Cramer's Issue With Nike

Jim Cramer has warned investors of Nike Inc NKE over its excess inventory it reported in its latest quarterly results.

For the third quarter, Nike's inventory grew 8 percent to $4.6 billion.

"When people see excess inventory, what they think of is Steph Curry, they think Under Armour," Cramer said on Squawk on the Street. "What [Under Armour CEO] Kevin Plank has done is pick the right guys."

Related Link: ESPN Explains How Nike Lost Steph Curry To Under Armour

Last year, Under Armour Inc UA extended its contract with Curry through 2024, and struck a 10-year deal with golf sensation Jordan Spieth.

Nike reported quarterly earnings of $0.55, topping Street view by $0.06. However, the $8 billion revenue fell short of consensus estimate by $200 million. Gross margin was 45.9 percent, flat with last year due to forex, higher warehousing costs, and the impact of clearing excess inventory in North America.

Shares of Nike dropped 3.5 percent to $62.64. They have gained 24 percent in the last year.