Jim Cramer congratulated critics and short-sellers for missing the boat on Lululemon.
Shares of Lululemon rose 15 percent Thursday after reporting better-than-expected earnings and providing an optimistic outlook.
"I believe the main reason the analysts got it wrong is because Lulu is, indeed, bigger than a brand. Lulu stands for something," the "Mad Money" host said.
Cramer said he was astounded by CEO Laurent Potdevin, and how much he understands the way young people think. In a September interview with Cramer, Potdevin explained that people shop at Lululemon because of the culture of health and sustainability.
While Wall Street may laugh at the concept of mindfulness, it was clear that this was exactly what Lululemon customers craved.
"They, not Wall Street, determine the numbers," Cramer said.
For months, Cramer heard analysts say that Lululemon's time had come and gone because the athleisure market was saturated and no longer cutting edge.
This is what Cramer refers to as "thesis reporting." Analysts simply looked at weak sales figures from Lululemon's competitors and concluded that shoppers no longer purchased the merchandise.
This was especially true when PVH Corp reported strong denim growth in its Calvin Klein jeans brand. Analysts assumed that this meant there was a broad switch to denim and that Lululemon was dead.
"Here's what these critics and their short-selling buddies missed: maybe all those missing sales from the other athleisure plays are going to their main competitor, Lulu," Cramer said.
This was evident in Lululemon's staggering 34 percent earnings-per-share growth and 7 percent same-store-sales growth.
Ultimately, innovation was only part of why Lululemon did so well, Cramer said. The company is more than just a brand. It's a metaphor for how people live their lives and move.