NEW YORK (TheStreet) -- Urban Outfitters (URBN) - Get Report stock plunged yesterday after the retailer announced that it has agreed to acquire the entire The Vetri Family group of Italian restaurants, including Pizzeria Vetri.

"You're out of your mind," TheStreet's Jim Cramer said on CNBC's Squawk on the Street this morning. "Hey, how about a little pepperoni with that wedding dress in the back?"

He added that Urban Outfitters CEO Richard Hayne's reasoning for the acquisition was not persuasive. 

"The analysis was like 'I like the taste of pizza,'" Cramer said.

Cramer joked that maybe now Domino's Pizza (DPZ) will go buy Dillard's (DDS), or Papa John's (PZZA) will merge with Big Lots (BIG): "Buffalo Wild Wings (BWLD) and KMart - a match made in heaven!"

Additionally, Urban Outfitters reported fiscal 2016 third quarter revenue short of analysts' expectations after the market closed on Monday.

"We are in a moment where apparel is really in trouble," Cramer said, adding that the sector has become very commoditized and many stores sell the same brands.

Retailer Dicks Sporting Goods (DKS) reported earnings short of expectations before the market open this morning.

The sporting goods retailer blamed warm weather for lower-than-expected same-store sales, which Cramer noted is, again, apparel-related.

Separately, TheStreet Ratings team rates URBAN OUTFITTERS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate URBAN OUTFITTERS INC (URBN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

You can view the full analysis from the report here: URBN

Image placeholder title

URBN

data by

YCharts

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.