Mad Money w/ Jim Cramer 3/6/25
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I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now.

Hey, I'm Kramer. Welcome to Bad Money. Welcome to Kramerica. I'll be your friends. I'm just trying to save a little money. My job is to put it in context, but also explain and entertain. So call me at 1-800-743-CBC. Tweet me, Jim Kramer. This Clubber Lang thing, it ain't working. Don't know Clubber Lang? Go watch Rocky III, Best of the Rockies. When Clubber Lang played with Panache, but Mr. T is asked his prediction for the big fight against Rocky, he infamously says, prediction? Prediction?

Ladies and gentlemen, President Trump has put himself in the awkward position of predicting pain. And he's delivering it to owners of stocks in a way that doesn't have to happen. We don't need to have days like today where the Dow drops 428 points, S&P plunges 1.78%, and then as that plummets 2.61%, putting that index down 10% from its 52-week high. Now it's getting worrisome.

First, let me say, I'm not going to quibble with the president's ultimate goals. He ran on cracking down on illegal immigration and fentanyl traffickers. He ran on closing our trade deficits. Now he's in office. He gets to set the agenda. He's doing exactly what he said he would do, what people voted for.

But, man, I think there are much better ways to go about doing what he's doing. He can implement his agenda without destroying investor confidence and causing the stock market to roll over. So I'd rather offer my plan now rather than wait until all the averages are down 10 percent like the Nasdaq, at which point it would already be too late. Will any of my ideas be cogent and actually adopted? I don't know. I've only advised one president. He loved my idea over Diet Coke, but nothing ever happened.

As a rule, people in the White House only care about what I have to say when things get real, real bad, like when COVID-19 shut down the entire economy in 2020. But that doesn't matter. In Rocky III, Mr. T, a.k.a. Clubber Lang, ultimately ended up flat on the canvas. His prediction didn't come true. Yet the pain's already coming true here for anyone who owns stock. Today was horrendous and, again, unnecessary. We do not need to end up on the canvas every day like this. First part.

We have zero clarity and maximum uncertainty. Business is going to slow down. Hiring in the USA will get crushed if we don't get some clarity here. Tomorrow, I think we have a weak non-farm payroll report, first of many soft numbers. And we don't get rid of this surprise factor stuff. Remember, most businesses hate the tariffs, but what really terrifies them is that they have no idea what's coming next.

Second, the president's threatening to roll out more tariffs. The staged tariff schedule is creating a huge amount of uncertainty. If the president already knows what countries he's going to hit and what products will be made more expensive, perhaps German, Japanese, Korean cars, there will be more pain, but it can be planned for. Tell us now. This is a mess. The president should go on Truth Social, though, and do this. Show all the tariffs that these target countries have against us. They do not have clean hands. We need our citizens to know what our trading partners are really up to.

They have systematically discriminated against us. They protect and subsidize their own industries, while we just have to sit there and take it. So show it to us. Tell us. Don't make us try to figure out who's next. Explain why we're simply going tit for tat because people don't understand why this is necessary. Third, the president has sowed enough fear that almost every company that reports during this period is giving a cautious forecast and is totally out of keeping with how well they're doing. Nobody wants to come out and say,

Hey, it's too crazy out there. The president's seen the problem. Trump has said there will be pain. So now you think, why should you stick your neck out if you run, say, a major retailer like Macy's and predict you could have a great spring? So even though Macy's did have a terrific winter, they got it so negatively, people sold the stock. Negativity is pervasive throughout this entire economy, and it comes from the top.

Again, this is unnecessary. Trump can accomplish his agenda without doing this much damage. Remember, investing is a good thing for our country. Our stock market is now falling way behind Spain, Italy, France, Germany, more on that later. These foreign markets seem like more certain and welcoming places to put money in. No mandated negativity, no sense of everyday lower prices for stocks, the Walmart style of governing. They're taking our investing dollars for certain, and I can't blame anyone for moving their money.

Fourth, if we want the consumer who has enough money to keep spending, we need to maintain some degree of wealth effect. It's not a subsidy. It's capitalism.

I think the consumer is baffled by the president's tariff policy. People are confused about why, for example, the president's treating Canada as a scoffle on fentanyl when it's obviously a Mexican problem. If Chinese steel is coming through Canada and punish them, you include Mexico. But Mexico and Canada present very different problems, and that's insane. They're being treated the same. People know that stuff, right? Fifth, nobody wants to be a sucker.

