Mad Money

Cramer finds 3 retailers that can win in this new Amazon-plagued environment

Key Points
  • "Mad Money" host Jim Cramer reveals three retailers that can buck Amazon's takeover: TJX, Urban Outfitters and Target.
  • To fend off Amazon, TJX is using experiential opportunities and low prices, Urban Outfitters is succeeding in fashion, and Target is growing its digital and apparel arms, Cramer says.

As major U.S. retailers continue earnings season with their quarterly reports, Jim Cramer spotted some that managed to fend off the storm cloud that is e-commerce giant Amazon.

"Despite the endless onslaught from Amazon, not every retailer is rolling over here. We're starting to see some chains that can actually compete, that can even win, in this difficult new environment," the "Mad Money" host said.

Cramer started with TJX Companies, an off-price retailer that beat Wall Street estimates with its second-quarter results, raised its full-year guidance and saw its same-store sales, a key metric for the retail sector, grow by 3 percent.

"TJX put on a clinic about what you can do to beat Amazon: experiential opportunities, treasure hunt environment, lower prices for branded goods than the online colossus can offer," Cramer said.

On the earnings conference call, TJX CEO Ernie Herrman said the results gave management "confidence in [their] long-term global store growth potential" and announced the brick-and-mortar chain's intention to open 260 more stores in 2017 and up to 1,700 in the years to come.

Cramer was also impressed with Anthropologie parent Urban Outfitters, which topped analyst estimates with its second-quarter earnings report. Shares surged over 20 percent in premarket trading on the news.

While Urban's CEO, Richard Hayne, said in a statement that management was "disappointed" with the results, Cramer said the company's improving same-store sales, which decreased by 4.9 percent overall but came in positive for Urban's Free People brand, were a good sign.

"Urban is a fashion player. The right fashion can still win," the "Mad Money" host said.

Finally, Cramer turned to Target, which achieved 32 percent growth in its digital segment — the best Cramer has seen so far this earnings season.

Target's second-quarter earnings report also showed strong results for apparel, driven in part by the $2 billion in sales that came from Target's successful Cat & Jack product line.

"I was also impressed with its new small format stores ... [and] the movement into college campuses that [Target CEO Brian] Cornell promised — it's happening, it's working — as well as the electronics section, which had been disappointing in the recent past," Cramer said.

Revenue from the beloved Nintendo Switch console and the Apple Watch likely helped Target turn its fate around in the electronics aisles, the "Mad Money" host added.

And if Cornell lowered the Street's expectations to manageable levels so that his company could top them, Cramer sure didn't mind.

"I never mind when execs practice UPOD, under-promising and over-delivering," Cramer said. "It matters."

So while some seemingly Amazon-proof retailers like Home Depot may get sent to the doghouse despite their solid second-quarter earnings, Cramer is sticking with these three buys.

"My take? TJX barely moved on its excellent quarter, which makes it a screaming buy. I think it actually returned many more points. Urban moved a great deal, but it's got room to run. And Target, with its 4.4 percent yield? It works fine for me, too, at least for now," Cramer concluded.

Watch the full segment: Cramer's retail winners

Cramer finds 3 retailers that can win in this new Amazon-plagued environment

Disclosure: Cramer's charitable trust owns shares in TJX Companies.

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