Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday June 27.
CEO: Howard Schultz, Starbucks (SBUX)
It isn't easy for many CEOs to balance social conscience with company growth, but Howard Schultz, CEO of Starbucks (SBUX) is a success story on both counts. The company has provided healthcare for every employee even before it was required by law and gives options to people who work for Starbucks 20 hours a week or more. Howard Schultz refers to his own childhood; he was born in the projects to hardworking parents; "I want to show you can start with nothing in America and realize the American dream ... success is best when it is shared. Profitability is shallow if it doesn't have a real purpose." The stores the company has opened in America are strong, while the company is planning expansion into India and China. Even though the company has been on the radar for a long time, "We are still in the first innings," said Schultz. "We are a performance-driven company through the lens of humanity. We want to have a conscience in the way we grow."
The Dow rose 114 points, and Cramer commented that the right attitude, even after the thrashing stocks have taken recently, is that "no one ever made a dime panicking." ConAgra (CAG) reported an excellent quarter and rose $1.69. Just a week ago, CAG represented the kind of bond equivalent stocks that were being sold off. Bed, Bath & Beyond (BBBY) is a retailer some worry about, but it is up 25% for the year. Tech has been strong, as evidenced by Seagate (STX) and Western Digital's (WDC) $2 rise. Some sectors, such as housing, are getting punished; KB Home (KBH) and Winnebago (WGO) closed down in spite of their solid earnings reports. Cramer thinks tech, regional banks and industrials should be strong for the remainder of the year.
Macy's (M) CEO Terry Lundgren discussed why his retailer is unique. Macy's has contact people working in various cities across the country to get an idea of what the local consumer wants and providing for their needs. The company deals with excess inventory by shipping extra merchandise from one location to another, and since Macy's is constantly in touch with what the local consumer wants and needs, this strategy is successful. Lundgren admits the lower income consumer has definitely been affected by the payroll tax, but mid to high end is doing well. He acknowledged Macy's need to improve its offerings in the athletic footwear category, and has teamed up with The Finish Line to make these changes. When asked why he doesn't expand store count aggressively, Lundgren responded, "We're in most of the States. There won't be 100 new stores, but I will continue to open new stores where it makes sense for us."
CEO Interview: Alan Mulally, Ford (F)
Ford (F) is a great comeback story, and may be selling cars this year above pre-recession levels. The stock is up 50% over last year, and its cars are in demand because they focus on fuel efficiency, safety and aesthetics. Growth is strong in most of Ford's markets except Europe, which is improving. Sales have risen 13% for all brands. "There is a tremendous demand going further," said Mulally.
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