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Jim Cramer (14:04)

At these numbers from it the online message board that's become a major force in digital advertising and a stock that I say is one of the 10 best, maybe for the next generation. This stock's been roaring for months, although it got hit hard today it was down nearly 8%. I think was the gravitational pulled matter. Like I talked about the top of the show, even though Reddit has nothing to do with excessive data center spending and tonight at foreclose, this could report just a monster good quarter beats on every single key line, quitting 68% revenue growth. Without that, Reddit's guidance for the current quarter was much higher than expected and it's still such a bargain for for for Advertisers I think this growth story, as I say in the book, is still in its early innings. Don't take it from me. Earlier today I got a chance to speak with Steve Huffman, aka Spez, the co founder, president and CEO of Reddit. So take a look. Mr. Huffman, welcome back to Mad Money.

Steve Huffman (14:54)

Thanks, Jim. Glad to be here. Thanks for having me.

Jim Cramer (14:56)

Steve, I got to tell you, these are indeed blowout numbers. And your advertising revenue is clearly on fire. You are one of the most visited sites in the US you're able to monetize it in a way that I didn't think was possible when we first met a couple of years ago.

Steve Huffman (15:13)

Look, I think, yeah, look, another strong quarter for Reddit. We're really happy with the execution across the board and the ads revenue growth, 74% year over year, we're very happy with. Look, I think the allure of a tech company is that you can be a high margin, profitable, efficient business. And we've really tried to demonstrate that, you know, early here in our journey.

Jim Cramer (15:38)

Well, one thing that's absolutely certain is that you are bargain customers who advertise with you because you're so heavily targeted, find that almost everybody, that you place the ad with reason. Now that's an extraordinary thing. And yet you don't charge as much as I thought that you might as someone who has sampled you as an advertiser.

Steve Huffman (16:03)

Well, look, it's a journey, Jim. Look, our goal is to provide for our customers, you know, across the full funnel and in any climate. And so, you know, from what we can see, the ads market is stable. We do hear from our customers that, you know, there's some uncertainty about macros and maybe tariffs, but as we always do, we do our very best to, to show up for our customers and deliver them results.

Jim Cramer (16:30)

Well, it's, it certainly doesn't hurt. You have 91% gross margins, which I regard as extraordinary. Most impressive 40% adjusted EBITDA margins. These are much higher than every publisher, publisher I deal with.

Steve Huffman (16:45)

Look, that, that's, that's the aim of Reddit. High margin, high efficiency, very low capex. I love the position we're in. I love our roadmap looking forward and you know, our aim and what we've learned so far is, is we can be an AI winner without the cost.

Jim Cramer (17:06)

Right now, one thing though, I am concerned about, I think that you have purity and I love purity. But when we had Matthew Prince on, he said not that long ago from Cloudflare, that your site has actually been, let's Say, liberated by some companies that I think should know better. I'm thinking about anthropic and perplexity. I know you've been involved in some legal tangles, not asking you to get into that, but there is truth to people who are saying, I believe you think that there are people who just plagiarize you and taking advantage of you, and it's not right.

Steve Huffman (17:39)

Well, look, we see both sides of this. Of course, I can't add anything to the legal conversation right now, but our complaints are out there, and I think they're actually a good read. And our duty is to protect our data for our business and our users. But we also have great relationships in this space with Google, with OpenAI, and we're very excited. Over the last couple of years, I think we've mutually learned how valuable Reddit's data is and the ways that we can collaborate to make our mutual products better for our mutual customers. I'm really looking forward to, you know, progressing these relationships over time.

Jim Cramer (18:17)

My hope is, is that I know, for instance, Wall Street Journal and Open, I have a good relationship that, that you can have more lucrative deals. I want your ad model. I think it's fantastic. But I still think that there are people you can make deals with who would, who absolutely love to show that they're using your content. So the other guy should use it legally, of course.

Steve Huffman (18:36)

Like, I think there's. There's so many uses for Reddit.

Jim Cramer (18:38)

Right?

Steve Huffman (18:38)

Our primary product is community and conversations, but part of our mission is to make the knowledge on Reddit that comes from other humans accessible by everybody. And so, like, we love to be, I think, a player in this space to see how we can, you know, kind of help everybody advance the state of the art and build these great consumer experiences.