The president knows that. We don't want to feel like doofuses for putting money in the stock market. Saving is a good thing. We want people to save. But right now, it's not worth it. The real winners at this Red Hot Minute are all short sellers.

No one will want to come public in this kind of environment. IPOs, no. No one will want to merge. Everything's frozen because everyone's too scared, suboptimal. Sixth and final, when we get the employment number tomorrow and it shows a lot of layoffs, we do not fear a preface of job losses stemming from the federal layoffs. We get that part of the president. That's his plan. You don't have Chainsaw Musk in there for nothing, although it might be for nothing if we get that more Supreme Court rulings rolling back these firings.

But confidence gets sapped on days like today. Anyone who hires right now feels like a dope if their stock keeps going down. There's not enough confidence to hire. That's in large part because we don't know what's going to happen next other than it could be real bad. Look, if the market's going to go down, so be it.

If a company reports a series of bad numbers, ones that are well below forecast, it should get the clubber-lying treatment. If the vast majority of important companies, large, vital companies perform poorly, then their stocks should go down. The market should go down. However, that's not the case. Instead, companies are reporting terrific sales and earnings, but then they've given all these downbeat forecasts pain because why? Well, they're confused. They're doing it because they think it's only going to get worse before it gets better because that's what the president's telling us. That's what he's telling us. Excuse me.

Why don't you give us an upbeat forecast? Consumer confidence is so negative we can't. You'll get crushed because what's really happening is your price earnings multiples are shrinking because we sense a mandate for lower prices. So why not just sell? And the mandate, it's not coming from Wall Street. It's coming from the White House. I say let poorly performing companies see their stocks go just five feet down. Let the prediction for them be pain. But the good ones, here's the bottom line. I'm not saying this should only be pleasure. That's wrong.

I'm saying that the shareholders of great companies shouldn't have to play the fool. And people need to know it's still worth investing. There's no reason you have to be stupid to buy stocks. But you sure feel like a dope if you bought today, don't you? You feel like a dope if you bought any day since the inauguration.

Wall Street hates uncertainty. And until we get some clarity from this administration, it's going to be tough to advise people to buy anything, even the best companies, because pessimism is the only path investors seem to know. Robert in Jersey. Robert. Yes. How are you, Jim? First time caller. All right, Robert. Thank you.

Love the show. My question is U.S. Steel. With everything that's going on, what do you think about investing in U.S. Steel? Now, if you're going to own a steel company, you have to own the best. We're best of best people in this. We are best of breed people in this. And that is Nucor. At $131, I think it's a great buy. That's the one I want you to buy, and I will always want you to buy. John in North Carolina. John. Good afternoon. How are you? I am good. How about you, sir? Just fine. Got a question? All right.

I'm taking your advice and put a little bit of cash aside to play with in case something comes up. And a couple of weeks ago, I bought some Eli Lilly and it's taken a pretty good jump. Do I cash it out or do I let it ride? You don't sell Lilly. Lilly's got the solution that may be good for everything from Alzheimer's to heart disease to kidney failure to liver problems. And right now, weight and diabetes and that at GOP-1. And Lilly's got the big lead. David Ricks is a visionary. We stay long that stock. Wall Street hates unknowns.

And until we get some certainty from the administration, even if ultimately they're doing the right thing, we ain't going anywhere here. And my prediction will be the House of A. We have money tonight. It's a volatile market. Tonight, I'm sitting down with one of the top investing minds, top minds, Ken Langone.

You got to listen to him. Then Cracker Barrel's story after earnings up a whopping 7.5% of its report. Could the company's turnaround continue to look appetizing to this market? I'm talking to the CEO. And the parent company by Gap, the non-Republican Old Navy, just reported after the bell, and it looks spectacular. And we got the CEO exclusively. So stay with Kramer.

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

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In a tricky moment for the market, it's worth turning to a seasoned investor who's seen it all. Someone like Ken Langone, the founder, chairman, CEO of Invermed Associates, as well as being co-founder of Home Depot. Now, if you're from New York, you know him as the chief beneficiary of NYU's Langone Hospital System. Thank you, Ken. I was there today. Now, he's a true titan of industry. I know him as the most loving, wise and charitable person I have ever met.

ever met. And I've been around for a long time, too. So let's get some perspective on this choppy start to 2025 with the legendary Ken Langone. Ken, welcome back to VanBuddy.

