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Cramer: Nordstrom is the latest 'retail resurrection'

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Key Points
  • Nordstrom's stock rose as much as 13 percent on Friday after reporting a strong second quarter.
  • "My take? I think this quarter validates Nordstrom's strategy," CNBC's Jim Cramer said. "The company spent a fortune to upgrade everything, especially its digital business, and that was the right call."
  • Cramer believes that the e-commerce platform is driving the change, with Nordstrom reporting that its digital platform makes up almost a third of its sales.
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Nordstrom latest 'retail resurrection,' says Cramer

After Nordstrom's stock soared last week following a strong quarterly report, CNBC's Jim Cramer said the company is the latest retail resurrection, joining ranks that include Walmart.

"Last week was full of miraculous retail resurrections," the Mad Money host said. "There was the incredible blowout from Walmart on Thursday... and then Friday we saw Nordstrom rise from the grave like Lazarus."

The department store chain's stock rose as much as 13 percent on Friday after reporting a strong second quarter. Nordstrom earned 95 cents a share, 11 cents higher than analysts' estimates of 84 cents. Revenue numbers also beat Wall Street estimates, with the company reporting $4.07 billion in revenue versus the $3.96 billion expected by analysts.

But more than beating top and bottom line estimates, Nordstrom's same-store sales growing by 4 percent excited investors, Cramer said.

"My take? I think this quarter validates Nordstrom's strategy," Cramer said. "The company spent a fortune to upgrade everything, especially its digital business, and that was the right call."

The company also increased their full-year guidance on nearly every line item, with the exception of credit cards, which Cramer called "kind of a throwaway."

The good news continued with e-commerce sales up 23 percent year over year, making up more than a third of their sales.

"When you drill down, the real driver here is the e-commerce platform," Cramer said. "Nordstrom's actual store traffic has been pretty consistent over the last several quarters. Their growth is coming from the web, where the company's getting more and more transactions."

Earlier this year, the Nordstorm family was in talks with a special committee advising the company's board to take the retailer private for $50 per share, but those discussions ended in March after the two parties could not agree on a price. Driving the potential buyout was the ability to invest in the digital business without worrying about antsy shareholders.

Although the stock has struggled this year, hitting a low of $45.36 per share in May, Cramer said that he believes that Nordstrom's run last week is only the beginning.

The Mad Money host is waiting for the rest of Wall Street to catch up.

"Only five firms rate it a buy, with 17 holds and two sells," he said. "I think we're looking at a wave of upgrades, which tend to push stocks higher."

Nordstrom's stock closed up 4 percent on Monday.

Disclosure: Cramer's charitable trust owns Nordstrom shares.

WATCH: Cramer explains why Nordstrom has risen from the dead 

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Cramer: Nordstrom is the latest 'retail resurrection'

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