Trying Cramer's Fave Retail Stock on for Size
With concerns over how badly the consumer could be hurt by a double-dip recession, some investors may be tempted to avoid retail stocks all together. But in Cramerica, that's not an option.
"Nobody ever made a dime from panicking," Cramer said Tuesday. "Blowing out of all things retail because of slowdown worries is the definition of panic. You have to be opportunistic."
Consider retail stocks on a case-by-case basis and buy the high-quality names on a pullback, said the "Mad Money" host. Take Phillips-Van Heusen , for example, which is one of Cramer's favorite retail names. Thanks to a $3 billion acquisition last May, it now operates the Tommy Hilfiger brand, in addition to Calvin Klein, Van Heusen, Arrow and Izod. Not including the Hilfiger brand, the company controls 45 percent of the dress shirt market and more than half of the necktie market in department stores. PVH also has 650 stores across the US.
When Cramer last spoke with Phillips-Van Heusen's CEO Emanuel Chirico in November 2009, its stock was trading at $41.79 a share. It's up 22 percent since then, while the Standard & Poor's 500 Index is flat over the same period. The stock has declined by 15 percent, however, since Cramer recommended PVH in April.
After the closing bell Tuesday, Phillips-Van Heusen reported its first full quarter since the Tommy Hilfiger acquisition. The company "blew away the numbers," Cramer said, with earnings per share coming in at 72 cents for an 18 cent beat on better than expected revenues that more than doubled from the year before. To further examine the latest quarter, Cramer spoke with Chirico about what's working for this retailer. Watch the video to see the full interview.
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