(VitalNews.org) – Jim Cramer, from CNBC, said that many companies won’t admit they are in trouble due to continuous economic trends.
Cramer asked, “If companies would just own up to their changing circumstances, things would be so much easier for everybody. But who wants to admit that they made mistakes?”
He continued, “If they’d just own up, I think they’d earn a lot of credibility for themselves, leading to higher stock prices down the line. Instead, their stocks languish, as investors try to assess what’s really going on, and they presume the worst, not the best.”
Cramer specifically mentioned some food and beverage companies that aren’t acknowledging the popularity of GLP-1 weight loss drugs and that this could be hurting their business. These treatments have encouraged people to stop eating as much junk food and to drink less alcohol.
He talked about the maker of Jack Daniels and how they missed estimates by twenty-three percent; also the spirit company Diageo had sales go down fourteen percent.
These companies don’t realize that they need to lower prices in order to attract customers while dealing with inflation. Only a few companies have lowered their prices since COVID-19.
Walmart and Costco are doing much better than their retail peers because they’ve rolled back prices since the end of the pandemic.
Cramer said, “Maybe they think if they ignore the problems, they’ll go away. Let me ask you: ‘Has that ever worked for you?’” He added, “Denial is a powerful defense mechanism, but it is a terrible way to run a business.”
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