Cramer Likes Kohl's

Retail might be trading down on the whole, but there are individual standouts that could turn up nicely if the Federal Reserve cuts rates, Cramer said. And that’s because despite this awful environment, the companies are still executing.

Take a look at Kohl’s. It has dropped 28% since its April 20 high, but the last reported quarter showed sales up 8.7%, earnings were a penny ahead of the consensus and the margins expanded.

Same-store sales were up 1.3% as well, and that’s not bad for a big, maturing store like Kohl’s, Cramer said. Even better, though, is the fact that the price-to-earnings multiple is just 13 times forward earnings even though the long-term growth rate is 18%. Cramer’s rule of thumb is that when the multiple is well below the growth rate, the stock should go higher.

The company has some great catalysts too. Kohl’s is moving toward selling private-label and licensed products, which carry much better margins. Simply Vera by Vera Wang is the biggest brand launch in the company’s history, and Cramer doesn’t think it’s yet priced in the stock. Also, Kohl’s is coming out with Food Network-branded products.

“Kohl’s is a great retailer. It deserves to be bought,” Cramer said – as long as the Fed eases rates.

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer

    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.

Mad Money Moments

Cramer's New Book