Jim Cramer (19:01)

Now, one of the things that I thought was quite surprising is I know many people who, I'm a big user who were afraid that you would jam it up with ads, that you would junk it up. You yourself wanted to be sure you had the right amount. I don't hear any complaints at all. I mean, I don't know, how did you strike that balance?

Steve Huffman (19:20)

So ad load is one way of growing inventory, but for us, it's like strategy number 10. The best way to grow inventory on Reddit is to grow usage of Reddit. So we had 190 million Americans visit Reddit every week in the last quarter or on average. And so the reach is there. And so our work is, can we increase the frequency? And we do that by just making the Product better.

Jim Cramer (19:47)

Right.

Steve Huffman (19:48)

When you visit Reddit, we want to make sure in the first 30 seconds that you see something that's really amazing and relevant to you, that causes you to come back. That's the best way of growing inventory and in harmony with the consumer usage of the product.

Jim Cramer (20:02)

Do you think you're still relatively unknown? When my wife's company approached you for Mezcal, we were shocked that we were not overwhelmed by other mescal advertisers. I think they just felt, well, maybe this is not the right qualified audience. Now, we're, we're sure that others are going to find it, but the fact is, is that there are just many buyers of ads who just still don't know that you're the number three.

Steve Huffman (20:27)

I think this is the exciting thing about Reddit, both on the ad side and the consumer side, which is we're actually still early in our journey and so we see so much opportunity to grow our user base, to grow our customer base, to deliver better and better results. So I love where we're at and how we've got here, but I love even more our outlook for the future.

Jim Cramer (20:49)

Now, there's been a big move, obviously, in the stock of Robinhood, and a lot of those people get their ideas from Wall Street Bets. What's the growth and the qualification of Wall street bets? Can that also extend to these companies that are making bets on events that occur.

Steve Huffman (21:09)

Like Wall street bets? Is it. It's a community near and dear to my heart. I love that community and I've loved to see the evolution of it. And it's one of many investing communities on Reddit. But I think they've done a particularly good job, I think, at highlighting the fun and uniqueness of Reddit. And they've actually been experimenting with our developer platform as well. And so I think there's a lot of momentum across the board. But with that community in particular, I'm.

Jim Cramer (21:40)

Seeing great, I'd say allegiance to the health care. Health care portions for people who have been sick, who have come together, talked to each other, and the advertisers are finally getting wind, the drug companies are finally getting wind that Reddit is the place where they have true, true community.

Steve Huffman (21:58)

Well, so that's the thing about Reddit. There's really something there for everybody. And look, you can go there to talk about stocks, as we discussed, but every moment in your life's journey, whether you're getting a job, the ups and downs of relationships or medical challenges, we call those support communities, you can go through your life's journey on Reddit because really it's about connecting humans with other people who are going through the same thing. And so sometimes this can be fun and silly, but other times, you know, profound and really meaningful for people. And I think that's why this product is so interesting and that's why it's, it's so fulfilling to work on.

Jim Cramer (22:37)

One last question. I like the fact that if a site is somewhat, let's say genteel, not saying gentle, but genteel. International. It does well like Pinterest. Our friends at Pinterest are doing terrific job. International. I still think you have a lot of land, a lot of real estate International that you can get for Reddit. Do you feel the same way?

Steve Huffman (22:56)

Oh, absolutely. So today our Traffic is about 45% US, 55% outside the US you know, for most of the people in our space, that international number is 80 to 90%. And so, you know, that's, that's where we look to go. So a lot of our growth over the next decade should actually come outside the United States.

Jim Cramer (23:17)

Well, that's terrific. You know, I'm a huge believer. Use user and use believer and talk about you and how to make money in any market is maybe one of the 10 best that has come through in the last five years at Steve Huffman. He's co founder and CEO of Reddit. Steve, so, so that you came on the show.

Steve Huffman (23:33)

Very kind, Jim. Really appreciate your support and thanks for having me out.

Jim Cramer (23:35)

Of course. That money's back after break. Coming up, is Shaq back? Shake Shack just served up results and Kramer is sitting down with the CEO to see if it's time to take a bite. Next streaming is changing the way we watch live sports. And your Internet connection can be the difference between catching the game winning touchdown.

Rob Lynch (23:58)

As it happens or hearing about it.

