Cramer Remix: Lululemon still has more room to run

  • CNBC's Jim Cramer details why the standout retailer is worth buying into any weakness.
  • The "Mad Money" host also sits down with the CEOs of RH and Honeywell International.
  • In the lightning round, Cramer reveals a key level for Western Digital's stock.

Lululemon Athletica's late-August earnings blowout — which sent the stock up 13 percent the following day — was "stunning" to witness for CNBC's Jim Cramer.

"We've seen a lot of great retail quarters this earnings season, but LULU puts them all to shame," the "Mad Money" host said Wednesday, comparing the results to "a pitcher throwing a perfect game in baseball."

The most impressive part? Lululemon, which delivered strong results for its digital business, same-store sales, store traffic, male shoppers and China branches, did it all without a CEO at the helm.

"As far as I'm concerned, this team has proven they can do the job without a CEO," Cramer said in a playful nod to Lululemon's newly chosen CEO, Sephora veteran Calvin McDonald.

"Lululemon is firing on all cylinders and I think the stock still has more upside," the "Mad Money" host told investors. "It's not exactly cheap anymore at 37 times next year's earnings estimates, but I think LULU's absolutely worth buying into any weakness like, say, the weakness we had today."

Understanding sector rotations

Sheryl Sandberg, Facebook COO, and Jack Dorsey, Twitter CEO,  off camera, testify during a Senate (Select) Intelligence Committee hearing in Dirksen Building where they testified on the influence of foreign operations on social media on September 5, 2018. 
Tom Williams | CQ-Roll Call Group | Getty Images
Sheryl Sandberg, Facebook COO, and Jack Dorsey, Twitter CEO, off camera, testify during a Senate (Select) Intelligence Committee hearing in Dirksen Building where they testified on the influence of foreign operations on social media on September 5, 2018. 

Cramer's all too familiar with the fact that even the best stocks don't go up in a straight line.

So as the tech sector weighed down the Nasdaq and S&P 500 on Wednesday, he went over the concept of rotations — when investors swap out of one stock group and into another — and how homegamers can use them to their advantage.

First, he pointed out that sector rotations are inevitable. No one stock group can soar endlessly without running into obstacles, even if those obstacles have little to do with what drives the stocks themselves.

For example, the tech-heavy Nasdaq has climbed nearly 16 percent since the start of 2018 — better than any other major index in the world — thanks to the strength of FANG, Cramer's acronym for the stocks of Facebook, Amazon, Netflix and Google, now Alphabet, and other big-name tech plays.

That 16 percent gain is reason enough for a drop in the Nasdaq, Cramer argued, especially in the month of September, which tends to bring bouts of selling.

For the rest of Cramer's breakdown — and how investors can put it to work — click here.

RH CEO on 'the lost decade of retailers'

Gary Friedman, CEO, Restoration Hardware
Scott Mlyn | CNBC
Gary Friedman, CEO, Restoration Hardware

Traditional retailers racing to stake their claim in the e-commerce market are causing "clutter" in the broader retail industry, Gary Friedman, the chairman and CEO of RH, told CNBC on Wednesday.

"I think it's going to be seen as kind of the lost decade of retailers," Friedman said in an interview with Cramer, adding that with "the capital allocation over the last 10 years and people creating an unnatural shift to move their business online, there's massively deteriorating operating margins."

With Amazon on its way to capturing nearly half of the U.S. e-commerce market, the scramble among big-box and specialty retailers alike to sell their products online has led to a significant uptick in the industry's e-commerce spending.

From Walmart doling out $3.3 billion to buy Jet.com in 2016 to longtime staples like Kroger partnering with e-commerce giant Alibaba, it's clear that retailers are following the money — but for Friedman, online is just like any other outlet.

"We do over $1 billion online. You know, people think, like, 'He talks about retail stores, he doesn't believe in online,'" Friedman lamented, speaking from RH New York, the company's newest gallery. "Online's just another channel."

To watch and read more about Friedman's full interview, click here.

Honeywell CEO talks growth, spin-offs

Darius Adamczyk, CEO of Honeywell
Adam Jeffery | CNBC
Darius Adamczyk, CEO of Honeywell

With the rise of e-commerce in full swing, Honeywell's 2016 acquisition of the automaton-focused Intelligrated is paying off in droves, Honeywell International Chairman and CEO Darius Adamczyk told CNBC on Wednesday.

In an exclusive interview with Cramer, Adamczyk, who took the helm of the sprawling industrial last year, touted Intelligrated's warehouse automation segment, which serves high-profile clients including Amazon.

"It's been just a terrific growth business. I mean, when you think about 50-, 100-percent booking rate increases, top-line growth of 20 percent plus, I think it's very, very exciting," the CEO said. "This is a nice pickup for us because it's coming at the right time."

While Honeywell's organic growth has remained intact, questions have been swirling about the timing of Adamczyk's widely publicized plan to split Honeywell into three parts.

The uncertainty has caused some gyration in Honeywell's stock year to date, but thanks in part to Intelligrated's fast-growing business, Honeywell's quarterly results have been steadily improving.

To watch the interview and get more about Adamczyk's plan for the $40 billion conglomerate, click here.

Jobs and trade: Why Friday could weigh on stocks

President Donald Trump in the Oval Office at the White House in Washington, DC, on September 5, 2018. 
Nicholas Kamm | AFP | Getty Images
President Donald Trump in the Oval Office at the White House in Washington, DC, on September 5, 2018. 

Friday will bring what should be a strong jobs report from the U.S. Labor Department — but a good number could set off an unpredictable risk for the stock market, Cramer warned on Wednesday.

"I'm actually afraid of getting a strong employment number on Friday," he confessed. "Why? Not because it'll encourage the Fed to tighten, but because I think it'll embolden President Trump to keep escalating the trade war, or at least the trade war of words."

The "Mad Money" host spoke from experience. On past days where the Labor Department put out strong reports, Trump used the strength of the economy to express his frustration with the United States' trading partners on Twitter for what the administration has labeled unfair trading practices.

So "be ready for a Twitter-induced sell-off if we get a fabulous employment number on Friday," Cramer told investors, adding that they should steer clear of stocks like the industrials, which are fueled by economic strength, after Friday's report. "In keeping with the start of the NFL season, I can only call this trash talk — Trump loves to talk trash."

Lightning round: The key level for Western Digital

Western Digital Corp.: "[My charitable trust] sold it in the $90s and $80s. Why? Because the cycle has gotten weak. We'd like to see the numbers come down – we think that they have to – and only then will the stock bottom."

British American Tobacco PLC: "The only thing that would make me be interested in that stock, frankly, is if they were going to take a position in Tilray, if they were going to take a position in one of these cannabis stocks, and I don't think they're going to. So, therefore, I say don't buy."

Disclosure: Cramer's charitable trust owns shares of Facebook, Amazon, Alphabet and Honeywell.

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