After two weeks chock full of retailers' earnings — largely disappointing Wall Street and missing analysts' expectations — the S&P 500's Retail ETF (XRT) was trading in the slumps Friday afternoon, on pace for its worst week of the year.
The index was falling as much as 3.3 percent week-to-date, on pace for its worst week of the year dating back to December 2016 when the XRT lost 4.2 percent over a five-day period.
Ascena — the parent of clothing companies such as Ann Taylor and dressbarn — saw its shares plunge more than 30 percent earlier in the week, after it adjusted its second-half outlook to reflect worse-than-expected business conditions.
"The specialty retail sector is in a period of unprecedented secular change that is disruptive to traditional business models, and we believe operating conditions in our sector are likely to remain challenging for the next 12 to 24 months," Ascena CEO David Jaffe said.
Meanwhile, Foot Locker's same-store sales are falling short of expectations — what seems to be a growing trend across the retail industry.
Off-price retailer TJX, which operates T.J. Maxx, Marshalls and HomeGoods stores, was expected to be an upbeat outlier for the week, but even its first-quarter comparable sales couldn't match Street estimates.
Jefferies analyst Randal Konik wrote in a note to clients that the miss should mark a "yellow caution flag," with TJX posting numbers that "seem to be headed down not up."
As shoppers shy away from brick and mortar, store closures and bankruptcies will continue to emerge, Retail Metrics' Ken Perkins wrote in an updated report this week.
E-commerce growth is looking solid for some players, but margins remain lower overall, Perkins added.
"This is the most confusing first quarter I have ever seen," Sam Poser of Susquehanna told CNBC's "Power Lunch" during an interview Friday. "It's one big train wreck."
With Friday's declines, the XRT has fallen about 7 percent for the year, compared to the 6.5 percent gain. The retail EFT is down nearly 5 percent for the month of May.
Lowe's report will follow Home Depot's positive comparable sales results, which climbed a whopping 6 percent during the first quarter, blowing past a 4.3 percent estimate compiled by analysts who cover the company.
Home improvement retail might be the sector's saving grace after all.
As retailers' woes are growing, many of the industry's landlords — real estate investment trusts, or REITs — are being dragged down, too.
, , , and are all trading in red territory for the month-to-date period.
Some of these REITs' portfolios include locations of embattled department store chains Sears, and
News of Payless ShoeSource and teen clothing retailer Rue21 recently filing for Chapter 11 bankruptcy has cast a larger shadow over the industry, prompting many investors to fear REITs will have a hard time filling vacant shops, as news of store closures intensifies.
"The mall space has to change and is changing," retail investment research firm founder Jane Hali told CNBC in an interview.
Mall owners, like and Simon, are looking to restaurants, service-related concepts and grocery stores to bring traffic back to the mall now, Hali said.
—CNBC's Gina Francolla contributed to this reporting.
Watch: Retail earnings roundup