Jim Cramer (24:00)

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Jim Cramer (24:12)

It's not just fast, it's game changing. Learn more@comcastcorporation.com sports the heaviest metal credit card of all time, rumored to be one of only 18 in existence, plated with the very same tungsten that forged the international space station and wielded at business dinners like a samurai sword. It's a classic corporate power move. But the real power move having end to end visibility on your most critical shipments. FedEx. The new power move is the Shack back over the Past few months we've seen some big pullbacks in the restaurant space including high quality operators like Shake Shack, which you know I love. When these guys reported at the end of July results were a little less than perfect. The Stock plunged from 100%. 40 and change just under 90 as of last night's close. But this morning Shake Shack reported a solid quarter with better than expected same shock sales, a solid revenue beat and a 5 cent earnings beat off a 31 cent basis. That's huge. While the guidance for the current quarter was necessary perfect, it was good enough to let the stock rally almost 2% today in a restaurant chain group. That is just awful. And now I'm wondering if it might be time for Shake Shack to make up some of those losses for in the past three months. We got a great chance to find out because we're going to talk to Rob lynch, he's the CEO of Shake Shack, to learn more. Mr. Lynch, welcome back to Bear buddy.

Rob Lynch (25:41)

Thanks for having me, Jim.

Jim Cramer (25:42)

Rob, when you're on last, you told us look there are going to be some changes. It's going to, the place is going to have better, some better procedures, better supply chain. I don't know how you did it, but it looks like it all came together. Can you describe what it's like to go from a low same store sales to much higher? Because this is a very big deal that you've engaged years.

Rob Lynch (26:00)

Yeah. I mean it all starts with operations as a foundation for everything that you do in a restaurant company.

Jim Cramer (26:05)

Right.

Rob Lynch (26:05)

If we're taking care of our team members, they're taking care of our guests. We're going to create that virtuous cycle and increase frequency because people are going to come in and have a great experience. It also gives us confidence to go out and invest in driving traffic because we know when these folks show up at our restaurants, they're going to have a great experience and we're going to derive lifetime value versus just that one transaction.

Jim Cramer (26:26)

So.

Rob Lynch (26:26)

So we've spent a, you know, a year and a half deliver working on.

Jim Cramer (26:31)

Trans, but it's not a quick turn. Yeah, that's a very good point now.

Rob Lynch (26:34)

And, and you know, our team is, is unbelievable. We brought in some new people, have brought in some external perspective, but also the people that have been around Shake Shack for a long time are completely bought in on the model moving forward. So every KPI is moving in the right direction where we're much more efficient and productive. So that's translating straight into margin. So it's been a great transformation and then, you know, the investments we're making in the food innovation and the media dollars are driving people into, to our shacks and they're having a great experience.

Jim Cramer (27:05)

I'll tell you, I go to a number of shake shacks. Whenever I can, I go and I said to myself, you know, it seems that it might be faster. And then on the call, you actually are shaving a minute off. Now, pumping was him. What's a minute? It really is important, correct?

Rob Lynch (27:21)

Yeah. You know, when I started my career, I started at a fast food company that's probably close to the fastest in the industry. And we always said if we could save one second, it was worth $1 million to the system.

Jim Cramer (27:34)

Right.

Rob Lynch (27:35)

So we've now reduced our speed of service on average by 70 seconds in a year and a half. So we've got more to go. We've got more to go. You know, we have instituted a lot of new processes and a lot of new labor management tools, but we've got great equipment coming, you know, assets that are going to make our, make it easier to operate our restaurants, make it easier for our team members to execute with excellence. And, you know, we're going to keep getting better. But I'll tell you, it's not just about speed, it's about accuracy too. And we are really focused on, on accuracy, making sure that the orders that, that come in, especially in a digital age, and a lot of the delivery and takeout, if you don't get that order right, they're not sitting in your dining room with the ability to come up and say, hey, you put cheese on this. And I didn't want cheese. So that really frustrates guests. So we're really focused on trying to make sure that we're the best in accuracy as well.

Jim Cramer (28:29)

And not only that, but obviously when it's, when it comes faster, it is hot. And we like it hot for sure.

Rob Lynch (28:36)

Especially fries. And you know, our fries, we believe we have the best fries. But you know, I was, I was at a shack, we opened up our battery shack in Atlanta back in June and I was.

