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These two stocks seemed like they couldn't lose, but times have changed.
"For ages, it seemed that beloved brands Michael Kors and Kate Spade could do no wrong as their stocks roared higher," Cramer said. "Yet in a matter of months both stocks have gone from first to worst."
Of course, sometimes declines present opportunities, but not all the time. Is either stock now worth buying into weakness?
Cramer said when Michael Kors reported its most recent quarter in August, the company beat Street sales and earnings forecasts and said same-store sales had jumped 24 percent year-over-year.
However, the stock was slammed due to declining margins as well as language used on the conference call. "Management talked about markdowns and a 65 percent increase in inventory," Cramer said. "That can make people very nervous."
In hindsight management said it introduced fall merchandise too early, before shoppers were ready to buy. In other words, "The problem, in their view, wasn't with the overall business (which earnings confirmed was strong), they just messed up the timing with their fall merchandise."
Does that make the decline an opportunity?
Cramer said it's possible, but added investors should wait until the next quarter to see if the issue was simply timing or something more ominous.
On a positive note, "After the sharp decline the stock now sells for 15.8 times next year's earnings estimates. That's cheaper than the average stock in the S&P 500 despite the fact that Kors is growing much faster than the average stock."
Although Cramer wouldn't buy now, he says, "I do think it's worth waiting until we see the next quarter's results before rendering a final verdict. If this really is a one-off issue involving poor timing, then the stock can absolutely rebound."
is struggling with similar issues as Kors. "That is, Kate Spade also sees its margins getting hurt by markdowns and is struggling in a more promotional environment," Cramer said.
In turn, estimates have taken a hit.
"The company had been forecasting earnings before interest, taxes, depreciation and amortization margin of 25 percent in 2016, but management pushed that number out to 2017 while also forecasting a decline of 125 to 175 basis points in the company's gross margin.
To make matters worse Kate Spade's same-store sales are expected to decelerate down to the high-single digits in the second half of the year.
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All told, "A company with 9 percent same store sales growth is simply worth less than one with consistent 30 percent plus numbers," Cramer said. And because Kate Spade still trades for almost 47 times next year's earnings estimates, "I'd just skip this one altogether."
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