Cramer on Tuesday said Nike cut a wide swatch of negativity through the apparel world when it reported disappointing quarterly results on March 17. The "Mad Money" host thinks Phillips-Van Heusen can stitch things back together, though.
Phillips-Van Heusen did several things to avoid the headwinds that set Nike back. The New York City-based company changed its fabric and raised prices, for example. Sales went up, but costs held steady. In turn, Phillips-Van Heusen raised its guidance for the full-year. Like Polo Ralph Lauren , Cramer thinks Phillips-Van Heusen is in control of its own destiny.
"As we deal with this brave new inflation-ridden world, we are going to have to put everything through the PVH prism of whether the brands are good enough and the management clever and proactive enough to dodge the raw cost bullet. No, we don’t have to decide that raw costs will never go down again. And if they do, the whole apparel business would handily beat the estimates," Cramer said. "We just need to be mindful of who has the smarts and the brands to beat them."
Cramer thinks Nike has the brands, but surpringly, he said it didn't have the brains. Instead of acting on higher raw costs, it went forward with business as usual. In the end, he said that didn't work out so well.
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