Jim It, China, Mccormack discussed on MAD MONEY W/ JIM CRAMER
The quota virus how can be trading up this week helping this fits with the hotel business in the cruise business. They're all going up. I've been saying I I did. This is not right that the stock shouldn't be going up and people should be careful. You and I are in the same boat. But you know what Nelson here's the PROB. Everyone's saying the same thing hanging in the buyers. Don't WANNA listen. Maybe they have to lose some money. Maybe that's what will make them Sir uncertainties before we certainly we have when it comes to virus outbreak outbreak. Trying to call it. Play out much more money. From salt and pepper more exotic flavours Uku defined consumer giant mid-quarter. McCormick in your kitchen cabinets but is it stock the secret ingredient for your portfolio. I've got this user. Then the tourists were up by rate gut but within groups next gains uncertain. How could Elliott Management's moving to ever g impact the sector uninvestigated daughter calls rapid fire tonight's edition of the lightning round? So stay Ed Bremer and all week. I've been telling you that I'm a little. Oh skeptical about this rebound and that position gets harder and harder to justify with every passing day while the average keep marching higher. I'M GONNA stick my guns. I think this could be another shoe to drop Either from the corona virus outbreak maybe Bernie Sanders surge in the primaries or maybe from the upcoming slate of retail earnings when that shoe drops who wants to be defensive defensive a position and when it comes to playing defense doesn't get much better than McCormack number one maker spaces sees last week. This company reported a slight rather mistress driven by currency fluctuations. Little little lighter guidance because they're investing were in their business and the stock tumbled nearly four percent on the news. Cincinnati stopped just keeps getting hammered. Because this is the kind of thing people buy when they're feeling as euphoric as the average indicate so. Could this be the buying opportunity. Don't get many in this one. Let's dig deeper with Lords courteous. He's the chairman CEO McCormick. Get a better read on on the quarter. Where's companies headed by to this by Mr Kerr's welcome back the Lord's good to see you? It's always great to see because every one quantities is in my kitchen every single one I tell my wife you ought to watch because she is the biggest user of McCormick. Well Jim. That's great to hear and it's great to be here to talk talk to you because you've got to be feeling good. I came on this show for the first time. Two and a half years ago after we adjust done the deal buying French francs and you told did your viewers that that was going to be a great combination and if they had bought stock that day with reinvested dividends they'd have had a total return of of about eighty percent since then which double the market in. This Friday go was that could I knew what I like. Okay and I try to tell our people who watch if you like French is like I do. I'm from Philadelphia Myself Pencils if you like Franks because you put it on. Everything didn't know how could miss in the make it. But the analysts was is not used the product they were looking at some sort of spreadsheet but you and I both know these while wildly popular but they had been doing nothing with them. And you've changed that big time. Yeah and they feed right into consumer trends. Gem consumers want more flavorful boulder products and there's a real movement towards hotter and spicy flavors especially among a younger consumers and so these brands were terrific. Hits with millennials and Gen Z.. Consumers literally the younger you are the more likely already using friend. Lord there's a there is a you holding going on in this country right now. My favorite spice is he is is all day and I put it on many more things than I should. I love hot sauce. People can't really get this can Jim. This has been an an unbelievable ebel hit. We introduce this through our online store and sold out literally less than thirty minutes. How's that possible? It's it's incredible well and and I tell you. This is an example of what they call the Revenue Synergy. We've got great brands. And now we have this great capability and hot sauce. And so here's a chance chance to bring old Beta lovers but this is not even grilling season. Yes what's going to happen. How can you are you in twenty four seven to get out? Ah Believe me to be out is is not something that I want. I want to fulfill that demand. We wanted out there. How did this happen? Let's think about this. This is millennials. Eleni owes deciding that they want to be able to stay thin and have something that tastes great. I think that's a big part of it. You know that's great flavor. Hot Sauce delivers a a Lotta great flavor. Besides the Heat Franks has a very distinctive taste profile and of course obey especially if you're in the mid Atlantic states I mean there's there's nothing ED stands up shirt orders right exactly now. I own a Mexican bar and what I go through more than anything else. The world is hot sauce. Many different kinds. I wish you made it or I wish you would buy one because it is hard to keep in stock the Minos go crazy but I need a McCormack brain one one that I trust. Oh well well you know Franks is a powerhouse right now. But we're committed to be the number one maker of hot. It's awesome the world so when we acquired Franks that made us number two in the world and it's a number one and number two in the world and our goal is to be number one so I'll take the advice under and what we can do about. I think it'd be pretty good at the time. There's a lot of moving parts that are going on. You're doing something and people get confused about it you're doing. ERP Your Dreams. Enterprise Resource. It's going to cost money to do right. You bring in an outfit. That really makes him. We're organized you haven't done it in a long time. Tell people why you have to do that so they don't think those money wasted. Yeah sure so. So first of all I want to say that our underlying businesses to rip strong growth and we've continued to invest behind our brands. And and and doing you into things to build the McCormick the future and this is part of building McCormack or the future our ERP system the software that we run our business on was was We went onto the platform that we're on right now in two thousand and two and we were a much smaller company then much less international than we are today and the in fact as technology has moved a long way since two thousand and two and so the run our business efficiently and effectively at the larger scale and the larger size with today's technology analogy this investment to make all right good. Because I think that some of the analysts are saying well listen. You really have to spend that much. I want you to be equal to your expansion plans which are important global system. So they are. They are inherently expensive. But Jim it's like a it's like a the cost. It's like the pig python. Okay okay you know it goes in but then it's going to pass through and so right now in in two thousand twenty. We're going to have the ramp up of expense but we'll be back on our growth algorithm after that that will not stop our growth album. This is again. Why the opportunities there now there was something that you mentioned you have you level division in China and I have is under the mistaken impression that something is terrible is what's going on? There would mean good for you because the more people Eh Cook at home and not go out but you did say look. It's not a positive. Yeah it's hard to say that it's positive right now. That's it's hard to know the impact the closest fires in in China. We have a large business in China. A part of it is supplying consumers. Part supplying restaurants sooners are. We're not going out a lot of the countries on on on lockdown. I'd say that right now. Our number one concern for the health and safety of our employees and quality integrity of our products. And it's a little soon to know what the financial impact but it can't be a positive you know when people aren't going out to restaurants and consuming our our customers products and and it's a tough time there. I'm Craig criticized the what we do in China's for China so we manufacture manufacturer in China for the exactly you get daily updates of how they're doing it people people okay do and so at this point in time so we've got over nine hundred employees. Oh He's in Wuhan and a manufacturing facility there and and as of now there are no known cases among any of our employees or their family. So that's that's certainly good news. That's fantastic Aston. Lose one last thing I do want to ask you. I'm seeing this on Ebay more than it selling for the. How is that possible? Can I flip this. Can I sell this for thirty to fifty dollars which going after. Now let your conscience be your God has been going for fifty bucks on Ebay Actually I. I'm I'm not cooking this weekend. Going to be using well anyway. Thank you thank you for this kind comments. It's about knowing that it was.