Jimmy, thanks for having me. I'm honored to be asked, and I look forward to spending some time with you. Well, I have to tell you I need your help, Ken. I worry. I worry that things have gotten a little rancorous. I worry that things might be going off the rails, or maybe I just need to be a little more open-minded and adjust. But maybe you can help me and help our viewers. Well, Jimmy, I have a very strong fundamental belief that America is the greatest place on Earth and that from time to time we tend to mess with it too much.

But overall, Jimmy, we're going to be fine. We've got a wonderful country. We've got resources. I must tell you, I'm mighty impressed with the president's first 50 days in office. I think he's tackled some pretty challenging situations. His style is different than mine would be. But guess what?

His style got him elected. I mean, the thing I marvel at about this man, the energy level he's got and what he went through for the past four years. I don't know who could have done it. I've been known to have a high level of energy. I don't think I could have lasted a month. So, and I think Jimmy, the thing that I think you should get more credit for, he's big hearted. That little boy the other night, what a wonderful gesture. What a wonderful thing to do. Uh,

the families, you know, I can go on and on and on. However, our politics in America today, in my opinion, are much, much too centered without regard to the other side's argument. There's too much gotcha mentality. And because I am an enrolled Republican and an loyal Republican and an enthusiastic Republican, I must tell you I found the behavior

of the Democratic Party at the presidential State of the Union speech, I found it tragic. And I think it doesn't represent the best of America. And I'm sure most of those people who were there that night are nothing like they projected. But to the rest of the world, when they look in and see us, this is America. This is a leader of the--this is a country that's a leader of the world. So we didn't do ourselves any good. So, you know,

I don't know how we end that. But I do believe. Go ahead. You sound pretty sanguine. Now, we have a lot of investors watching who think that, wait a second, he says there's going to be pain. We have to do the tariff thing. Why can't it be a little more like President Reagan? Which, you know, I thought President Reagan had an unbelievable attitude toward economics. I don't see that. But maybe you can't do that. Be like President Reagan these days.

I love Reagan. I love. No, but I'm saying Reagan did not like tariffs. And he did not like tariffs. Jimmy, let me say this to you about the tariffs. OK. America, thank God, bless our heart. Right after World War Two, we started something called a Marshall Plan. And we purposely gave Japan and Germany who are on their butts the edge to get them on their feet.

Why is it today--and by the way, the irony of it is the Germans sell a lot more cars in America than America sells in Germany. Our cars relative to their cars are less fuel efficient. They're bigger. They don't lend themselves to any part of Europe. You know how narrow some of the streets can be. You notice the cars that are all on the smaller side.

But here we are, I think tariffs that we charge on German cars into America are 2.5%, and the tariff they charge on our cars is 10%. Now, I tell you why I think it's foolish. The Germans sell so many more cars in America than the Americans sell in Germany. If I was Germany, I'd say, wait a minute, if I make the playing field level in terms of the tariff, I still have this tremendous economic edge.

Every car I've got right now downstairs in my garage here in Florida, every car, with the exception of this antique Cadillac I have, are foreign made. Every one of them. Well, I mean, it is not fair. Both Japan and Germany rip us off. And I wish that, I hope when the president goes after them. I wouldn't go far to say rip us off. I say we've allowed that to happen. Right. That's harsh. That's harsh.

Over time, Jimmy, over time, this thing will tend to level out and normalize. Right now, I'll give you an example of what Trump's negotiating skills are. We should go into Gaza and take over Gaza. That got the whole Middle East riled up. So guess what happened? They're now throwing chips on the table and said, we'll do this. He's out of the picture now because you know what? He got the game started.

And now he's saying to them, well, if you don't like what I suggest, then what are you going to do? And now they're doing it. They're talking about doing something. Whether they do it or not, I don't know. Well, let me go full circle. Let me go full circle with you, Ken, because, you know, it sounds like to me, let's say there's short term pain in the stock market. It sounds like to me that you would say just stick with it, that things are things are going to be fine and things could actually be better than fine. Jimmy, brokers could not make a living if they had my account.

Why? I own my Eli Lilly 47 years. I own my Home Depot 48 years. I own my J.P. Morgan stock, effectively, 17 years. I own my Parker Hannifin 15 years. The magic for me is if you don't have stocks on margin,

And you've got solid companies with great managements, with good balance sheets. You're right. It may be stormy. I don't like to see J.P. Morgan at 280 a month two weeks ago and now down to 245. I don't like it. But on the other hand, how about J.P. Morgan at 42 when I got in and where it is today? Better than that is Eli Lilly. You told us it would double. You told us it would double. It's more than double. You told us it's going to be a trillion dollars. That's unbelievable.

