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Analysts are expecting weak results for the month at retailers across all of the major channels. "Virtually all interested parties have already concluded that December was a very weak month. Analyst earnings and comp estimates have been sliding and public commentary and press releases from companies have already stated poor December results," said Mark Montagna, analyst at CL King & Assoc., in a research note Monday.
Montagna also said that aggressive promotional activity at department stores will likely result in weaker results for specialty retailers as shoppers were lured away.
"We think December was a sluggish month for retailers and comps will be muted," added Roxanne Meyer, analyst at CIBC World Markets.
Analysts said macroeconomic indicators are continuing to hit sour notes with consumers, impacting their confidence. Last week, employment numbers showed the slowest growth in more than four years, and unemployment figures rose to the highest point since 2005.
Fears of a recession this year also affected holiday shopping throughout the Christmas season. A slight uptick in traffic and sales at the end of the season was not enough to offset overall weak sales, analysts said.
"We expect most of the broadline retailers to deliver on- to below-plan December comps, driven by a slower-than-expected pre-Christmas season," said Deborah Weinswig, Citigroup analyst, adding that "favorable weather and a pickup in last-minute and post-Christmas sales (driven by increased promotions)" will likely offset some of the negatives.
"Notably we expect apparel to be weak, while the high end should remain healthy," Weinswig said.
Still, there were other positives. Eric Beder, analyst at Brean Murray Carret & Co., said in a note that the investment community and press had ignored positive changes on the supply side that could buoy some retail results. Lower inventory levels drove strong margins at some retailers who could weather December results, he said.
As of Monday, the S&P Retail Index had declined about 9.6 percent since Dec. 24 versus a drop of 5.7 percent in the S&P 500, Beder noted.