Pricing power is what’s allowing many companies — including seven of our Club holdings — to support revenue growth and enhance, or at the very least protect, profitability during an earnings season marked by a still-elevated inflationary environment. When we’re talking about “pricing power,” it’s the ability of companies with strong brands to raise prices without seeing too much impact on demand. In many cases, it’s because consumers, who are also feeling the bite of inflation in their personal budgets, are willing to pay those higher prices because the products are so essential to their everyday lives. And, in times of economic uncertainty, consumers tend to take comfort in their favorite brands. For example, Club holding Procter & Gamble (PG) beat on the top and bottom lines in its fiscal third quarter as price increases enriched profit margins despite a small slip in volumes . Similarly, comparable sales at McDonald’s (MCD) increased by 13% in the first quarter and traffic increased despite increased menu prices. Strategic price hikes at Coca-Cola (KO) resulted in strong Q1 revenue and a muted effect on people’s buying habits. “Some of the best brands in America have been able to push through price increases and have seen favorable demand to where the consumer has responded without too much negativity,” Bradley Thomas, consumer and retail analyst at KeyBanc, said in an interview with CNBC. Cash-strapped Americans are “seeking value,” Thomas added. Remember, value is not always about offering the lowest price, it’s about offering the greatest bang for your buck. The pricing success at P & G, Coca-Cola, or McDonald’s comes down to consumers feeling that they are still getting that value from brands they know and love. Here’s a list of Club holdings with pricing power, starting with a closer look at P & G. PG YTD mountain Procter & Gamble’s stock performance year to date. Procter & Gamble last week delivered quarterly earnings and revenue beats while raising guidance for full-year organic sales growth. The consumer goods powerhouse raised prices across segments, lifting its gross margin by 150 basis points to 48.2% in its fiscal third quarter. P & G reported a 4% increase in fiscal Q3 sales. Organic sales, which exclude the impacts from foreign exchange, acquisitions and divestitures, rose 7%. That increase was driven by a 10% boost from higher pricing. But the Tide, Pampers and Gillette maker’s volume fell 3% as some shoppers traded down to cheaper alternatives. We aren’t concerned since some volume decline is to be expected given the magnitude of the price hikes. Management was able to strike a balance between delivering growth and the best value to customers through its premium products. JNJ YTD mountain Johnson & Johnson’s stock performance year to date. Johnson & Johnson (JNJ)exhibited pricing power during the first quarter in its consumer business, which will be separated later this year and brought public as a standalone company called Kenvue. The unit sales increased 11.4% in Q1, driven by strong pricing actions and healthy demand across its product categories including over-the-counter, skin, health and beauty, and baby care, to name a few. Management during last week’s post-earnings call said its consumer unit, post-separation will be even more competitive. The company’s pharmaceuticals and medtech divisions, which drive a majority of revenue, will remain, and they will keep the Johnson & Johnson name. LIN YTD mountain Linde’s stock performance year to date. Industrial gas giant Linde (LIN) is our way to play decarbonization in an economy focused on clean energy initiatives, and it’s another Club holding that has pricing power. The company produces, processes, and sells different kinds of gases used in a variety of industries including healthcare manufacturing, food, beverage carbonation, steel making, and aerospace. Due to the complexity of the supply chain, Linde has the distinct advantage of contractually passing on additional costs to its customers. This prevents profits from being crunched by higher energy prices and allows Linde to deliver consistent future cash flow and strengthen its earnings power. In its latest earnings, out Thursday, the company said volumes were flat but its price and mix contributed 8% to the top line. Halliburton HAL YTD mountain Halliburton’s stock performance year to date. Halliburton (HAL) on Tuesday announced strong financial performance in the U.S., and international markets in Q1. Total revenue rose 33% year over year while earnings per share more than doubled on an annual basis. The top and bottom-line beats were accompanied by strong operating margin performance and operating cash flow. The oilfield services company has benefitted from an increase in inflation, which has partly resulted from higher energy prices this year. “Pricing continues to trend up for all product lines in all regions,” Halliburton CEO Jeffrey Miller said on the call. Sustained customer demand was also a crucial factor of growth for the quarter. Halliburton has exhibited strong pricing power due to massive demand from global end markets, benefitting from years of under-investment in drilling. AAPL YTD mountain Apple’s stock performance year to date. Apple (AAPL) is another Club holding with pricing strength. In addition to premium prices on its hardware devices, the iPhone maker increased its subscription rate for its streaming service by 40% in November 2022. The monthly price for Apple TV+ rose to $6.99 from its previous $4.99. When Apple TV+ was first rolled out, it only had a few shows and movies, and the price tier was a more affordable option. A few years after its 2019 launch, the platform now has a wider selection of documentaries, films, and TV series in many categories. At that time, the company also