And guess what, Jimmy? I think it's going to double again. What they've got, what they have got, that drug, Monjano and Leftbound, Jimmy, they're miracle drugs. They're looking at opportunities away from obesity, away from diabetes. And the pipeline they've got of other drugs away from these drugs. But, you know, Jimmy, you probably know this, and I'm not sure it's right, but I bet it is.

If you own a stock and you're out of that stock eight certain days in a year,

Missing those eight days, you've lost 90% of the play in the stock that year. Now, frankly, I'm not smart enough to know which eight days there are, so I stay for the whole ride. That's Peter Lynch. I get it. Peter Lynch said it's 10 days. He said it's 10 days. You trade in and out. No, but I'm saying if you trade in and out, how wrong is that, Ken? We have to keep people in. Our job is to say Home Depot, Ted Decker, he's doing as good as Frank Blake. You've got to be in the stock. It's fabulous, right?

Yes, and more importantly, the economics of Home Depot. Seventy percent of Home Depot's business is MRO, maintenance, repair, and operations. The other 30 percent is a new dormer, a new room, or a new home. The thing I love about Home Depot is

you become more sensitive to things around your home in bad times because if you've got a leaky window and you pay more for energy because the hot air is going out the window. What I'm saying, Jimmy, is I'm not smart enough to know timing. I know people. There are people. I'll give you a for instance. Stan Druckenmiller has a nose for timing like nothing I've ever seen in my life. And I've invested with Stan now for more than 40 years. But Stan's a good example.

I met Stan when he was in his late 20s, and I knew then this kid had it. And I've invested with him. He's now 71. I don't know what 71 is. My God, the record he's accomplished is unbelievable. Stan has a knack for avoiding loss.

He's very, very averse to loss. And when you think about the math, Jimmy, I buy a stock at 100. I sell it at 50. To get back to my 100, I got to find a stock that doubles. There aren't many stocks that double. So if you can take the risk of loss away or minimize it, you got a much better chance to do what stands. It's one of a kind. But he would still say that great American companies can be owned through this period, correct? Yeah, but...

I give Stan a lot of credit. Stan is... Well, he's never had a lost year. He's never had a lost year. He's amazing. No, no, no. I've invested with him for over 40 years. I can tell you, he's never lost money in one year. It's amazing. If he lost it, he didn't lose it. It's unbelievable. But I want to bring it back to you, Ken. I want to bring it back to you. You sound as optimistic as always. I wanted you on the show for many reasons, not just because I love you and you know that, but because...

But because we need your perspective, and the perspective is be calm. It's good. Is that a fair analysis? Yeah. Not only that, Jimmy, we live in the greatest country on Earth. We have enormous needs in America that generate significant economic activity. My opening, my sole focus after I decide that the industry in which the company is participating is

has a positive future, I spend all my time getting to know the management. Example, Kmart was a behemoth when Walmart had four stores in Bentonville, Arkansas. Kmart is gone. Walmart is the biggest corporation by sales in the world today. Sears Roebuck, hell, that was a big thing for me to go to Sears Roebuck on a Saturday afternoon. Sears Roebuck was king of the mountain.

See, again, Sam, what was the difference? The people. Well, the lesson there is that we want to be with great companies run by great people who have a vision. And now I'm going to have to leave you, Ken. I hope I see you in person soon. I miss you. Jimmy, I'd love to see you. And by the way, Jimmy, tell your wife I'm grateful for all the work she's doing for Bucknell. And I'm especially grateful to you, Jimmy, for showing up every once in a while and talking to the kids. It means a lot to them and it means a lot to me. Have a nice day, everybody.

Don't sell America short, Jimmy, please. Thank you for coming on, Ken. It is so meaningful for everybody. And to my wife, I'm going to call right now. Thank you, Ken. That's Ken Langone, chairman of Infinite Associates. And he's so much more. And he's just an amazing person. Mad money's back in. Coming up, an old country chain going after a new look. Can Cracker Barrel serve hungry investors? Stick with Kramer.

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Look at the stock of Cracker Barrel run, even on a tough day. I've been recommending this stock as a turnaround play since last summer. And after a volatile stretch, the company just reported a tremendous quarter. A clean top and bottom line beat, with management raising the four-year forecast, not cutting like so many others. Hence why the stock jumped 7.57 today. That's a huge gain and a bad day.

