Are Macy's and Other Struggling Retailers Finally a Buy?

Shares of Macy's Inc.  (M)  were surging Tuesday morning, up more than 10% after the company beat on earnings per share estimates. However, after a barrage of selling in the broader market, shares ended higher by just 3.54% to $28.40. 

While the retailer missed on revenue expectations, comparable-store sales growth of 1.4% is impressing Wall Street. The company is done playing defense, TheStreet's Jim Cramer said on CNBC's "Mad Dash" segment. Now it's playing offense.

Macy's first focused on the balance sheet, cutting its debt down. Now, it's focused on growing comp-store sales. Should it continue to do so through 2018, it's hard to imagine this stock staying down, Cramer reasoned.

The company's efforts to tailor its stores toward local areas appears to be working, he added.

Operating income jumped and climbed almost 50% year-over-year as a percent of sales, hitting 14% in the quarter. Comp-sales for January look good, while full-year earnings per share guidance of $3.55 to $3.75 came in significantly ahead of consensus estimates calling for $3.04 per share.

Management also said it is looking to evaluate its real estate portfolio to improve shareholder returns, noted Cramer, who also manages the Action Alerts PLUS charitable trust portfolio.

"I'm quite impressed," he said of the retailer's quarter. There will be bears that nitpick the quarter. But if the stock pulls back, those who are bullish should use it as a chance to buy, Cramer reasoned.

Once a retailer has momentum, it can be hard to stop. "It's not a one-quarter phenomena," he concluded.

Other retailers, like Action Alerts Plus holding Nordstrom, Inc. (JWN) , J.C. Penney Inc.  (JCP) and Kohl's Corp.  (KSS) are struggling to hold onto gains or have even dipped into negative territory after a strong open.