At its current levels, I think its worth circling back to GAP, says Jim Cramer

Key Concepts:

Fallen retail angels, VF Corp (North Face, Vans), Lululemon, Nike, Gap (Old Navy), Abercrombie & Fitch (ANF), American Eagle Outfitters, teen retailers, same-store sales, stock valuation, earnings reports, CEO stock purchase, fickle consumer base.

VF Corp (North Face, Vans): No Immediate Comeback

The speaker believes VF Corp, the parent company of North Face and Vans, is unlikely to experience a quick turnaround. Despite CEO Bracken Darrell's recent $1 million stock purchase, the speaker remains unconvinced. The purchase is seen as encouraging but insufficient to warrant investment.

Lululemon: Buy Before Earnings

The speaker suggests buying Lululemon stock before the upcoming earnings report next Thursday. The rationale is that expectations for the company have become excessively low, potentially creating an opportunity for positive surprise.

Nike: Wait for a Turnaround

The speaker advises against investing in Nike at this time, preferring to wait for a clear indication of a turnaround in the company's business performance. It's considered too early to make a move.

Gap (Old Navy): Overdone Selling - Buy on Monday

Following a conversation with Gap's Richard Dickson, the speaker believes the recent selling of Gap stock is significantly overdone. Key factors supporting this view:

• Strong Same-Store Sales: Both Gap and Old Navy are exhibiting strong same-store sales performance.
• Profitability and Cash: The company possesses an immensely profitable business and a substantial cash reserve.
• Stock Decline: The stock is down over 20% today.

The speaker recommends an outright buy of Gap stock on Monday, anticipating a correction in the market's valuation. The speaker uses the phrase "The sellers will be shamed. Fall into the gap."

Abercrombie & Fitch (ANF) and American Eagle Outfitters: Sink or Swim Teen Retailers

Both Abercrombie & Fitch and American Eagle Outfitters are categorized as "teen retailers." Abercrombie is actively trying to retain its customer base as they age, potentially targeting individuals up to 40 years old. The speaker emphasizes the inherent risk associated with teen retailers due to the fickle nature of the teen consumer base. This volatility makes these stocks a "sink or swim" proposition. The speaker expresses a "sink" sentiment regarding ANF currently.

Abercrombie & Fitch Divisions:

• Abercrombie: The flagship brand, positioned as more reserved and catering to a slightly older clientele than Hollister.
• Hollister: Described as more "cool and laid back," targeting a younger, teen-centric audience. The two divisions are roughly equal in size.