This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Jim Cramer: Hard-Pressed for Traffic

NEW YORK (Real Money) -- Overstored, overstored and overstored. That's what we are discovering about retail this winter, and the hits just keep coming with today's twin downgrades of The Container Store (TCS - Get Report) from Stifel Nicolaus and Merrill Lynch.

The Container Store came out of the chute with high hopes, in part because the "smart set" likes to shop there. Container Store's bloodlines make it feel like Costco (COST) meets Starbucks (SBUX) -- and then merged with Whole Foods (WFM), as one of the company's major claims to fame is its treatment of associates. The company is considered one of the better places to work. On Valentine's Day, Container Store set up an emergency fund for its employees to help them through disasters and serious medical issues.

This stock came public at $18 and immediately more than doubled, and then proceeded to trade up to $47. But it's been downhill ever since that November floatation.

Part of the problem is that TCS came out when housing sales were still strong and the higher U.S. Treasury interest rates had not yet impacted the numbers. But more important, it came out before the polar vortex. This harsh winter has cut into the company's sales all over the nation, but especially in the warmer climes like Texas, where TCS has a huge number of stores relative to its entire store base.

Must Read: How WhatsApp Affects Monitise; Shorting Tesla: Best of Kass

But the bigger issue remains that any retailer attempting to expand right now -- and this is one of them -- is hard-pressed for traffic. We don't have enough shoppers going out, and when you look at the Amazon (AMZN)-like overlap it's not pretty.

I take the two downgrades to heart. This stock is still up huge from its opening day, and yet its first quarter was already a disappointment.

As much as I like shopping there, I think you have to listen to those analyst cuts and exit the stock until things are either clearer regarding either the weather or the strength of the consumer. Both, with another polar vortex in sight, seem pretty opaque at least for now.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the securities mentioned.

Editor's Note: This article was originally published at 7:27 a.m. EST on Real Money on Feb. 24.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs