Cramer Believes Worries Overblown Over Retail Stocks

The markets finished the weeks on a positive note on Friday despite the barrage of bearish concerns earlier in the week. In fact, Jim Cramer noted on Friday’s Mad Money show that retail stocks over which investors were the most concerned seemed to be all moving higher. Financial pundits have been forecasting horrible fourth quarter results due to weak holiday sales, but the retail landscape doesn’t appear quite so dire.

Jim Cramer said that the fourth quarter was “magnificent for retailers” despite the doom and gloom forecasts that seem to be daily in the headlines.

Deckers Outdoor (DECK: 87.25 0.00%) – with its highly successful Ugg boots brand, saw an impressive $0.94 earnings beat.

Gap (GPS: 21.28 0.00%) – the retailer reported earnings that were $.02 above the Street estimate and their positive outlook was accompanied by an 18% dividend increase. Although Cramer did express some concern over the Gap pursuing both a dividend program and a stock repurchase program.

True Religion (TRLG: 37.00 0.00%) – despite the very high price of their products, the company was able to report a good quarter with earnings at $.04 ahead of consensus estimates.

Home Depot (HD: 45.17 0.00%) and Sears Holdings (SHLD: 48.80 0.00%) – strong earnings by the home retails signal a potential turnaround in the housing markets.

Saks (SKS: 10.88 0.00%) and Macy’s (M: 35.86 0.00%) – sales were even strong in apparel stores.

The positive results from retail stocks are a very bullish indicator and seem to have sent the bears into hiding for the time being.