Jim Cramer (28:47)

Oh, that was the one you were all excited about?

Rob Lynch (28:49)

Yeah, full bar, first company operated bar. And I was eating the fries and like, you know, these just aren't crispy enough and they're kind of a little light. So we went back and we looked at everything and I said, what if we cook them a little bit longer? So we are now instituting a new process on our fries, on our bread and butter of our business, our fries. We're cooking them a little bit longer and it's not going to add any time to our, to our delivery for our guests. And our fries are going to be the best they've ever been.

Jim Cramer (29:17)

Oh, I bet they will be. I love them anyway, but this is good to know. Now one of the things that distinguishes you as an operator, I followed your career. You don't suffer fools. Guilty. And you're also willing to admit mistakes, takes and move on quickly. Limited time offer that wasn't that good. This, this time. And you just said, hey, let's go to value. Correct.

Rob Lynch (29:37)

You know, I mean, look, you have to take into account your internal diagnostics as well as the external environment. Right. This, this French, French onion soup burger. Oh my God, it's unbelievable. People love it. The reviews are amazing. But in this, in this time period over the last month, like there's so much value and you know, we were promoting a full price premium burger. So we've pivoted and we've launched a new value platform in our app only. And our app traffic is up 80%.

Jim Cramer (30:12)

Wow.

Rob Lynch (30:12)

So I mean that's transformational and that's just in the last week. So we're going to continue to monitor it. But that's driving 400 basis points, points of traffic growth across our business just in the last week. So.

Jim Cramer (30:24)

Oh my God. So this is going for you, go forward. This could be very exciting people.

Rob Lynch (30:27)

This could be, you know, this is, could be transformational for our business.

Jim Cramer (30:31)

Now I know comparisons are odious, but there was a call this time from Chipotle, a company you and I both like. And Scott Boatwright, CEO, did talk about how there was this kind of. I want to, I'm going to use a Jimmy Carter was like a malez among people in their 20s. Gen Z. And I question that. I don't think I see that at your shop. You don't have a group of people in any particular generation that you think is not, is weaker or not spending.

Rob Lynch (30:58)

You know, it is a tough environment out there. I mean, I'll, you know, I'll definitely agree with Scott on that. I believe that tough environments are opportunities to make your company better. And I know Scott does too. You know, we're focused on making sure that we get the value equation right, particularly for that younger audience. You know that the 16 to kind of 25 year old demographic, unemployment's up in that group.

Jim Cramer (31:27)

Yes.

Rob Lynch (31:28)

Spending is a little, little tougher. So we need to make sure that we're delivering solutions, you know, delivering options for them to come in and, and Deliver a great value for them. This 1 3, 5 is a perfect example. And you know, they're heavy app users, so we're, we've increased our app downloads 50% this year. You know, we are driving people to that app to deliver the value platform that we're launching. And, and I think that's really going to appeal to that audience.

Jim Cramer (31:54)

Okay, one last question. I know my friends at Texas Roadhouse struggling because beef is so much part of their menu. And they, they have a ten, you know, they have an eleven dollar kind of top and someone has to pay the price. Cattle still been miserable, but your overall basket's not that bad, correct?

Rob Lynch (32:10)

Yeah. So beef we're projecting to beat next year to be up about mid, mid teens. Overall inflation expense a lot. It's a lot. And you know, and it's not something that turns quickly. You know, rebuilding the herds, getting the supply back where it needs to be is a challenge. And you know, we don't buy from the, the, the main beef supply. I mean, our beef is all natural, no hormones, no antibiotics. So it's a smaller segment of the beef industry which is even more restricted.

Jim Cramer (32:40)

Right.

Rob Lynch (32:40)

So we've had to go out and find incremental supply because we're growing so rapidly. And we, you know, in doing that, not only have we found the supply, we've also brought on some new suppliers, same high quality, but it's going to reduce our cost.

