Jim Cramer's Best Blogs

Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:

• top-line growth's current unimportance in regards to retail,
• the over-bearishness of traders, and
• how to take advantage when the government sells its stake in Citigroup.

Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.

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In Retail Top Line Doesn't Matter Right Now

Posted at 1:10 p.m. EDT, Aug. 18, 2009

Retail -- sales are slumping. Sales are weak. Sales are sluggish. Sales are so-so.

Enough already. Here's the deal: You know what this means? Sales are in line.

We still, after all of this history, don't get it. What matters with retail is, "Are sales in line with budgets?" That's what you want.

Target's (TGT Quote) up 3 -- I want those 3. Why are they up? Because sales are in line with inventories, which therefore makes the back-to-school season encouraging. But what's the headline that's pulled? "Target says top-line growth biggest challenge."

That's not the headline that matters. What matters is they are making a ton of money because they got it right. They didn't take down a lot of inventory, and they had the right inventory.

Now consider Lowe's (LOW Quote). Wrong inventory. Too much inventory, the dreaded word: PROMOTIONAL.

Do not be confused. Retail is not about top line, it is about in-line. Which is why TGT has been a buy. And Urban (URBN Quote). And Kohl's (KSS Quote).

Sometimes it matters if you have good management and good merchandise and a good eye.

This is one of those times.

At the time of publication, Cramer had no positions in the stocks mentioned.