Cramer: Macy's Is Run By A 'Miracle Worker'

Everyone loves a turnaround story, and a compelling one can be found at Macy's Inc M, according to CNBC's Jim Cramer.

What Happened

Macy's delivered an earnings beat in its fourth-quarter results and a slight sales miss, but comps rose 1.3 percent and management offered a "terrific outlook," Cramer said during his daily "Mad Money" show Tuesday. Macy's "believers" were rewarded with a more than 3-percent gain in the stock, although investors who bought shares below $20 are sitting on a much better profit. 

Macy's new CEO Jeff Gennette is "a bit of a miracle worker," Cramer said. The executive succeeded in remodeling the retailer — accomoodating regular spenders with platinum-level Star Rewards, and customers who turned to off-price retailers now have Macy's Backstage, the CNBC host said. 

Why It's Important

The most important question surrounding Macy's recent momentum could be whether it's sustainable. Cramer said he certainly thinks so based on sales of dresses, coats, jewelry, men's tailored clothing, children's shoes and handbags all coming in better than expected.

"Shop there as I have, embrace it, and you'll see exactly what I mean," the "Mad Money" host said. "The bears blinded themselves to all of the positives here in the pursuit of a home-run short, and instead it turned out to be a home-run long."

What's Next?

Gennette is an executive who "knows fashion," but also "cares passionately" about fixing Macy's "darned" balance sheet, Cramer said. The department store chain continues to pay down its debt through the sale of properties and closure of underperforming stores.

Macy's outlook has greatly improved across multiple metrics, including gross margins and sales, Cramers said. 

Related Links:

Macy's Updates Comp Sales And Store Closures, Raises 2017 EPS Outlook

Macy's And Kohl's Earn Free Pass In Q3, But Need To Gives Consumers Reason To Shop In Q4

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