Jim Cramer (32:55)

Well, so I'll tell you, make my job easy. So many people come up to me and say, I just had a great burger, Shake Shack, can I buy the stock? And I always had to say, sometimes you can't relate the taste to the price of the stock. Now you can, because of the great throughput procedures and discipline that you have brought to this organization, which it needed. And I think the stock is going all the way back. I want to thank Rob Lynch, CEO of Shake Shack. I am so glad that he's a shack. But now I get to say, yeah, you can buy it if you liked it. It's good. Everybody's back after the break. Coming up, Logitech posted strong results, but can the stock keep scrolling higher? Kramer's plugged in with the CEO. Let's talk about the incredible move in the stock of Logitech International. Walk into any office, pretty good chance you're going to see an ocean of Logitech keyboards, mice, webcams. Here's a stock that's now up more than 46% year to date, including a 2% gain yesterday, another 4% gain today. Now, that's because Logitech reported on Tuesday night a 25 cent earnings beat off a $20 basis. With higher than expected sales and management raising its guidance for the holidays. The company was able to offset the damage from the tariffs in the quarter and they expect they can do it again. Even though a lot of this merchandise does come from Southeast Asians, from China, it's been hit hard. Now, could this one even have more room to run? So that's going on here. That's very positive. Let's check in with Hanukkah Faber. She's the CEO of Logitech International. Find out more. Ms. Faber, welcome back to Money.

Hanukkah Faber (34:38)

Thanks. Hi, Jim. Thanks for having me.

Jim Cramer (34:40)

Well, I think that we all have this view that perhaps the consumer is not doing well. I look at your numbers and I think something's going on. Maybe secular, not cyclical. Maybe it's gaming, maybe it's a PC refresh. You don't see these kinds of numbers if a consumer is not doing well here or worldwide. Is this product derived or is it just a belief that you can spend money on tech even if you don't want to spend money going out to dinner and having a few drinks?

Hanukkah Faber (35:07)

Yeah, we're obviously really pleased with the results of the quarter. It's really our strategic priorities in a market that continues to be robust. So what we see around the world is that certainly on the work side of our business, so we do products for work and for play on the work side of our business. The markets are strong around the world. That's driven partly by return to office mandates by businesses. You know, many companies asking their people to come back to work and therefore redecorating offices, renovating offices, moving offices, that's good for our business. Second also to Windows 1111 refresh, helping the market around the world. So that's all looking really, really great. And then gaming as you know, I mean, you're such a big gaming fan and expert, also continues to look pretty good.

Jim Cramer (35:56)

Well, is something like GTA Grand Theft or the new, new version? Is that already making people think, you know what, I ought to have some. Let's get some new stuff. This thing is going to be amazing. And I would say that because people thought it might have come out earlier, it's not going out the later. But it is a driver of things, isn't it?

Hanukkah Faber (36:13)

Yeah. So our business is not just linked to great games coming out. And GTA 6 now won't come out till next May, but it does help. So actually what we did see around the world, gaming continued to be very strong for us in the quarter, we were up 5% in sales. Demand was up double digit. China was outstanding. The US Was actually a little softer to marketing. Gaming was a little softer. But we're cautiously optimistic that that will change for the holidays. Because to your point, there are some big games that are just coming out this month. Battlefield 6, for example, which is off to a great start. And that kind of game plays to our strengths.

Jim Cramer (36:54)

Let's talk about China. We all hear that China is doing some things very right, obviously, and presidents and talks with them, but we don't hear often that the consumer is spending a lot there. So what kind of equipment are they buying there?

Hanukkah Faber (37:11)

Yeah, so our business was up more than 20% in the quarter in China, and that's not the first quarter that's happened. The market is solid in gaming in China, and that's. There's a little bit of that lipstick effect. The consumer is a little cash strapped. She can't go out to eat or go on a vacation. But what do you do? You spend time gaming. So the market's very robust in China at the moment for gaming. And then I'm very proud of our team. We put in place a China for China team in Shanghai that's multifunctional, coming out with some outstanding innovation because that Chinese gamer is super sophisticated. So came out with a new G316 keyboard for China in the quarter. And our marketing there is just improving every day. We had a huge logiplay event in Shanghai in the quarter with thousands of influencers creating content. And we actually won a prize for best marketing ROI at a big Chinese show last week. So our team in China doing a great job, and Logitech remains by far number one in gaming there.

Jim Cramer (38:15)

Okay, so what's your plan to reignite America?

Hanukkah Faber (38:19)

Yeah, so some of that. We're obviously number one in America, too. And the business is also very strong. But we take some inspiration both ways. In the US Too, we're doing some really cool stuff. For example, we just signed a New deal with McLaren that's global, but the US doing a great job leveraging that with some cool new products. Headsets with McLaren, of course, True Force Gaming. Wheels with McLaren. So, you know, we learn from each other, and that's the beauty of a big global business.

