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Are Trade-Down Stocks Still Working?

By this point in the recovery cycle, with retailers like Tiffany , Saks , Coach and Polo Ralph Lauren at or near their 52-week highs, you’d think the trade-down plays would be out of style. But Family Dollar’s still soaring even though consumers are willing to spend more money.

FDO is up 35% since Cramer’s Nov. 6 recommendation, and just last week the company beat the Street’s earnings estimates and upped its guidance for the next quarter and the full year. Cramer attributes the success to a new store layout, longer hours of operation and the acceptance of new payment methods, such as food stamps and credit cards. Plus, Family Dollar is looking to boost its private-label offerings to take advantage of their higher margins.

So we know FDO is working, but will the run continue? And is the move so far due to company initiatives or still-cautious consumers? Cramer invited CEO Howard Levine on to Mad Money to find out. Watch the video for the full interview.

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