Cramer: Despite founder Chip Wilson's pessimism, Lululemon is a buy

In an exchange with Lululemon Athletica founder Chip Wilson on Wednesday, Jim Cramer was advised by Wilson that he has set the bar too low for the company.

On CNBC's "Squawk on the Street," the discussion began with Cramer stating that he thinks Lululemon's management has done a good job, and ended with Wilson advising Cramer that he has let the company off the hook by setting the bar too low.

"I did think Mr. Wilson's position toward my view was ill-advised. I try to set the highest bar there is, a virtual pole vault, when other seek only the high jump," the "Mad Money" host said.

Cramer considered the case to be clear-cut. He held up research containing bullish analysis of Lululemon's most recent quarter, yet Wilson claimed Cramer was missing the point.

However, an 8 percent rise in total same-store sales is still better than any other retailer or apparel company Cramer follows, with the exception of Ulta Salon.

Chip Wilson, founder and former CEO of Lululemon.
Adam Jeffery | CNBC
Chip Wilson, founder and former CEO of Lululemon.
"I can tell you that only Ulta surpasses Lululemon's game. To me, that says it's a buy, not a sell." -Jim Cramer

Cramer thought Wilson disregarded the fact that companies like Nike and Under Armour have suffered stock declines by 13 and 8 percent for the year, while Lululemon is up 34 percent.

Ultimately this dialogue proved to be constructive to Cramer in many ways.

First, it showed just how hard it is to make money as an investor. It was just a few weeks ago that Wilson appeared on "Power Lunch" and did not provide constructive feedback on the company. Yet, Lululemon managed to report a stellar quarter since then, and the stock has risen ever since.

"You would think that the founder, who has two people on the board, would have better sense than to come on air and trash the company ahead of an excellent quarter. He really threw you off the scent," Cramer said.

Secondly, all business is relative. Yes, Cramer agreed that Lululemon should have been bigger by now. It was clear to him that the new CEO inherited more damage than initially anticipated, and it has taken longer to turn the company around. Still, numbers don't lie, and the company is still beating almost everyone in the group.

Finally, Cramer found that the notion that any Lululemon weakness stems from the board as being absurd. With the numbers that the company has produced, there was no fault to be found.

"I can tell you that only Ulta surpasses Lululemon's game. To me, that says it's a buy, not a sell, and Mr. Wilson should go pick on someone else," Cramer said.

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