That said, the stock's still down over 33 percent from its January highs. So could this be the buying opportunity now that the turnaround has arrived? Let's check in with Julie Messina. She's the president and CEO of Cracker Barrel, all kinds of stores to find out. Julie Messina, welcome back to Bad Buddy. Thanks for having me, Jim. It's great to be here. Well, it's happening, Julie. The turnaround's happening, as you predicted. And I want to give you the floor to ask you how you got these unbelievable numbers.

Oh, gosh, you're so kind. But honestly, it's all the great hard work by the team. They are working so hard every day to execute in the moment, take care of the guests who are in our store, as well as execute the turnaround. So Q2 is a really important quarter for us. It's seasonally high volumes, and they just did a great job. So huge, huge thank you to them. And we're so pleased.

two quarters behind us into this year, and we're able to raise guidance. So it feels good. It is amazing. Now, you are a very rigorous person. You have this transformation framework in your deck. And I just want to check some of these off because I think they're really relevant. You're refining the brand and enhancing the menu without alienating the people who've always loved Cracker Barrel, but you're bringing new people in. How have you been able to make that change?

Yeah, you know, it's so important. You and I have talked about this, I think, when we first launched the transformation agenda. It's so important to us at Cracker Barrel that we continue to love on the guests who love us. And all we're trying to do is really open that aperture a little bit wider and invite even more people into this wonderful brand. So it's really taking care of the people who already love us and inviting a few more people in. At the same time, you have kept that price point. It's very reasonable. And what I love, by the way, you sell a lot of eggs.

You have a lot of eggs in your dishes, but you didn't raise price because you figured out how to handle the supply chain. How did you do that when everyone else is screwed up?

Well, a huge shout out to our supply chain and our vendor partners because they've done a great job. We're contracted through the end of our fiscal year and even into next. And so we said, gosh, let's take care of our guests during this time as well. Let's let them know that we've got them. We know value is so important to our guests. It's a really important tenet of what we do here at Cracker Barrel. And to be able to give double pegs on eggs to our loyalty members for two weeks was really just something fun to let our guests know that we've got them.

Let's talk about that loyalty program. And there are situations where people are saving so much more than I've heard on a typical loyalty program. You've been giving away some stuff. I mean, big.

Yeah, I mean, look, we are about value here at Cracker Barrel. We want to make sure that people know that we've got them. You and I have talked about everyday dinner deals. We've talked about sunrise pancake. But loyalty is an amazing way that we deliver value to our guests. We let them earn on both sides of the business. They can earn pegs on both retail and restaurant, and they can redeem them on either side. And we're really having fun learning what motivates them.

really digging in and seeing if it's retail items that motivate them more in restaurant or vice versa. Is it discounts? Is it, you know, more pegs? And so we're just really continuing to test and learn our way through what's motivating to these loyal guests. And we love them for it. And it's just been a really fun way to reward them and grow the business. OK, with this forecast, I'm going to bounce something off. You can tell me if it doesn't work, but I

thinking you will go very big in the idea that people worry they have confidence issues. Things are a little crazy out there. Somehow, Cracker Barrel may be the refuge from the craziness.

I love it. Sure, I'll take it. But really, we started off with a rough February, like everybody. The weather was not kind. I mean, Jim, we had stores closed in Louisiana where it never snows. So, you know, we experienced what everybody else did. But the last two weeks, you know, we're five weeks into this quarter for us. The last two weeks have seen really positive improvement, and we're excited about that. So the improvement that we're seeing, coupled with our strong plans, you know, we are –

We've said this is an investment year. We've got a lot of things coming together. We have a great Q4. So we believe even with what's happening out there right now, that we're able to really raise our guidance and deliver a great year for our shareholders. I don't mean to be too narrow, but you talked about how people might like pot roast when I saw you last time. It worked. How did you know that they love pot roast?

You know, that's really what we're doing with our menu innovation pipeline. We talked about finding things that are uniquely Cracker Barrel and that are comforting and delicious. And our guests really love abundant, delicious home-cooked food at a great price point. And that's what we're continuing to do. You've got to check out our new menu items that we just launched a couple weeks ago. We've got a Louisiana shrimp skillet. We've got a shrimp and grits skillet. We've got

pancake innovation, just things that people love that are executed so well by our great team and served with our wonderful country hospitality. So we've got lots more coming. I'm so excited about the innovation pipeline. The team continues to do a great job there. Melissa, I want to ask you, you had some places that you thought that you really go drilling down trying to do new stuff. How is that going? Some of the new, you know, the kind of like things that you never see anymore where you're actually experimenting with particular stores. Is it working?