Jim Cramer (38:48)

When did you see that that things would. Would really take off? Because there have been a while where, you know, things were steady, but it just seems like that so many cycles are kicking in, and it's been a long Time since anyone said on our air, and you know what? China was really strong. I mean, this is a. It's a big change from what I'm used to hearing.

Hanukkah Faber (39:08)

Yeah. Again, I think our intervention to have a China for China team is really important. In G, that's the biggest gaming market in the world. You need to be on the ground there and developing for that consumer, and that can then benefit the rest of your global business. That's what we've done. And I'm really proud of the team delivering those results.

Jim Cramer (39:28)

I'm really proud of you and the numbers that you generated. These are fantastic. The stock has broken out definitively, and I don't think it's stopping here. I want to thank Heineken Faber. She's the CEO of Logic Hanukkah. Great to have you on. Wow.

Hanukkah Faber (39:42)

Thanks, Jim. Appreciate it.

Jim Cramer (39:43)

Absolutely. Mad money's packed yet for the break. Coming up, Kramer takes your calls. And the sky's the limit. It's a fast fire lightning round next. It is time. Turn to the light. We'll come to the front. Close to the msu. My step bears the grab a plane of sound. And then the lightning round is over. Are you ready, Ski? Guys, time for the light round. Let's start with Sam in Missouri. Sam. Hi, Jim. Thanks for taking my call. I bought your book two weeks ago. Great book. Learned a lot from it. Oh, thanks a lot. I got a lot in there and some good stuff for tonight, too.

Rob Lynch (40:34)

How can I help?

Jim Cramer (40:35)

Yes. Hey, I bought a stock in the nuclear energy sector back in December 24th. Had a great run. And back on the 16th, it had some negative news in the sector and it really started to drop. So on the second day, I took three quarters of my profits. And I was watching and waiting for it to go down because I thought the fundamentals were good. And I was going to buy back in, okay. And all of a sudden it bounced and now it's going back up. Okay, and which stock is it? And the Sentry Energy ltu look that it's a good company. I mean, look, it did have that nice pullback, which is what I wanted to see because it was just parabolic. I think you're buying it. It's not. I sold my power. It's not crazy expensive. Let's go to Phil in Connecticut.

Rob Lynch (41:29)

Phil.

Jim Cramer (41:31)

Hey, Jim, how you doing? It's Phil. Actually. I'm a Philly guy and I'm a big Eagles fan, so. Go Birds. Go Birds. I like this guy Carter. I think he might be the answer. I like this Guy Roseman. Here's my question. Yeah. Rare earth stocks have been dominating the news cycle, especially now with the deal with China. So is USA are a buy or just an ill fated trade? I'm going to say that you have to stay away for now. I mean, one of the things that you needed was that kind of mojo that came from the shortage. If we work out a long term deal with rare Earth, it's not, it's not going to rebound very well for USA Rare Earth, which is losing a fortune. Let's go to Paul in Texas. Paul? Booyah, Jim. Oh yeah, Paul, my company. I want to know if it's a buy. It's Arcos Dorados Holdings. No, no, I mean you just own McDonald's. That's my key. That's my. I happen to like McDonald's by the way. Not the stock and the burger. Let's go to Bubblegum in Alabama. Bubblegum, a big boom, boom, boom. Booyah to your Jimmy Till. Hey, Bubblegum, how you doing today? I'm doing good, Jim. Good, Jimmy, good. I stepped on the other day. It's still sticking. Go ahead. I'm sorry about that, Jim. Jimmy, chill. I just want you to know you are the king of the hill, my friend. You are a rock star. Oh, thank you. Thank you, chief. Yes, yes, sir. I, I just love the energy you bring to the show, Jim. And thanks for taking my call. I have a great step. They, they are like fuel. Cool. For me. You're like 98 octane. So what stop you got here? Bubblegum. Yes, sir. Jim, what's your opinion on Ollie. Ollie's Bargain Outlet? Ah, man, I'm a member of Ollie's army. Never go to one of the army members and think that he'll doubt Ollie's. I got a nice tarp there with a small hole in it.

Steve Huffman (43:28)

You never know.

