Lululemon, Yeti Holdings, Crocs are all ‘retail winners’

Department store operators like Macy’s may be struggling after a weaker-than-expected holiday season, but other, more focused retailers are thriving, CNBC’s Jim Cramer said Wednesday after a positive day for the major averages.

“The department stores may be in rough shape here, but that’s just because people are buying stuff online or from stores that are much more fun to shop at,” he said. “Other companies in different areas are doing really, really well.”

The “Mad Money” host highlighted three “retail winners” that have been outperforming their somewhat fragmented sector: sportswear retailer Lululemon Athletica, outdoor gear seller Yeti Holdings and footwear maker Crocs.

Lululemon, Cramer’s favorite of the group, recently raised its fourth-quarter outlook, saying it had the best holiday season in six years. Despite some market weakness, the yoga-inspired retailer has been on a steady, multi-year climb.

“Lululemon remains a fabulous growth story: the company’s putting up new stores at a rapid pace, and now they’re doubling down on the international expansion,” Cramer said, adding that the company’s e-commerce business “is absolutely on fire.”

“I’ve liked this stock for ages, and even though it’s run dramatically over the last few weeks, I think it’s a buy here,” he said. “I know, [it’s trading at] 27 times next year’s earnings estimates. Doesn’t matter. Remember: we like growth in Cramerica.”

Yeti, which makes durable coolers, drinkware and other camping and outdoor gear, went public at the end of October — “just about the worst possible time for an IPO,” Cramer said. The stock immediately got crushed, but Cramer saw something special in Yeti and blessed it for speculation shortly thereafter.

And while he spoke too soon, Yeti also raised its outlook last week, citing faster sales growth thanks to the power of its direct-to-consumer business.

“What can I say? I like Yeti a lot here, but we obviously don’t have the best track record with this one,” Cramer admitted. “Still, with the stock trading at less than 15 times next year’s earnings estimates, I think this is a steal. Yeti has 22 percent sales growth, for heaven’s sake. The valuation for Yeti is crazy.”

The “Mad Money” host was a little less bullish on Crocs even though the funky shoe retailer has also pre-announced strong first-quarter results.

“While the fourth-quarter numbers were amazing, the company’s forecast for the current quarter was merely good, not great,” Cramer said. “I have been too cautious on Crocs, but, sooner or later, this fad is going to run out of juice. While I don’t know when that will happen, I do know that Crocs sells for 24 times next year’s earnings, and that’s too expensive for a company that’s only expecting mid-single-digit growth this year.”

So while the department stores seem to be in a moment of reckoning, Cramer reiterated his point that the retail sector is, appropriately, a very mixed bag.

“We know Lululemon, Yeti Holdings and Crocs have all been doing very well,” he said. “I love Lulu. I like Yeti. Crocs? It’s run too much for me to be comfortable.”

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