We have a hangover from Covid, which means we just don’t do the things we did during lockdown, CNBC’s Jim Cramer said on Friday.
We are buying fewer personal computers and spending less on our homes, prioritizing travel and leisure instead.
Pets can be subtle victims of today’s “big money, little time” spending mode, Cramer said.
At one point, money didn’t seem to matter when it came to taking care of pets.
“Virtually everything pet-related made fortunes for investors and companies that flocked to the category to take advantage of it,” Cramer said.
While the “humanization of pets” is still up for grabs, not all companies will benefit, Cramer said.
“Now you have to be more selective with the favorite plays,” Cramer said.
Pure pet games like Petco and Chewy have become “two of the most controversial stocks in the entire market,” Cramer said.
Petco still has too much debt as a $2.3 billion company with $4.2 billion in total liabilities, Cramer said. Meanwhile, Chewy is barely expected to break even next year based on pure earnings-per-share numbers, he said.
But if you’re into the pet thing and don’t want to take too many risks, General Mills is an option to buy. The company is a “big security name” if you’re worried about the economy, Cramer said. The pet segment was also instrumental in helping General Mills post the best quarterly numbers of any consumer packaged goods company other than Hershey, he said.
Smucker is also “another good safety play with a pet food kicker” who can work his way higher, Cramer said. The company has doubled down on its pet snack business with Milk-Bone and otherwise touts strong coffee and peanut butter brands.