Jim Cramer (43:29)

All right. And a book for 98 cents about the end of World War II. But it was waterlogged. Still. Read well. And that, ladies and gentlemen, conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Coming up, turnarounds don't come easy. But Starbucks may be brewing something stronger than expected. Kramer explains why next turnarounds are so difficult to pull off that it's very hard for people to stick with them, even though the gains, they can be enormous. Often the company that a new CO takes over has been so abused by previous management that nothing can be done. Even the best of the best, Mary Dillon, wasn't able to turn around Footlocker along neglected retail chain and she's the best in the business. She saved Ulta Beauty, for heaven's sake. In the end, she had to accept the takeover bid that was considerably less than the stock was worth when she took over, although much higher than it was trading at that time. So why bother with these then? Because when they hit, they hit really big. Say to the case of Chipotle, which admittedly needs another turnaround after today's beatdown, but I'm talking about the old Chipotle. This company fell hard times in 2015, stayed down for another three years, losing its mojo thanks to a series of foodborne illnesses outbreaks all over the country. It seemed at its earliest moment, with the stock at a split adjusted price of around $5. In February of 2018, Chipotle brought in Brian Nicol, a rising star from Taco Bell, which he turned into the strongest business of the three legged stool that is Yum brands, installing him as CEO. At the time, I don't know, I was skeptical. Putting someone in who helped push a burrito with 80 ingredients versus one with just eight. I mean, really, was he the right guy? Well, the answer was absolutely, you bet it was. About a year later, the ship was completely righted and the stock rallied all the way to $56. That's right, $5 when he came in to $56. When Starbucks poached him last year because they needed to turn around the rest of their own. Unfortunately, police clearly struggling under the current leadership, but Starbucks now under Brian Nicholl. We're slightly more than a year into his tenure and after some fits and starts this morning on Squawk on the street, he told me that he's finally ahead of plan. Both September and more important, October better than expected. Given that we're still in the final days of October, that's a huge heads up. People pay attention. It's one that foolishly very few did pay attention to because the stock finished down a dollar today. How's Brian doing it? He's doing it the nickel way, taking care of service first. He's got scale, he's got the biggest chain, he's got the biggest drive through the biggest delivery. He just needed to staff all these businesses correctly, needed to get maximum throughput. That was his challenge at Chipotle when he took over to IS so he knows how to do it. Starbucks throughput, he explained to me once, is the name of the game. You get that right, it can all come together. Process, you need process. It's like Shake Shack. And that's what he's seeing right now with his green Apron service plan, time to serve. Down big complaints versus positive comments down big as he put it. Quote it gives us confidence that we really have turned the page to a new chapter. End quote. Now I know to some of you that sounds like boilerplate. Let me do my job for you. I wanted to come out here with something conclusive, conclusively positive about Starbucks. I simply didn't have the confidence to truly stick my neck out. So worried that this would happen it until today. Too many things were wrong, too much destruction. I was concerned about too much fraud. But now with the Chinese business about to get a big partner and with cadence improving at the stores, I think it's all coming together. Few believe the environment's gotten tougher. Many restaurant chains are disappointed. So the turn of Starbucks is being overlooked. I'm betting that won't last for long. I get the reservations. Like I said earlier, turnarounds are hard. Bracken Dow fantastic CEO put Logitech on the map. Yes, the one we heard from today having struggling with turning around VF Corp. Yeah Powell Julie Masinel. She's a stalwart at Yum Brands who delivered stellar results. Is trying so hard to modernize Cracker Barrel without alienating existing customers. Difficult. But Starbucks under Brian Niccol, just like when he was running Chipotle. I think the turn has started. You can't hold out to buy it until all's clear. What are you waiting for? It's time to buy the stock of stock Like I said, as always, bull market summer. I promise finding just for you right here on Man Bunner. I'm Drew Kramer. See you tomorrow.

Commercial Announcer (48:07)

All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBCUniversal or their parent company or affiliates and may have been previously disseminated by Kramer on television, radio, Internet or another medium. 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. 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 madmoneydisclaimer A Sapphire Reserve.

Steve Huffman (48:46)

Story from the Foster sisters We went to Rome.

Commercial Announcer (48:48)

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Jim Cramer (48:50)

The entire time.

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Jim Cramer (48:57)

No proposal.

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Jim Cramer (49:08)

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