CNBC’s Jim Cramer said Friday that while the retail sector has had a tough week, there are still several winners who stand out from the deluge of stocks that have fallen.
“The Big Four aren’t the only retailers reporting this week, and surprisingly some of the smaller players have done quite well,” the ‘Mad Money’ host said, referring to the retail giants at the retail Walmart, Home Depot, Target and Lowe’s.
“While retail is really awful right now, it’s not uniformly awful. Most stores may be struggling, but you’ve got a few that are doing pretty well. And I’m telling you that TJX is definitely a buy, [BJ’s Wholesale] I’m fine, Foot Locker is fine for a trade” he added later.
Cramer’s comments come after several retail giants announced their quarterly results this week. Target and Walmart both reported disappointing results that saw their shares tumble, while Home Depot and Lowe’s fared better.
“These big-box chains are being eaten up by inflation and changing consumer preferences — people aren’t spending like we’re in a pandemic anymore, they’re spending like we’re back to normal,” Cramer said. , noting that this has led to excess inventory for these retailers.
While that’s bad news for names like Target and Walmart, it’s a tailwind for discount retailers like BJ’s and TJX, which operates TJ Maxx and Marshalls, Cramer said.
TJX “goes after the weakness of other retailers – it’s like a vulture. For several quarters they couldn’t get their hands on a lot of merchandise because no one had excess inventory. … When you see Walmart and Target struggling like that, you know TJX won no problem getting a good product,” he said.
As for Foot Locker, Cramer said its better-than-expected quarterly results put it in a more comfortable position than many of its larger peers.
“Obviously these guys have a better handle on the current retail landscape than most other operators,” he said.
Disclosure: Cramer’s Charitable Trust owns shares of Walmart.
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