But the real thrust of the call, something that couldn't be captured in the headlines at all, came at the very beginning of the call when Schultz traced out what he called a seismic shift in retailing that occurred this very quarter past: the twilight of the traditional bricks and mortar mall shopper vs. the rise of the device toting home shopper and what it means for retailers of the future.
Schultz pointed out that many commentators have blamed weak holiday sales on the weather, the shortened period between Thanksgiving and Christmas and the government shutdown. Schultz dismissed those almost entirely. Traffic, he said, went down because America's changing. This was the year where people decided that they like shopping online more than they like going to the mall and they aren't going to go back. It's a secular change and it is just starting.
But, he said, Starbucks saw this coming and has been able to embrace digital, embrace mobile and embrace social in ways that have made Starbucks not immune, but more immune than other retailers. The technology they have invested in has allowed lines to move faster, giving the company a chance to add more complex items, liked baked goods, carbonated drinks and special coffees to the menu without slowing down the through-put.
Most important, Starbucks, by virtue of its principal product, coffee, does not compete with cross town neighbor Amazon. Or to put it another way, Amazon's got the original beast mode on offense, Marshawn Lynch, but Schultz is the equivalent of Cramer uber fave Richard Sherman, a defensive playmaker that is capable of winning the Super Bowl of retailing just like I think he could win the actual Super Bowl for the Seahawks.
There was so much else that was fabulous on the call. I like the rollout of Teavana that's just beginning and I suspect that it will be a gigantic driver in the out-years. I thought that the analysis of how people like gift choicing -- meaning giving a gift card to people has now become engrained in the culture. I like that those who get gift cards for Starbucks are often people who have never been to one and not only will they buy some coffee but they might be swayed into some of the other new food offerings with high price points.
But here's the bottom line: on hideous days like today you have to remember that just like Pete Carrill might make you want to bet with the Seahawks Howard Schultz makes you want to invest in Starbucks because he is the very embodiment of the Bankable 21 that I salute in "Get Rich Carefully," the CEO coaches who win even when, on a day like today, all others around you are losing.
At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the stocks mentioned.
Getting Perspective on China's Crisis
Posted at 1:52 p.m. EST on Thursday, Jan. 23
We have our first crisis of the year, and we are handling it as terribly as can be expected, given that fact that it is unexpected.
I am talking about the Chinese credit collapse and how we have all collectively decided that this is one that can reverberate into every company that has any exposure to China, as far ranging as Ford (F) and Coach (COH) and Boeing (BA) and Goldman Sachs (GS).
All crises are pretty much the same in the post-Great Recession world. There's the initial shock -- holy cow, there are problems in the Chinese banks! -- which shouldn't be much of a shock at all. However, until the last 24 hours, no one was really focused on the Credit Equals Gold No. 1 Collective Trust and the aches and pains of the China Credit Trust. We have all had endless assurances not to worry about China because the government has it all under control.
But when we have some bank potentially being allowed to go under or a bond being allowed to default, there are implications that aren't instantly patched up, especially when you have a declining Baltic Freight Index and a flash merchandise index report that are definitive downticks.
Hand in hand with that initial shock is the broad panic. The panic is immediately translated into stocks via the S&P 500 futures, and therefore everything goes down with it. All 500, hence the red on your screen.
Now, there's no use fighting the initial tidal wave. Especially given the fact that the strongest areas of this market so far this year have been industrials, techs and banks, and all of these areas are suspect, because so many do have ties to China. Do you want to buy Caterpillar (CAT) now, knowing that it has moved up and there's a giant Chinese component? Do you want to be the first to come in on top of the big moves in 3M (MMM) and United Technologies (UTX) and call the bottom?
I sure don't.
But there's also no need to panic. In fact, you want others to panic to give you the prices you want, not the ones you have had to take for some time now. It's always so easy to say, "I am cutting and running because of China," when perhaps we should be thinking, you know what, there are some bargains being created here, because while China is important to the world's economy, it isn't the U.S., which remains strong and on course for growth this year. One look at the strong existing-home sales and the very good employment claims we got this morning will prove that claim. Neither should be hurt by the potential collapse -- not the collapse but the potential collapse -- of a Chinese bank that might still be saved by the Communists.
Nevertheless, that doesn't mean you need to be a hero and buy something on day one. That strategy can be as hurtful as panicking itself, and it's usually fraught, given the tidal wave of futures selling, almost assuredly making you have to take another bite of the apple lower and later. It's still early enough for the most nimble to sell, as we are barely down for the year, and we were up 32% last year.
But day two, tomorrow, that's when it will already be too late to sell some stocks, even as others will most surely fall.