Holiday sales were jolly for discounters ... and that's about it.
Big box retailers like Wal-Mart and Costco saw sales that exceeded expectations.
But most specialty shops, with some significant exceptions, saw their sales drop or grow less than expected, according
to the December same-store sales figures released Thursday. Same-store sales, a crucial barometer of performance for the retail sector, compares revenues at stores open at least a year.
The numbers make this the weakest holiday (November-December combined) in 3 years. In 2004, the Thomson Financial retail combined index posted a 2.3% average, the same as 2007.
There were signs early in the week that the reports would be soft. Three specialty retailers (Men's Wearhouse, American Eagle, Hot Topic) warned their sales would be off and a shopping center trade group said its early holiday season forecast would not be met.
Indeed, expectations throughout December were that the ongoing problems in the housing industry, plus worries about a possible recession, would prompt consumers to pull back.
And the post-Christmas gift card pop that retailers were hoping for never happened, Britt Beemer of America's Research Group noted in an interview on CNBC's "Squawk Box." Only 36 percent of American consumers went shopping in the Christmas to New Year's period, he noted. And 70 percent of that number only purchased sale items.
"Consumers are very cautious and very conservative," Beemer said. (Video of Beemer's comments is available below).
Wal-Mart Stores reported a 2.4 percent rise in December sales at U.S. stores open at least a year, helped by strong sales of food.
Analysts, on average, were expecting same-store sales to rise 2.1 percent, according to Reuters Estimates, while the company itself had forecast a gain of 1 percent to 3 percent.
Wal-Mart also said it expects fourth-quarter earnings per share from continuing operations to be within its previous forecast of 99 cents to $1.03 per share, but it said earnings will be pressured by higher interest expense compared with a year ago.
The world's biggest retailer said net sales in the five weeks ended Jan. 4 were $46.6 billion, up from $42.99 billion a year ago.
Costco Wholesale reported a stronger-than-expected 7 percent rise in December sales at its warehouse clubs, helped by higher gasoline prices and strength in foreign currency.
Analysts, on average, had been expecting an increase of 5.7 percent, according to Reuters Estimates.
Costco, the largest U.S. warehouse club operator, said net sales were $7.55 billion in the five weeks ended Jan. 6, up 10 percent from a year earlier.
Discount retailer Target said December sales at its stores rose 0.6 percent, adjusted for a calendar shift, compared with analysts' expectation for a gain of 0.2 percent.
Not taking into account the calendar shift, it said same-store sales fell 5 percent in December, compared with Wall Street forecast for a 4.9 percent decline, according to Reuters Estimates.
Last month, Target lowered its forecast for December sales forecast, saying it expected same-store sales in the range of down 1 percent to up 1 percent, adjusted for the calendar shift. The discount retailer had originally forecast December same-store sales would rise 3 to 5 percent on an adjusted basis.
Sales for the five weeks ended Jan. 5 increased 0.1 percent to $9.26 billion from $9.25 billion in the comparable period a year before.
Discount store chain Family Dollar Stores said Thursday that sales at stores open at least a year fell 0.7 percent in December and predicted that January same-store sales would be flat.
Analysts, on average, had been expecting the company to post a December same-store sales decrease of 1.9 percent, according to Reuters Estimates.
Family Dollar, which had forecast December same-store sales to be flat or down slightly, said total sales for the five weeks ended Jan. 6 rose 2.5 percent to $816.6 million from $796.7 million a year earlier.
Macy'sreported a 7.9 percent fall in December sales, worse than the company and analysts expected, hurt by a calendar shift and cautious consumer spending.
The parent of Macy's and Bloomingdale's also said it expects January same-store sales to fall 4 percent to 6 percent. For December analysts expected a 6.6 percent same-store sales drop, according to Reuters Estimates. Macy's had said December same-store sales could fall 4 percent to 7 percent.
Macy's had reported a 13.4 percent rise in same-store sales for November as a calendar change shifted some holiday sales into that month.
Upscale retailer Neiman Marcus said December sales rose 2.9 percent, on demand for shoes and designer handbags.
Total revenue for Neiman Marcus rose 4.9 percent in the five weeks ended Dec. 29, the company said.
Neiman Marcus, which also operates Bergdorf Goodman stores, competes with Saks, which reported an 0.8 percent rise in December same-store sales, and Nordstrom, which said its same-store sales fell 4 percent for the month.
Retailer Kohl's reported an 11.4 percent drop in December sales at stores open at least a year and cut its fourth-quarter profit forecast.
Kohl's said it offered discounts to lure shoppers, which pressured its gross margins. Analysts on average were expecting same-store sales to fall 7.9 percent, according to Reuters Estimates.
Total sales for the five weeks ended Jan. 5 fell 3.4 percent to $2.7 billion.
Gap said its sales at stores open at least a year fell 6 percent in December but said merchandise margins were "significantly above" the prior year.
Analysts, on average, had been expecting the San Francisco-based clothing retailer to post a same-stores sales decrease of 2.4 percent, according to Reuters Estimates. Gap, which runs Banana Republic, Old Navy, and its namesake Gap stores, said total sales for the five weeks ended Jan. 5 fell 6 percent to $2.20 billion from $2.34 billion a year earlier.
Same-store sales, a key gauge of retail performance, fell 9 percent and 8 percent, respectively, at Gap and Old Navy stores in North America. They fell 1 percent at Banana Republic, the company's more upscale chain.
Women's apparel retailer Chico's FAS said sales at stores open at least a year fell 13.7 percent in December due to promotions and higher markdowns.
Analysts, on average, had been expecting a same-store sales fall of 11.1 percent, according to Reuters Estimates. Total sales for the operator of the Chico's, White House/Black Market and SOMA Intimates chains fell 5.6 percent to $181.6 million for the five-week period ended Jan. 5.
Limited Brands said its sales at stores open at least a year fell 8 percent in December.
The company also said fourth quarter earnings would be in the low-to-mid point of a previously-announced range of 90 cents to $1.05 per share.
Analysts, on average, had expected a same-store sales decline of 4.1 percent over the five weeks ended Jan. 5, according to Reuters Estimates.
Net sales for the operator of the Victoria's Secret and Bath & Body Works chains were $1.74 billion, compared to $2.03 billion in the same period last year.
Children's Place Retail Stores said its sales at stores open at least a year rose 2 percent in December.
Wall Street had expected a same-store sales gain of 2.9 percent, according to Reuters Estimates. The children's clothing retailer said total sales for the five weeks ended Jan. 5 fell to $314.6 million from $318.5 million a year earlier.
But teen clothing retailer Aeropostale reported a greater-than-expected increase in December same-store sales and raised its fourth-quarter earnings estimate.
Aeropostale, which had broad discounts in the month, said sales at stores open at least a year rose 12.2 percent in December, far exceeding analysts' average estimate of 3.6 percent, according to Reuters Estimates.
"We experienced broad-based strength within our key classifications, with particular strength in women's and men's fleece, women's bare-knit tops and men's graphics (T-shirts)," Aeropostale Vice President Ken Ohashi said on a prerecorded telephone call, citing strong traffic in the stores.
-- Reuters contributed to this report.