Shares of L Brands (LB) are down almost 8% after the company provided its comp-store sales results for October and an update to its earnings per share guidance.
These numbers were "just a tad disappointing" for the owner of Victoria's Secret, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment.
But look at what investors are doing to the stock, he pointed out. This drop shows that investors want to sell retail, especially if the companies are showing any signs of struggle. So investors wading into the sector need to use caution, Cramer said.
"There's a lot of bulls out there thinking that the worst is over," he said. What happened to L Brands "tells me it's not."
So far, J.P. Morgan analyst Mathew Boss has been correct in his call for caution regarding mall-based retailers. These stocks are not doing well, Cramer concluded.