increased prices for its Apple Music service to $10.99 from the prior $9.99, in addition to its Apple One bundle service, which hosts these plans among other services to $16.95 from $14.95. When it reported its fiscal first quarter in February, Apple delivered a new record for Services revenue of $20.8 billion despite the difficult macroeconomic backdrop. Apple is out with its latest quarterly next week. MSFT YTD mountain Microsoft’s stock performance year to date. Earlier this year, Microsoft (MSFT) announced changes to global pricing for its cloud services, effective April 1. Microsoft’s cloud offerings, which include Microsoft 365 and Azure, are 9% more expensive in the U.K., and 15% more expensive for customers in the European Union. Microsoft said this price hike is an effort to “align the pricing of our Microsoft Cloud products globally.” Looking ahead, the company will “assess pricing in local currency as part of a regular twice-a-year cadence, taking into consideration currency fluctuations relative to USD [dollar].” While its cloud growth slowed during its fiscal third quarter , rising 27% compared with 31% growth in the prior quarter, the company said Azure took market share, attracting more customers to its AI-powered applications. CAT YTD mountain Caterpillar’s stock performance year to date. During its first-quarter earnings results, out Thursday, Caterpillar (CAT) delivered solid year-over-year revenue growth in each of its product segments, along with meaningful margin expansion. Management said the strength was driven by “favorable price realization and higher sales volume.” Its Construction Industries unit saw sales up 10% and profit margins grew to 26.5% from 17.3%, fueled by stronger pricing and strong demand in both residential and non-residential markets in the U.S. Caterpillar’s latest report shows how its business is benefitting from strategic pricing, which offset costs. (Jim Cramer’s Charitable Trust is long PG, JNJ, LIN, HAL, AAPL, MSFT, CAT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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A grocery cart sits in an aisle at a grocery store in Washington, DC, on February 15, 2023.
Stefani Reynolds | AFP | Getty Images
Pricing power is what’s allowing many companies — including seven of our Club holdings — to support revenue growth and enhance, or at the very least protect, profitability during an earnings season marked by a still-elevated inflationary environment.
Say what you will about Elon Musk, but Tesla has changed the way that millions of people buy cars and, by extension, car insurance. Now, Honda is taking a page from Tesla’s successful playbook and launching its own in-house insurance business. Enter: Honda Insurance Solutions.
Honda Insurance Solutions is being launched as a fully licensed insurance agency serving the insurance needs of Acura and Honda customers, but it’s not stopping at competitive pricing and coverage options for Honda cars and motorcycles. Honda Insurance Solutions promises to go several steps beyond Tesla’s offering with coverage for trailers, RVs, homes, and even pets.
“Honda Insurance Solutions offers customers access to coverage through a brand they know and trust,” says Petar Vucurevic, President, American Honda Insurance Solutions, LLC and Senior Vice President, American Honda Finance Corporation. “Insurance is a key touchpoint in the vehicle ownership journey, and we aim to deliver a superior experience tailored to the unique needs of each customer, while promoting safer driving and increased peace of mind on the road.”
The company says the launch of its new insurance business is just part of Honda’s broader digital vehicle sales platform strategy, with future plans to integrate insurance offerings into new products.
What Honda is doing right now is deepening relationships with its existing customers and finding ways to make money on products it hasn’t sold them – whether that’s the Harley parked in the garage next to their Prologue or the garage itself.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
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Nobody ever says “this is business” before doing something nice, and the recently reborn Lion Electric company is keeping that streak alive by doing the unthinkable to cut costs: they’re going to void the warranties on hundreds of electric school buses.
In a letter issued to exiting Lion Electric customers last week, Deloitte Restructuring announced that the warranties on all Lion vehicles purchased outside of the company’s home Province of Quebec are null and void – leaving dozens of school districts in the lurch with stranded assets that won’t get fixed, and can’t be sold to generate funds for replacements.
“We are working with alternate vendors at the expense of the school district to help keep our electric buses functional and on the road,” explains Dr. Richard Decman, Superintendent of Herscher CUSD No. 2 district in Herscher, Illinois. “Currently, six of our 25 (Lion) electric buses need some type of repair.”
Student Transportation News reports that Lion buses represent fully half of Herscher’s overall fleet of 50 buses, and that the district has received nearly $10 million for the purchase of 25 electric buses and the related charging stations from various state and utility incentive programs.
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Herscher isn’t the only district having problems with Lion buses. “All four Lion buses that we own are currently parked and not being used,” Coleen Souza, interim transportation director of Winthrop Public Schools, told Clean Trucking. “Two of them are in need of repairs which would cost us money which we are not willing to invest in because the buses do not run for more than a month before needing more repairs.”
