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Here's what is actually working in retail: Cramer

After a slew of retailers reported disappointing earnings results on Tuesday, dragging on the stock market at-large, CNBC's Jim Cramer highlighted bright spots in an otherwise blighted sector.

"You want good retail? CVS, Walgreen's ... and Rite Aid all had great numbers," Cramer said on "Squawk on the Street." "You have to wonder are the drug stores taking share from other companies because they offer a far further, much better array of products. I like them."

Home Depot on Tuesday reported first-quarter earnings below estimates, which it blamed on a harsh winter in many parts of the nation. To Cramer, the results were "disappointing," but he thinks the home improvement retail chain operator could soon make up the losses.

Read MoreHome Depot misses forecasts, hurt by slow season

"The spring selling season is, some people think, their Christmas season. This is when you go ... get your flax, when you go get your planting," Cramer said.

Home Depot is the "finest operator in the segment," Cramer continued. He also praised its plans to buy back as much as $3.75 billion additional shares this year.

"So I'm not going to necessarily going to get rid of this," he said. "The buyback is big. I don' think that you should throw away Home Depot."

Elsewhere in the home improvement space, Cramer added he wouldn't bet against rival Lowe's either.

In the grocery sector, Cramer recommended investors "circle back" to Kroger.

Adam Jeffery | CNBC

But Cramer offered caution on some retail names, too.

Urban Outfitters, for example, posted results that were "extremely disappointing." The teen apparel retailer saw shares drop after it delivered a quarterly profit below market expectations as costs jumped and tough competition forced the retailer to spend more on marketing.

"Those who are buying it now, and there are a bunch of analysts who are reiterating, I think you ought to be very careful because they have too much inventory," Cramer said. "And I don't think they have the formula to turn around the flagship store yet. Be careful [with] Urban."

Meanwhile, Staples projected a drop in sales in the current quarter as it competes with online retailers, mass merchants and drugstores, with shares of the office supply retailer falling sharply.

Read MoreStaples forecasts fall in sales

"This was another terrible quarter [for] Staples, and they're obviously challenged by Amazon," Cramer said. "Remember, Amazon is the wrecking crew for so much retail, and people just don't go to office supply stores anymore to get office supplies."

—By CNBC's Drew Sandholm.


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