The "Mad Money" host himself was shocked when Kroger's stock ran from $21 in October to $31 at the end of January on practically no news.
But this week marked a turning point for the stock: after already falling from $28 to $26 the day before the earnings report, shares of Kroger slipped even lower, to $22 a share, after the call.
"I think this time, the analysts have pretty much had it with Kroger's promises and what amounts to bizarre, almost faith-based investing in the stock," Cramer said on Friday.
"Or to give you the line uttered by CFO John Michael Schlotman: 'Our financial results continue to be pressured by inefficient health care and pension costs that some of our competitors do not face.'"
Until recently, Kroger's problems seemed to be behind it. The retailer had its costs under control, its private label brands were taking market share and its Restock Kroger strategy to create more shareholder value was underway.
But Kroger's latest quarter reaffirmed that its past problems were still very much in play: in the fourth quarter, the supermarket giant's margins fell 31 basis points, with management indicating that they could get even worse.
"Worst of all was when the CEO, Rodney McMullen, said, 'We're not going to lose on price.' That's the last thing you ever want to hear," Cramer said. "When the supermarkets start to compete on price, you get ruinous competition and everyone in the industry loses."
"[But] a lot of analysts and investors seemed genuinely caught off-guard when they saw these numbers," Cramer said. "The conference call was so upbeat you'd have thought Kroger was in great shape."
This misplaced enthusiasm was cemented by the CEO's "sign-off" from the call, Cramer said. McMullen suggested that events tied to St. Patrick's Day and the spring basketball season could carry the day for Kroger as customers turn to its stores for party supplies.
"You think these analysts give a darn about that? You think they're wondering about March Madness?" Cramer quipped. "I'll tell you what they're wondering about: McMullen madness. As in, 'Is this really how Kroger plans to compete in the new world of vicious, cheap competitors, including Amazon?'"
Given all of the pressure on Kroger, the "Mad Money" host cautioned investors against investing in any of the grocery plays.
"After Kroger's quarter, you need to treat the supermarkets with caution, of not outright fear. It's just too tough to compete in this business right now," he said. "If I want ruinous competition, I'll check out the bracketology this weekend. But the stock of the Cincinnati grocery giant? Hard pass."