for the runner. You know, on mile 22 of the marathon, it really matters if your shoe's going to hold up. And so what's happened over the last 50 years in Southeast Asia is they've become craftsmen of performance running shoes.

12:46And so to move that supply chain instantly is just not reality for us. So we're working hard on it. There's automation that's coming. We're talking about domestic manufacturing. But that's a five, seven, ten-year process. It's not an immediate thing that we can fix. Ten years even? Yeah, because if you think about it, all of the material vendors for performance shoes are based in Southeast Asia. So you've got a supply chain that's deep into the countries there. And so moving all of that will be really challenging for us. But we've been working on it for a couple of years and we're making some progress.

13:18You guys have really pushed international growth. When we were here with you last year, you were talking about opening up in China and you had your first stores that opened there. You've seen sales that have been taking place there. It seems like you're doing a really great job with moving some of those things. But I wonder, is there tension that's been brought in by the U.S.-China in particular? Is there nationalism you see there? Is there a pushback against American brands or not? Yeah, I mean, our growth in China is pretty impressive. We were up almost 200 percent in the first quarter, and it's rooted in the participation over there.

13:50We have a stat that in 2020, there were 40 marathons in China. At the end of 24, there was over 400 marathons in China. So growth of running is what's driving it over there. And look, the uncertainty of the trade war is, you know, concerning to us. But what we know about Brooks and the sport of run is when participation grows, we have a chance to compete and win over there, and we're doing that. Yeah, and you've done it very well. I don't know if it's the technology that's in the shoe, if it's that you have some of the world's top athletes that are setting new records in these shoes. What do you think's been driving?

14:22I mean, we're a company that is a product company first. And so we spend a lot of time on the biomechanics of human motion, how you build shoes for runners specifically. And what we've been able to do is do that consistently over a 20-year period. The thing about runners is once they find their shoe, they rarely switch because it's such an important part of their life. And Brooks has been able to do that consistently. Dan, I want to thank you for joining us this morning. Dan Sheridan. Thanks, Becky. Great to see you.

14:54Next up on this special Squawk Pod reports, another favorite, an interview with Seize Candies CEO Pat Egan. How sweet it is to be backed by Warren Buffett. We've been around for 105 years. Our consumers love us. Our consumers know us very well, but we also know our consumers are feeling the pressures.

15:18Welcome back to this special Squawk Pod Reports. We are kicking off the 2025 Berkshire Hathaway Annual Shareholder Meeting in Omaha, Nebraska, with one of Berkshire's portfolio companies, Seize Candies. We're here at the Seize Candy booth on the exhibition floor, where more than 24 ,000 pounds of candy await the Berkshire Hathaway shareholders who are going to be descending on this place. It does get a little violent. There is some shoving and pushing that comes because people are here and eager to grab these boxes. We're joined right now by Pat Egan. He is the CEO of Seize Candy. And, Pat, it's great to see you.

15:51This is more candy than you've ever brought. This is more candy than we've ever brought. Welcome to Camp Berkshire Hathaway, Seize Division here. Yes. The camp theme is because of these toasted marshmallow scotch mellows, which was a promotion. Well, so the camp theme comes from Berkshire Hathaway. And so we happen to be developing a toasted marshmallow piece because we've kind of had it in our queue for a while. And we had a collaboration with Kylie Jenner late last year, early this year, that worked out perfectly because it's a camp theme. And what better than toasted marshmallows? Yeah, it sounds pretty good.

16:22Definitely getting into the idea of this. Hey, you have a really good idea of what's happening with consumers. Yes. Because you don't have to buy candy, but people love it and have been buying for a while. What are you seeing with the consumer right now? Well, we've seen a few things. I mean, obviously, we've been around for 105 years. Our consumers love us. Our consumers know us very well. But we also know our consumers are feeling the pressures that everybody else is. You see that. Yeah, I do. And we do. And one of the beautiful things is we have our 250 year-round shops that we operate. So we get direct feedback daily in terms of not just the sales, but what we're actually hearing from our customers.

16:53We listen very closely to that. We also have licensee partners. We do sell to some grocers and others. And so we're constantly getting a lot of different feedback. And what are they telling you right now? They're telling us the same thing. Well, actually, what our numbers say is we actually had a great start to the year. Valentine's was up significantly. Easter was up very well. And then we've seen a little bit of cooling in the last month or so, but not cooling below where we've been in the last year or so. So we're actually meeting our numbers. We're looking good. But the growth has slowed. And what do you think?

17:20Is that uncertainty in the markets that leads to that, people watching their stock? I don't think it's any different than what you're seeing in the other numbers. I looked at McDonald's yesterday as an example, which is in that range. But, no, we're seeing a lot of folks that want to come in, and they want joy. They want that pleasure and they want that C's experience, which is why every time you come into a C shop, what kind of service we give you matters a lot to us. So you've been at this for over 100 years. You've seen a lot of ups and downs. What do you do if things slow down? Do you offer smaller packages, like lower price points for things?

17:51A couple of things for us. So in our production process, we don't add preservatives. So our turn times are very tight. So we're constantly monitoring what's going on with our consumer. with our consumer. So if we're going up, we're leveraging up production. If they're going down, we're going the other direction. So we've gone through our major holidays at the front end of the year, Valentine's and Easter, now Mother's Day, which is coming right up. And so we've actually had a great amount of volume. Now we get into the summer where we have campaigns like Lollipalooza in July and Doggist in August.

18:20And then next month is actually National Candy Month. So we're going to have daily messages that go out. And what we know is when we communicate, when we market, and when we innovate with new boxes and that kind of thing, our customers respond. They definitely want that SEAS experience, and they're going to come back in. Last year when we talked to you, the big issue was commodity prices, cocoa prices skyrocketing because 70 % of cocoa comes from West Africa. They have had some issues with weather and drought that have impacted their take. Where do things stand right now for your commodities, your input prices?

18:51Yeah, so chocolate, cocoa that you just mentioned, so that's swinging about$1 ,000 a month per metric ton. Wow. Yes, it's significantly. And what's just odd to me about it is for about 20 years, it was very solid and very steady between$2 ,000 and$2 ,500. And then last year, it's skyrocketed to about$12 ,000. So it's back down to$7 ,500 right now. But the point of that is our costs for cocoa have about tripled. So we buy on the forward market. We've been able to manage it. Our CFO and our team does a great job with that. But it's definitely impacted us like everybody else in confection. Pat, I want to thank you for your time.

19:24We really appreciate it. Absolutely. Always great to see you, Becky. Great to see you too, Pat. Enjoy some here.

19:31This is just the beginning of our Squawk Pod reports coverage of the 2025 Berkshire Hathaway annual meeting. Make sure you hit that follow button so you're notified every time we publish more from Omaha. We have so much more content coming your way this weekend. Like the meeting itself, right on your feed, and classic episodes remembering Berkshire Hathaway Vice Chair Charlie Munger and his legacy, and a lot more. Also, you can see video clips, find transcripts, and lots of information on CNBC's Buffett archive online. Go to buffett.cnbc.com. Squawk Pod is our daily podcast featuring the best moments and guest interviews from the Squawk Box Morning Show.

20:08Plus a little extra, like trips to Omaha. Keep tuning in.