Lululemon saw its shares drop over 20 percent on Thursday after weak first-quarter performance, but Jim Cramer believes that while competition is fierce, it is still a leading player.

"You speak to everyone who is involved [in buying athletic wear], and they're suddenly sampling another player. So I do think that the competition has caught up, but this guy is the leader. I don't want to give up," the "Mad Money" host said on CNBC's "Power Lunch."

Investors dumped their shares of the Canadian retailer in response to its slowing store traffic and online purchases, which CEO Laurent Potdevin attributed to a bland selection of products.

In a Thursday interview with Potdevin, Cramer asked the CEO to clarify the drop in performance, as well as the company's dim 2017 guidance.

"We've had an incredible Q4, an incredible 2016," Potdevin said. "I'm super grateful for the team. I mean, for the first time we're returning to earnings growth since 2013. We're a little disappointed, obviously. We're not satisfied with Q1. We had a slow start."

But, Potdevin insisted, "We've taken drastic steps to fix it."

The CEO also said that while other brands like Old Navy and Bandier have caught on to the health and wellness trend, Lululemon remains the top dog.

"There are a lot of great brands out there and we continue to lead the market. I mean, there is no doubt in my mind that the healthy, active, mindful lifestyle that we created, we continue to lead that," Potdevin said.

He added that international business is booming as well. "I see the strengths of our business in China. Our business in China is on fire," Potdevin said.

Cramer was taken aback slightly by the CEO's optimism. The "Mad Money" host said that while Lululemon may stay in the red for some time, he did not buy the idea that the stock is in a death spiral.

"It is quizzical, and the problem here is that this is a company [whose] consistency dropped down so quickly that you know that whatever [Potdevin] says, you have to say, 'Well, wait a second, you weren't just wrong, but you were really wrong.' But I don't want to write this company off," Cramer said.

For more on Lululemon, tune into "Mad Money" Thursday at 6 p.m. EDT for an interview with CEO Laurent Potdevin.

Watch: Lululemon founder says company lacks vision