Jim Cramer says the theory that brick-and-mortar retail are losers that cannot overthrow Amazon is completely wrong.
"The conventional wisdom about shopping has been totally wrong … This past quarter put the lie to that supposition in so many ways," the "Mad Money" host said.
Amazon's $50 billion in domestic sales in the past year was an indicator to Cramer that there is market share for everyone, as the U.S. had $4.71 trillion in retail sales during the same time period.
Brick-and-mortars, which once seemed like zombies, once again have a pulse.
"That is why we need to bury the whole 'death of the mall' narrative right this minute, because so many mall-based stores put up good numbers with good commentary," Cramer said.
This quarter was unique for retail because it was neither a promotional quarter — meaning there were no events like back-to-school season that called for markdowns —and the quarter was not plagued by a weary consumer. The U.S. consumers shopped, they were just picky about where they spent money, Cramer said.
After reviewing the quarters of various retail companies, Cramer identified several trends to figure out what worked and what did not.
First, the excitement for fashion was back. This was evident in the success of Nordstrom's anniversary sale, prompting the company to report better-than-expected earnings. Urban Outfitters CEO Richard Hayne commented on Urban's conference call that he "saw more fashion excitement in the spring than he had seen in quite a few years."
"That is one of the reasons I expect Lululemon to report a strong number September 1," Cramer said.
J.C. Penney was a classic example of a mall comeback story. Lean inventory, solid sales and strong cash generation were all reported in its latest quarter. Cramer suspected that the red-hot housing market could be bolstering J.C. Penney sales as more consumers invest in their homes.
"Penney sounded not like the Penney of old, but much better than the old Penney before it was almost destroyed by terrible management," Cramer said.
The ultimate comeback in retail, though, was Wal-Mart. From Cramer's perspective, the turnaround really began when CEO Doug McMillon announced the company would increase the pay of its employees. Before the announcement, employees were leaving to work for the competition, and endless training dragged on its bottom line.
So, while some may think that a better supply chain, strong online offerings or its acquisition of Jet.com are behind the comeback, Cramer thinks it was really the re-energized workforce.
The two most worrisome retailers to Cramer were Macy's and Target. They seemed out of step. He was stunned by Target's CEO Brian Cornell when he blamed Apple merchandise and the new in-store CVS locations for some of the weakness.
"Let's stop talking about the death of the mall or the waning days of bricks-and-mortar, and instead celebrate those who are fighting back … the ones who aren't bemoaning the American consumer, because business is just too strong to keep whining," Cramer said.