Yeah, I mean, not only is it working, but we're learning, right? So not everything is going to be a home run, but that's okay. Because what I keep telling the team is we've got to test, we've got to learn, we've got to keep improving and keep raising the bar. And that's really what this test and learn is all about. So thinking about our remodels, try to figure out what really makes people excited to come into a Cracker Barrel. Is it the lighting? Is it the seating? Is it the food? Is it the paint? And so we keep really just testing and learning our way into all of these things. We've got a new format for

that we're playing with right now that we're excited to launch in a couple of weeks. So lots of lots of fun stuff. Well, you are exciting to listen to. And I'm so proud of you came in and I was worried because the brand is storied, but was a little run down and you're fixing it one day at a time. I got to tell you, Julie, you're terrific. That's Julie Messina, president, CEO of Cracker Barrel. Congratulations.

It's really the team, Jim. Thanks so much for having us on. We're working hard to take care of our guests and take care of each other. It's the team, but you're the captain, and we salute the captain. Thank you so much. Everybody's back in.

Can you believe this incredible, stunning quarter from the gap? When the parent company of Gap, Banana Republic and Old Navy reported after the close, it delivered a gigantic earnings beat. Higher than expected revenue, huge same-store sales wealth. Much better than what Wall Street was looking for, plus an impressive full-year forecast. No wonder the stock soared in the after-hours trading. Can it keep climbing? Well, it was a ridiculous fall to begin with. But let's dig deep with Richard Dixon. He's the turnaround artist, president, and CEO of The Gap. To learn more about the quarter and what's next, Richard Dixon, welcome back to Mad Money.

Jim, good to see you. Thank you for having me. What can I say? You came on the show. You predicted you could do certain things. Not only are you way ahead in terms of schedule, but the fact is these numbers are just outstanding. How were you able to deliver comp store sales? 7% gap. We were looking for nothing like that. Old Navy three. We're looking at half of that. Banana Republic, as you predicted, Banana Republic has turned already. How did you do this?

Well, first of all, it is not a one-man show. As you know, we have an extraordinary team that perseveres every day to drive results. The quarter was, as you're acknowledging, it was an exceptional quarter. I mean, we delivered another quarter that exceeded financial expectations. Sales comp up 3% for the quarter. This is the fourth consecutive quarter of positive comps.

We also gained market share for the eighth consecutive quarter. And this is really indicating that our brands are resonating. We're gaining traction. The progress is real.

And Jim, as you know, this year has been a difficult year. But all four brands, every one of our brands gaining market share, I mean, that's demonstrating strength in the industry. And this is against a backdrop of a declining apparel industry. So even more encouragement that our teams are executing with excellence and we are on our way to continuous improvement. At the same time, because we've got great shareholders out there, amazing dividend and a backsliding.

balance sheet that you started with that is now in rock solid, probably the best in the industry. I mean, I don't know how that happened. You must have very few problems with, say, even even tariffs.

Look, it's not a magic trick, obviously. We've been working really hard. $2.6 billion in cash. We've got, obviously, free cash flow now at $1 billion for the year. I mean, it was really a successful year. We're well positioned for the future. And look, as we look at tariffs,

It is something that we're monitoring developments around very closely, as we all are. It is important to note, we source less than 10% of our product from China. We have less than 1% of our product from Canada and Mexico. And that's, by the way, combined. And as we've shared our guidance today, it contemplates what we know today regarding tariffs.

Over the last several years, we've been strengthening our supply chain. We'll continue to diversify and ultimately just really stay focused on creating the right product at the right time, at the right place.

And no matter what, minimize the impact to the consumer. So we're going to be working hard to continue the momentum that we have. Tariffs, cost inputs, these are all the day-to-day of doing business. And it's our job to just deliver the best product at the best time, at the best quality, at the best price. I want to tell you that people before you, there was never a sense that Gap had immediacy. All we're talking about in our office is White Lotus. And then suddenly we see you're tied in with White Lotus. And apparently it's doing great.

