These retailers have some explaining to do.
Despite several early reads that the season came in better than expected, most of the department stores and specialty chains that have announced their results said sales at their established stores continued to slide in November and December.
The latest victim of the trend was J.C. Penney, which on Friday reported a comparable-sales drop of 0.8 percent during the final two months of 2016. While that dip was less severe than the declines at competitors Kohl's and Macy's, it was well shy of Wall Street's expectation for 3 percent growth.
The widespread deterioration from last year's dismal results underscored the challenges facing legacy retailers, who are closing stores and cutting jobs in a bid to boost their productivity. That includes Macy's, which is cutting more than 10,000 workers as it shutters 68 locations.
Shares of Kohl's, Macy's and J.C. Penney have all started off the year in negative territory.
"The magnitude of how bad things actually were was the big negative surprise," Wells Fargo analyst Ike Boruchow wrote in a note to investors, dubbing the season "The Nightmare Before Christmas." Of the 11 companies that had reported holiday sales as of Thursday night, eight posted negative results, Boruchow said. Only PVH, The Children's Place and Gap were outliers (though Gap's results came off a very weak base).
The soft results stand at odds with several spending and consumer reports that have trickled out over the past few days. Mastercard SpendingPulse said holiday sales topped expectations and grew 4 percent. Meanwhile, a group of more than 1,000 consumers told the International Council of Shopping Centers that they spent 16 percent more this holiday than last season, and 4 percent more than they originally planned.
Yet the discrepancy isn't entirely unexpected. Even as analysts said department stores had an opportunity to improve their margins over last year, they acknowledged that retailers who were forced to rely on promotions would be the season's laggards. Despite pared back inventory levels and chillier weather, Kohl's said the "competitive promotional environment" ate into its gross margin more than originally anticipated.
"The retailers that are stuck in the middle really did not do well, and the majority of their growth was fueled by promotions," Steve Barr, PwC's US Retail and Consumer Sector leader, told CNBC about the broader industry last week.
On the flip side, analysts remain optimistic on those retailers that have done a better job addressing consumer tastes. They include Ulta beauty stores; off-price chains like T.J.Maxx and Ross; and activewear brands including Lululemon and Adidas.
Another expected winner is Amazon.com, which grabbed more than one-third of online spending this holiday season, according to Slice Intelligence. Separate data from ComScore shows that desktop spending rose 12 percent this season. Once mobile is factored in, the analytics firm expects overall e-commerce sales will show a 16 percent to 19 percent jump.
The Commerce Department will release December sales next Friday. The National Retail Federation will release its final results shortly after. The trade group is calling for sales to increase 3.6 percent.