Shares of the global nutrition company are down about 15% on Tuesday after the company missed on earnings-per-share and revenue estimates, while new member sign ups dropped 17% from a year earlier.
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On CNBC's "Cramer's Mad Dash" segment, he attributed at least some of the decline in revenue and new member sign ups to hedge fund manager Bill Ackman, who has publicly blasted the company, referring to Herbalife as a Ponzi scheme.
In any regard, the decline isn't a good thing, Cramer said.
The company's earnings before interest, taxes, depreciation and amortization are likely to suffer, and that may weigh on the stock price.
Herbalife wasn't the only company to disappoint investors on Tuesday. Michael Kors (KORS) reported what seemed to be a good earnings result after beating on EPS and revenue estimates, the latter up 43% from a year earlier.
But Cramer pointed out that the company had a "very big decline in U.S. same-store sales," and during the conference call, management "cites a more significant decline in mall traffic."
The company also lowered its fiscal 2015 comparable-store sales guidance, from which Cramer concluded that "stock has to go lower."
The decline in mall traffic will be a problem for many traditional retailers, one of which is Michael Kors, he said.
Omni-channel companies or those that have a mix of sales from online, mobile and brick-and-mortar outlets will be fine this holiday season, but traditional mall-based retailers may be in trouble, he said.
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-- Written by Bret Kenwell