Cramer Says Stick With Retailers That Deliver, Like Target, Foot Locker - TheStreet

NEW YORK (TheStreet) -- Some retailers simply execute better than others, said TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio. And that's evident in Gap's (GPS) - Get Report disappointing earnings results. 

On Friday, Gap shares fell slightly more than 5% after it missed on third quarter revenue and earnings per share estimates, and provided weaker-than-expected full-year guidance. Gap has a market cap of $17.5 billion.

"They just don't have it," Cramer said on CNBC's "Cramer's Mad Dash" segment. Gap doesn't have the right assortment and merchandise, and is failing to execute at a high enough level. 

GameStop (GME) - Get Report is another company struggling in this environment. Shares are down 13% following a top- and bottom-line miss, as well as weaker-than-expected guidance. 

While video game companies like Take-Two Interactive Software (TTWO) - Get Report and Activision Blizzard (ATVI) - Get Report are doing well, as is home entertainment retailer Best Buy (BBY) - Get Report , GameStop is struggling due to video games moving away from a physical disk and into a downloadable form. 

"You can't own the ones that did badly," Cramer said. "They don't come back." Instead, try owning the retailers that are doing well, like Target (TGT) - Get Report and Foot Locker (FL) - Get Report .

"There's a big bull market in footwear," he said, as Foot Locker beat on revenue and EPS estimates. Cramer also pointed out that Nike (NKE) - Get Reportboosted its dividend by over 16% on Thursday, after topping analysts' estimates in the most recent quarter. 

-- Written by Bret Kenwell

Follow @BretKenwell

TheStreet Ratings team rates GAMESTOP CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate GAMESTOP CORP (GME) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."

You can view the full analysis from the report here: GME Ratings Report

At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.