Yeah, no, the White Lotus collaboration with Banana Republic is phenomenal. We just dropped a 24-piece collection in partnership with White Lotus, which is such a good collaboration for Banana Republic. I mean, it really speaks to the modern explorer position. It's a great product. And as you know, Jim, I mean, you've been in our stores. We've been leaning into classes.

leaning into more precise assortments. We've been focusing on fit. We've been rebuilding trust. And how exciting was it to see that all start to take hold with fourth quarter comps in banana up 4% and market share gains? We are really excited with the future potential of that brand. A lot of people talk about their team, and it kind of eyes glaze over. It can't hear. Because you talk about getting your team. They're getting out of their comfort zone. What the

What does that mean for the brand and for your numbers?

Well, first of all, I've talked about that a lot with our team, and we are getting comfortable being uncomfortable. Today, what's certain is uncertainty. And so a resilient organization is driven by the motivation to solve problems on a daily basis, to focus on the consumer relentlessly, to drive what we do better. And again, the results that we have delivered

represent that effort. It was an exceptional year. All four brands gaining market share. It's really demonstrating strength in the industry. And it's showing that this is a winning team and we've just started. It's an exciting moment and we are determined

to continuously improve through innovation, better product, better experiences and drive momentum in the years ahead. I know you took me through the turning gap, the astounding turn you took through Banana Public when I go in the stores. They look magnificent. I heard you mention Athleta, so I got to bring it up. When is that one really going to be an engine?

First of all, bring it up. I mean, Athleta is the number three brand in the women's active space. It's the number three ranking brand. It's an important brand in the industry. It's an important brand in our portfolio. And when you look at the year, Athleta delivered a flat comp for the year. So there have been improvements across key metrics. And also, we gained market share. Now, this is against a previous year of double-digit decline.

So there is progress. We've made the brand stronger. We're launching new activations. We're reentering the cultural conversation. And it is reinforcing that we've got great long-term opportunities with this brand. We just need to continue to do the work to reset the brand and continue to drive our ambitions, which should be high.

So we've got more work to do. Stay tuned to Athleta. It's an important brand in the industry and in our portfolio. I will because there's a giant in that industry that I think has the prices a little too high. One last question. Everyone else is telling me worry about consumer confidence. Things are very shaky. I read your reports and I say, you know what, the consumer is pretty confident. Well, maybe you offer something that the consumer can't get elsewhere.

Well, first of all, we are always studying the consumer. We are a human-centered, consumer-centric business, and we saw growth across all income cohorts in Q4. Now, again, market share gains were led by lower income cohorts with strength in Old Navy, and we had outside share gains with strength in both top and middle cohorts, particularly with GAAP.

But what's important as we back up is our portfolio of brands really appeals to a wide range of consumers, which is a distinct advantage.

And so, look, there are always winners and there are always losers in any particular industry. Against the backdrop of a declining apparel industry, we gain share. The consumer is voting for our brands. We are fundamentally stronger. We're resonating with consumers. And we just have to stay focused on executing with excellence, with style and quality. I have no doubt. Yeah.

I have no doubt that you will do just that. That's Richard Dixon, president, CEO of Gap. Thank you so much, sir. Great to see you. Thank you so much. It is time. And then the lightning round is over. Are you ready? Let's go to Terry in Florida. Terry.

Hi, Jim. I'm enjoying being a fairly new member. Thank you. Last Christmas Eve here, I bought some stock and not very good Christmas presents. It's down over 28% right now, and I'm wondering if I should just take the loss and dump it or buy more or hold it forever. So it's Tetra Tech.

Very good company. Very good company's come down, but it's a really good company. Does consulting management. I've done it. I remember it's pollution control. I think you've got a winner. Please do not sell that. I need to speak to Rick in Florida. Rick. Good evening, Mr. Kramer. First time caller and now a new dedicated viewer over the last couple of months. Thank you for taking my call. All right, let's go. Which one?

I said I was hoping to join the club soon. Oh, I hope so. Do it ahead of next week's meeting. You got to join. We got some good stuff to say. How can I help?

Well, I was interested in this tech stock, and I thought this might be a good time to call because this was a company that had a major contract through NVIDIA a couple months ago. Their stock price rose up real quick, and then it kind of tapered off and it kept going down from there. And everybody kept talking about how companies that were getting involved with NVIDIA in the last couple of months would feel the ripple effect of everything going on. So I'm wondering if this is happening with this company also. It's TJK.com.

I know it because of the NVIDIA connection. I have to tell you, they have flat reverbs for the last three years. You'd be buying, it sounds a little like sound now. I'm going to take a pass on that one. Thank you for the kind words. Let's go to Heiko in North Carolina. Heiko.

