Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday June 7.
CEO Interview: Patrick Doyle, Domino's Pizza (NYSE:DPZ)
Domino's Pizza (DPZ) has been a great turnaround story that rallied 90% in 2010 and doubled last year. However, its most recent quarter was weak, with a 3 cent earnings miss and lower than expected revenues. The stock has fallen 21% so far this year. However, with raw material and fuel costs coming down, the second half of the year might be stronger for DPZ. The company is doing well with digital sales, which provide the customer with a better experience and reduce labor costs. While pizza delivery has been flat, the company looks forward to 5-8% growth globally, DPZ is seeing huge growth in India and in emerging markets. Cramer thinks that while the stock is down, DPZ's story is intact.
Ascena (ASNA), the company formerly known as Dress Barn, has announced a new acquisition. It plans to add Charm Shops, which specializes in plus sizes for women, to its Dress Barn, Maurice and Justice brands. Ascena has been a highly successful turnaround story and a master at acquisitions. The stock rose 175% from the time it announced the acquisition of Maurice until a year after the deal was complete, and rose 97% following the acquisition of Justice. ASNA is up 10% since it announced it would add Charm, and Cramer would buy the stock before the deal closes later this month. While the company recently reported an earnings miss, Cramer thinks this is a one-time occurrence related to the acquisition.
Men's Wearhouse (NYSE:MW), Urban Outfitters (NASDAQ:URBN), Brown Shoe Company (BWS), Nike (NYSE:NKE)
Cramer admitted that he was wrong recommending Men's Wearhouse (MW) which reported a "hideous" quarter. The stock fell 19% in one day, and numbers were poor on every metric. Management didn't give any indication that the company's problems were temporary nor did it offer any solutions. Therefore, Cramer put MW in the penalty box until it reports a strong quarter.
Cramer explained where he went wrong. He recommended the stock on the belief that hiring would pick up, and men would need suits for the office. He says he should have recommended selling the stock as soon as the tepid jobs number came out last week. Second, he thought MW was taking market share from mom and pop stores that were closing, but he didn't consider that sales of men's suits might be weak across the board. Cramer would not buy MW until it proves itself.
Cramer took some calls:
Urban Outfitters (URBN) has not done much of late, and Cramer does not think it is a buy.
Brown Shoe Company (BWS) is not the strongest shoe company. Cramer prefers Nike (NKE).
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