"When you hear three weeks ago that this was the best consumer environment ever, you go: 'Wait a minute. What changed overnight?'" said Stacey Widlitz, president of SW Retail Advisors.
Macy's in particular — with more than 690 stores across the U.S., including Bloomingdale's — has served as a sort of barometer for its peers. When the company said it didn't sell as much women's sportswear, sleepwear, fashion jewelry and cosmetics during the holidays as executives had hoped, Macy's shares had their worst day ever, cratering nearly 18 percent. It brought many retail stocks down with it too.
Macy's stock is now down 6 percent over the past 12 months, a much more modest decline than J.C. Penney, which has tumbled more than 65 percent over the same period, to hover right around $1.30. Nordstrom shares are down about 11 percent over that time period, while regional department store chain Dillard's stock is down 8 percent over the past year.
Speaking at the National Retail Federation's Big Show in New York this past week, Macy's CEO Jeff Gennette made no mention of the retailer's dismal performance this past holiday season. Instead, his panel session was focused on Macy's bringing new tech and pop-up marketplaces to its stores. But some analysts have said these efforts aren't really moving the needle.
"Now, as we are positioned in 2019, if Macy's is leading with the downside, when is the shoe going to drop at Target, as good as they are?" Widlitz said. "Are they next?"
Target's holiday sales were more upbeat than most, and the company says it's still on track to make 2018 its best year for same-store sales growth since 2005. Unlike most of the department store operators, Target has found success in launching in-house brands for apparel and home goods that amass somewhat cultlike followings. And though its food business isn't on par with Walmart's, it still serves as a traffic driver to Target stores.
A company like J.C. Penney, on the other hand, is struggling to give shoppers a reason to go there when they could shop directly from a brand like Nike's website. Its stores are outdated, unsold inventory is piling up and merchandising isn't resonating with millennials, a key demographic that should be on all retailers' radars. Some analysts are wondering if it could be the next major retailer to head down the same path of now bankrupt Bon-Ton and Sears. J.C. Penney's stock hit a low of 92 cents on Dec. 27.
"The 2018 liquidation of Bon-Ton offers a salutary lesson regarding the market's growing impatience with troubled companies that have underinvested and executed well below better capitalized peers," Moody's analyst Christina Boni said. "The market's growing impatience will be putting a brighter spotlight on struggling companies like J.C. Penney during 2019. ... J.C. Penney has been a significant laggard."