Mad Money

Cramer: Retail's a crapshoot—get out

Cramer: This trade is making me crazy
VIDEO7:1107:11
Cramer: This trade is making me crazy

One thing that absolutely drives Jim Cramer insane these days is the radical inconsistency of retail stocks. This group has become such a crapshoot, it is enough to make him question investing in it at all.

For instance, Burlington Stores used to be one of the most dependable stories out there. It used to be called Burlington Coat Factory, until private equity turned it around and it became more consistent. Yet, despite the work that's been done, it still bombed last quarter, reporting a dramatic deceleration of same-store sales, down to 0.8 percent from 2.7 percent. Wowzer! What a burnout.





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Or how about Five Below, which, according to the charts, historically rallies into the quarter only to crash back down when it reports shockingly bad numbers.

"I don't have enough fingers to count how many times this retailer has caused consternation, if not tears," the "Mad Money" host said.

But then last week it pulled through with an amazing quarter, which Cramer considered to be amazing considering how many investors had given up on it.

Urban Outfitters was another stock that had been on fire in retail going into the last quarter. Finally, its three stores, Free People, Anthropologie and UrbanOutfitters, all fell into place, and Cramer thought it had finally figured out how to fire on all cylinders.

But then the company crushed investors with a huge disappointment in the once-hot Anthropologie three weeks ago and the stock plummeted. How can Cramer trust it now?

Then there was Lululemon, which has a history of conservatively guiding down. Yet, the company reported on Tuesday, and suddenly it was a slam dunk for investors, which explains why the stock rose more than 10 percent.

"After so many weak quarters, I find myself wondering: will Nike step up and buy Lulu before its shares roar higher following what could be a major turn? Or is this merely a one-off good quarter?" Cramer asked.

Kohl's also broke Cramer's heart, as it was one of the greatest department store turnaround stories in ages. The rebirth of the company took the stock to $79 in April, up from $56 in December. But then last month, it admitted that things weren't going as good as they thought, and it dropped back down to $62.

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"I'm telling you, retail is so inconsistent as to drive you crazy, which is really saying something from this mad man," Cramer added.

Investors should look elsewhere, Cramer said, since retail is a crapshoot. At this point, unless there is a special situation—like the amazing turnaround happening with Target, or the long-term growth story happening with drugstores—he would totally bless investors' jump out of the group.

Retail has gotten too hard to profit from, and it's just not worth it anymore, he said.

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