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Morning Bell With Jim Cramer: RH Is a 'Second-Half Stock to Buy'

TheStreet's Jim Cramer expresses his admiration for RH and praises Bed Bath & Beyond.

TheStreet's Jim Cramer and Action Alerts PLUS senior analyst Jeff Marks discussed home furnishings retailer RH  (RH) - Get RH (Restoration Hardware) Report, which Cramer said in his Real Money column "may be one of the best second-half stocks to buy."

RH: 'Insta-Heaven'

Last month, RH reported first-quarter revenue of $860.8 million, up a whopping 78% from $482.9 million a year ago, and blasted analysts' calls for $751.5 million.

Customer demand has soared during the pandemic. The company also raised its guidance.

"They had the best earnings report of the second quarter," Cramer said. "People are looking for basically a fraction of what they reported."

CEO Gary Friedman, Cramer added, "bought a huge amount of stock."

"Gary Friedman went on 'Mad Money'," Cramer said, "looked at the camera - this was when the stock was at $125 - and said, 'I'm going to buy a million shares after this is over' and it went to $600. Good call."

Marks and Cramer both praised the company's fine showrooms and Cramer described RH's restaurant as "Insta-heaven."

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If there were Michelin books for retailers, Cramer said in his column, "RH would get three stars and everyone else would get no stars."

Bed Bath & Beyond

Bed Bath & Beyond  (BBBY) - Get Bed Bath & Beyond Inc. Report posted softer-than-expected first-quarter earnings Wednesday but boosted its full-year profit guidance.

"They keep referencing Buy Buy Baby," Cramer said, referring to the store the company bought from Toys R Us in 2007. "Why? Over and over again there’s something going on with that business that we don’t know about that makes me say,  'stay long on Bed Bath & Beyond.'"

Cramer praised Macellum Capital Management CEO Jon Duskin's efforts in turning the company around.

"What Jon didn't do was fire everyone; he brought in a merchant," Cramer said, referring to CEO Mark Tritton, "who changed the top. The people working there are the stores, they didn't know. They've just directed badly."

Cramer said Tritton has created his own brands and, like Kirkland's  (KIRK) - Get Kirkland's, Inc. Report and Costco  (COST) - Get Costco Wholesale Corporation Report "his brands are loved."

Costco is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells COST? Learn more now.