Master of Rebranding

Continuing with his "Mad Money" restaurant guide, Cramer sampled the national chains of Darden Restaurants ( DRI), which owns the Olive Garden and Red Lobster, Dineequity ( DIN), purveyors of IHOP and Applebees and Brinker Int'l ( EAT), best known as Chili's.

Cramer said with these huge national brands, we don't care about unit growth, but rather which company can turn around its aging brands to become more relevant and which ones can control costs best.

Cramer said Dineequity recently began a massive rebranding and remodeling of Applebees, and has shown three quarters of positive same store sales growth. But the company's IHOP brand is still lagging, down 2.7%, taking it out of the running for the top spot. Cramer said Dineequity is intriguing however, as all of its locations are franchised, taking cost inflation out of the picture.

Then there's Brinker, a company that pays a 2.2% dividend yield, but also one that's only just begun a remodel of Chili's, making it too soon to tell whether this chain can become a five-star destination in Cramer's book.

That leaves Darden, Cramer's long-time favorite restaurant stock. Cramer said Darden is a master of rebranding, and it's remodeling on Red Lobster is showing great results, just as Olive Garden's last remodel did.

He said the company is also on track to remodel its Longhorn Steakhouse chain into a more upscale location as well. On the cost front, Cramer said Darden has excellent cost discipline. The company also sports a 2.6% dividend yield, has a strong balance sheet and a stock buyback to boot.

Remodeling Trend

There's nothing better than a good turnaround story, Cramer told viewers. And when it comes to retail, a good remodel can make all the difference. Cramer highlighted three companies doing just that.

Cramer said Kohl's ( KSS), an Action Alerts PLUS name, has become a terrific executioner, and is remodeling 100 of its 1100 stores at a cost of $275 million. That makes most of Kohl's stores now opened or remodeled in the past five years. What's the result? a 7% bump in sales for every remodeled location.

Kohl's has also enjoyed a 47% increase in its ecommerce sales and is increasing its private label items to bump up margins even further. Kohl's is using its new found cash to buy back stock and to begin paying a dividend in June. Shares of Kohl's trade at just 12 times earnings despite having a 13% growth rate.

Cramer also gave the nod to Walgreens ( WAG), the drugstore chain that's lowering operating costs and creating a better shopping experience by converting 1500 of its locations to a new format. Walgreens has seen a 5.5% bump its its sales after the remodel. Shares of Walgreens ar eup 30% since Cramer recommended them on Oct 8, 2010 but, he said, the stock has a lot more room to run.

Finally, Cramer mentioned AutoZone ( AZO), the nation's leading auto parts dealer that's making headway in commercial auto parts thanks to its newly remodeled locations. AutoZone is now growing its commercial business by 22% in its most recent quarter. Cramer told viewers to wait for the company to report before buying in, as shares are already up 53% so far this year.

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