Are retailers trying to manage expectations for the all-important holiday selling season? Or have expectations gotten a bit ahead of themselves? 

The latest batch of earnings reports from retailers have shown companies like Macy's

, Wal-Mart Storesand Kohl's

topping analysts' estimates for the quarter, but disappointing investors when it comes to the outlook. What gives?

Over the past 30 to 60 days, analysts' estimates for both the holiday season and for next year's retail earnings have been creeping up, said Wall Street Strategist Brian Sozzi. But retailers want investors to have a "realistic set of assumptions," he said.

Although the estimates vary, a good number of retail industry analysts are expecting this holiday season to be better than last year's dismal results.

But it's still not clear how the consumer will behave as we head through the season, especially among those shoppers at middle income levels. Sure, the number of shoppers browsing through stores has been on the rise, but what will they be buying?

Judging by the aggressive discounting we have already seen in the weeks leading into Thanksgiving, which traditionally has kicked off the Christmas holiday shopping season, retailers think discounts will be necessary to get consumers to bite. 

Wal-Mart has already shown signs of how aggressive it will be. It has slashed prices on toys, books, and other items and is now dangling free gift cards in front of smartphone shoppers. This is a big bet on a consumer who is still driven by price in making their decisions.

"Customers continue to tell us they are concerned about their own finances and unemployment," Wal-Mart said, following the release of their latest earnings. "We recognize some customers may be more cautious in their holiday spending."

Wal-Mart Stores CEO Mike Duke added that he sees a changed consumer emerging from this recession.

"When the recession is behind us, we believe consumers will shop with a new instinct for value," Duke said.

Britt Beemer, CEO and founder of America's Research Group, said his research has been painting a picture of a consumer who is making a list before they head to the store and is sticking to it.

Notably, Beemer is expecting retailers will find no cheer this holiday season. Beemer says consumers are under so much financial pressure that even children will feel a pinch this year. He estimates retail sales will fall about 2.9 percent, and he expects he may have to revise that forecast downward as the season progresses.

One telling trend: Consumers who are buying sale items are not considering purchasing additional non-sale items. What's more, they want to wait for the good deals, prices of between 60 percent to 70 percent off not the 25 percent off that retailers have been doling out.

That's one factor that has been pressuring retail sales. Retailers will need to sell more of heavily discounted items to make up the difference.

Or they will need to continue to aggressively squeeze out costs. That helped boost Wal-Mart's latest results. But that's not going to get the middle-income customer shopping again.

More and more, there are signs that consumer is still under a lot of pressure.

"It is all about the middle-income shopper," said Neil Currie, an analyst at UBS.  "They are still under pressure from credit card debt and they are under pressure from expectations of unemployment not going away. Their house is under water. We think this Christmas actually could be worse than last year."

More from CNBC.com

• Guest Blog with Vince Farrell — Retailers?
• Meet The Leaders of the New Retail Revolution
• Ford, Hyundai, Audi Gaining Interest
• For Video Game Makers, Stakes Are High for the Holidays

Questions? Comments? Email us at consumernation@cnbc.com