Okay, I need to see profits. I need to see profits. I'm not seeing profits, therefore I'm not going there. And that, ladies and gentlemen, is the conclusion of the Lightning Round!

The Lightning Round is sponsored by Charles Schwab. Let's say you believe that the stock market is a good proxy for the state of a country. It's not perfect, but it certainly reflects how investors feel about America and its future trajectory.

But judging by the averages, maybe we should be embarrassed or even mortified because we're doing so much worse than similar countries, including countries that we've written off years ago. Consider these year-to-date returns in their own currencies. Germany up 17, Spain up 14, Italy up 13.7, France up 11, South Korea up 7. How is this possible at a time when we, the engine of the world, are down for the year?

Down 10% from the 52 we caught for the Nasdaq. How could there be such a disparity? Simple. Right now, they're doing better than we are. And given how we have so many great companies with such amazing prospects, it's worth delving into why there's such a disparity. First, these European countries have a central bank that keeps cutting interest rates to stoke demand. Today, the European Central Bank delivered a quarter point cut, taking its equivalent of the Fed front rate down to 2.5%. Six cuts since June of last year.

The EU is also committed to spending almost 800 billion euros for defense, ostensibly to protect Ukraine, but also to protect our own countries if Ukraine falls. There's a new sense of unease in Europe about NATO if the Trump administration decides to pull out of the organization. I don't think the worry's misplaced. Plus, mass defense spending is good economic stimulus. Second, individual countries are taking action to get their economies moving again. The biggest, most important market, the German DAX-40, is getting a major boost from the actions of Germany's new government,

which is loosing the so-called debt break in order to bulk up on defense as our country pulls back from defending Ukraine. The Germans have historically been very reluctant to run big budget deficits. They don't want to provoke inflation because they did not end well the last time that happened. But if your government won't borrow money, it just can't do much to choose the economy.

Now, though, Germany is willing to get its economy moving again by any means necessary. This move jarred their bond market, setting the yield in the 30-year bond up 25 basis points from slightly over 3%. Biggest jump since 1998. They'll do whatever it takes.

They've got no choice. Ukraine's very existence is now threatened by the U.S. withdrawal. Germany's committed to Ukrainian independence. This is an existential issue for them. Also, the auto market's been suffering a victim of the slowdown in China, so the German government needs to spend big to turn things around. They've got to lower their tariffs on our cars, though. On top of that, Germany needs to watch its back.

Last year, it exported $160 billion worth of goods to us, only imported $90 billion worth of our stuff. Presumably, President Trump doesn't like that. They need to make sure their economy is healthy in the face of potential trade war. They need to lower their tariffs on our cars, just as Ken Lang told you earlier in the show. But it's not just Germany.

While we've been furiously revising our economic forecast down, some believe we'll have negative GDP growth. Spain had a surprising 3.2% growth. They've been raising the estimates of how fast their economy is growing, based on tourism and manufacturing, by the way. The rest of Europe is being boosted by the huge uptick in defense spending. Germany is basically the engine of Europe, so their strength spills over to everyone else. Meanwhile, Hong Kong, a proxy for China, is flying because of artificial intelligence strength, as well as efforts to boost consumer spending. These efforts finally seem to be taking off.

How about here? Now, we all know what's keeping our stock market down. It's being sacrificed on the order of uncertainty and confusion about punishing our trading partners for allowing illegal immigration and fentanyl smuggling, in fairness, and also, of course, tariffs.

Trump ran on border security, not higher stock prices. So he's doing what he said he'd do. But everything seems so jumbled and hard to fathom. Many think that unless and until the Dow drops 10 to 15 percent, we're set up for stock market pain. And I've been trying to help you through the travails of that.

But at what point does the disparity between our stock market and our ally stock market become too great? I think we'd be in better shape if Trump rolled out the tariffs more gradually with a clear trajectory of where we're headed rather than these endless intermittent volleys of Katusha rockets. Until things start getting a little more measured, we'll remain in the Walmart White House where we will get everyday lower prices for the Dow Jones, the S&P, and most savagely, the NASDAQ 100. To me, it's a shame. It just doesn't have to be this way.

I like to say there's always a bull market somewhere. I promise you I'll find it just for you right here on MadMoney. I'm Jim Cramer. See you tomorrow.

You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer'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 madmoneydisclaimer. Friday night on an all-new Dateline. You're the most hated mom in America.

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