Thursday was not a good day for retail stocks.
Macy's said it will likely cut about 10,000 workers and reported that same-store sales, a key metric for retailers, fell 2.1 percent in November and December compared with the year-ago period, signaling weak holiday sales.
Meanwhile, Kohl's slashed its full-year earnings forecast to a range of $3.60 to $3.65 per share, excluding impairments and other items, from a prior forecast of $3.80 to $4.00 a share. The department store also reported weak holiday same-store sales, which dropped 2.1 percent in the November to December period.
"Weak holiday sales results for Macy's and Kohl's reflect the continued secular challenges that plague the department store industry," wrote Christina Boni, vice president and senior analyst at Moody's. "We expect the shift of purchases to alternative channels such as online and the off-price channel to continue in 2017. Lean inventories entering fourth quarter were not enough to support profitability targets at either Macy's or Kohl's given the disappointing sales performance."
Shares of L Brands, the parent company of Victoria's Secret, were also among the retail laggards, falling 8.7 percent after posting comparable-store sales that missed analyst expectations.
Analysts at Jefferies reiterated their underperform rating on the stock and trimmed their price target to $48 from $50. "We see risks rising at LB, owing to increased competition and pricing compression, at a time when VS is executing major changes to its core business," Jefferies said in a note.
L Brands' stock was around $61.39, down about 8.8 percent, as of midday Thursday.