More of the same in Maine, where Yarmouth School Department bought two Lion Electric buses in 2023 with the state covering the costs. According to Superintendent Andrew Dolloff, the buses almost never worked. “We’ve had some sporadic service over the past two years, but as soon as the tech leaves, the buses produce error codes again,” explained Dolloff. ” and “Then the technician quits or is released, and we wait a few months for the next response.”
Dolloff added that Yarmouth’s electric buses did not operate during the 2024-25 school year.
Lion’s new owners are seemingly uninterested in their customers’ plight – which might be easily dismissed if those new owners, Groupe MACH, weren’t also the old owners of Lion Electric.
That’s right, kids. Quebec-based real estate company Groupe MACH, which stepped in to “save” Lion Electric earlier this summer, along with Ontario-based Mirella & Lino Saputo Foundation, bought $90 million of equity in Lion Electric back in 2023. And, while the MACH people may not have been the ones who ultimately made the call about voiding the warranties (that decision was made by the Deloitte bankruptcy team), it is absolutely Group MACH who have, to date, not announced plans to continue to honor those warranties, either.
Make of that what you will.
Deloitte Lion letter
SOURCES: School Transportation News, Clean Trucking, Deloitte.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links.More.
We recently had the opportunity to test out Retrospec’s Beaumont Rev 2 electric bike. This Class 2 electric city bike is as stylish as it is functional. Despite its streamlined design, the Beaumont Rev 2 is sneaky fast with quality components throughout. Be sure to check out our full video review below.
Our latest product review came through Retrospec – a veteran micromobility company dedicated to delivering affordable, high-quality, adventure-ready eBikes without compromising performance or style.
According to Retrospec, its products aim to “make nature second nature” by offering accessible, high-quality gear that encourages people of all ages and abilities to enjoy the outdoors to “make nature second nature” by providing accessible, high-quality gear that encourages people of all ages and abilities to enjoy the outside world.
Designed for adventure and built to last, Retrospec prides itself on delivering mobility products look great, perform flawlessly, and stand up to the test of time. A fine example of this company ethos is the Beaumont Rev 2 electric city bike.
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The Beaumont Rev 2 has already gone viral as Retrospec’s number one best seller. It initially caught our eye because it combines a stylish vintage look of classic bicycles with modern tech to cruise quickly and easily.
We recently had an opportunity to take one of these eBikes out and have plenty to say about it.
Upon first ride, you can’t ignore the classic style of this eBike, which looks and feels super light, similar to a conventional bicycle. However, with one press of the throttle, you get a feel for the function and versatility of the Beaumont Rev 2, which was designed by Retrospec specifically for city riding.
The bike’s powerful rear hub motor is supported by a Shimano MegaRange drivetrain that can easily be switched between seven different gears with your right hand.
The electric motor offers five different levels of electric pedal assist and an easy-to-use throttle on the left handlebar (pictured below). As a Class 2 eBike, the Beaumont Rev 2 can cruise to assisted speeds as high as 20 mph. The bike itself is powered by a UL2849-Certified Battery that offers riders a range of up to 38 miles on a single charge.
If you encounter dirt or debris on your journey, you’re protected by full-wrap front and rear fenders. Other features of the Retrospec Beaumont Rev 2 include front and rear lights, a rear cargo rack, and Tektro mechanical disc brakes (pictured above).
Combined with the padded saddle seat and swingback handlebars, the Beaumont Rev 2 is as comfortable and supportive of a ride as it is functional.
As an urban-style e-bike, the Beaumont Rev 2 isn’t necessarily built for off-road riding, but as you’ll see in the video below, there were a couple of times I cut through some grassy terrain to get on and off the bike path, and the bike fared just fine.
I truly enjoyed the smooth comfort of this unique, Euro-style step-through bike thanks to its wide, high-volume city tires. It also feels like it rides a lot faster than 20 mph due to its light frame and best-in-class powertrain components.
While the Beaumont Rev 2 comes with the above mentioned accessories, Retrospec sells many compatible add-on components, including helmets, baskets, trailers, bike bags & panniers, air pumps, and car racks. In addition to the Beaumont Rev 2, Retrospec offers a growing lineup of all-electric city bikes. We highly recommend checking those out to find the right bike for you.
Retrospec also offers a range of other eBike categories, including fat tire electric bikes, electric beach cruiser bikes, electric commuter bikes, electric trikes, and more. All Retrospec eBikes are UL2849 certified, feature sleek and stylish designs, and employ the most modern eBike technology to make riding an absolute blast. Check out the full lineup here.
If you’re interested in riding in style on Retrospec’s best-selling Beaumont Rev 2 eBike, you can purchase one here. This blend of classic and modern is available for just under $1,000, making it one of the most affordable options in its class.
To learn more about this stylish electric city bike, be sure to check out our full video review below.