CNBC Investing Club: Cramer’s Morning Take on Costco 5/29/26

SPEAKER_1 (0:00)

Dell PCs with Intel Inside are built for the moments you plan and the ones you don't. They're for those all-night study sessions, the moment you're working from a cafe and realize every outlet's taken, the times you're deep in your flow and can't be interrupted by an auto update. That's why Dell builds tech that adapts to you, built with long-lasting battery so you're not scrambling for an outlet, and built-in intelligence that makes updates around your schedule, not in the middle of it. Find technology built for the way you work at dell.com/dellpcs, built for you.

SPEAKER_2 (0:30)

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com/marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts.

Jim Cramer (1:01)

Jim Cramer here to share a short preview of my take on the market from today's members-only CNBC Investing Club morning meeting. Join the club for full access to the morning meeting every day at 10:20 a.m. Visit cnbc.com/morningtake to sign up today. That's one word, morning take.

I want to go right there with Kevin because he and I worked toe-to-toe on this one with Costco. Stock's getting hit very badly. There are some things that are wrong here.

Jeff Marks (1:30)

Yeah, the membership growth 4.1% overall is getting a lot of attention. I think people are maybe looking to see a little bit more, as are we, frankly. Yes, we are. We do want to see that be a little bit higher, but I think that's kind of pulling it down. We're also seeing Walmart and Target are down today too, so not a great day for retail overall. But the thing with the membership growth that Jim and I were talking about this morning is interesting and a little bit of a silver lining was the growth of the executive level. This is the more premium tier and they're seeing strong growth. That was about like 9 percent in the quarter. That was something that makes them feel overall healthy.

Jim Cramer (2:05)

But at the same time, the interchange between the analysts and the CFO was very suboptimal because the analysts were all trying to figure out something's going wrong here and the company was saying, no, we've got good buys, things are like that and they were really talking at cross purposes. The reason they were is that the analysts tried to build a model, and the model is really substantively based on dues.

If you're not getting the re-ups, if you're not getting the new people coming in, then these analysts grow very negative. It doesn't matter how much cash they have, doesn't matter how much merchandise they sold. Analysts are not wrong. It does matter.

Jeff Marks (2:42)

The membership fee income is about half of operating income, give or take a little bit. That is why it's important and will matter to the stock, particularly at the valuation that it trades at. Any sort of imperfection.

Jim Cramer (2:53)

45 times earnings.

Jeff Marks (2:55)

Now, on the positive side though, what did you think about them sticking to that message around value and first to cut prices and last to raise?

Jim Cramer (3:02)

Now, here's what, there used to be the previous CFO, Richard Glanty, would I think of explained everything in real and been able to tell a pretty positive story and emphasize that, look, here's the things that we're doing on to get the 4.1 to 5 or 6 Here's what we're doing to get online better.

But there was no recognition that things were a riot all. And that did bother me. When you have something that sends a stock down this much, you better come up with answers. I interviewed Richard Dixon from Gap for tonight's show.

And Richard said, OK, it's my fault. I did some things wrong. I missed fashion. I got dresses wrong. He did not say the environment and did not offer excuses that there were things wrong in tariffs. He just owned it.

SPEAKER_5 (3:57)

All opinions expressed by Jim Cramer on this podcast and in connection with the CNBC Investing Club are solely Cramer's opinions and do not reflect the opinions of CNBC Investing Club, or its parent company or affiliates, and may have been previously disseminated by Cramer on television, radio, internet, or another medium. No specific outcome or profit is guaranteed in connection with your reliance upon or other use of the content from Cramer. The opinions offered in connection with this podcast and the CNBC Investing Club are not an attempt to induce any particular trading behavior, investment, or strategy. To view the full CNBC Investing Club disclaimer, please visit cnbc.com/investingclubdisclaimer.