Jim Cramer -- Fossil Hammered as Consumers Bypass the Mall

Fossil missed earnings, a sign more people are shopping online or just not wearing traditional watches anymore, Cramer says.

Author:: Bret Kenwell
Publish date:: May 11, 2016 10:34 AM EDT

Shares of Fossil (FOSL) - Get Report are down more than 30% Wednesday after the company missed on top- and bottom-line estimates. If SolarCity (SCTY) had the worst conference call of 2016 Tuesday, then Fossil's was a close second, said TheStreet's Jim Cramer, who called it a "horror show."

Fossil makes watches, the traditional type that tell the time. That's not enough in the age of smart phones and smart watches, Cramer, the co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment.

Cramer said during the conference call Fossil management said millennials don't wear watches "because they grew up with smart phones." The company expects the current headwinds to intensify, resulting in lower sales and lower gross margins for 2016.

There is such a rapid shift happening in retail, Cramer said. He noted that aside from whether or not people are wearing wearing wristwatches there is another factor -- consumers opting to shop online using Amazon (AMZN) - Get Report or others rather than going to mall-based retailers such as Fossil or Macy's (M) - Get Report -- which also reported a big drop in first-quarter sales.

These shifts are massive and occurring so fast the management teams can't keep pace. Given these trends, it's somewhat surprising investors continue to sell shares of AAP holding Apple (AAPL) - Get Report , Cramer added.

Shares of Fossil are down almost 80% since November 2013.