It’s a Mixed Bag for Retailers

Middle-market department store operators such as Sears, Roebuck & Co. and J.C. Penney Co. are facing lower fourth-quarter earnings after holiday sales results fell short of projections, industry analysts said Monday.

Barring a disaster in January, most retailers outside the middle market are expected to meet earnings targets, analysts said. And upscale Nordstrom Inc. had a good holiday season.

“Earnings, for the most part, are expected to be OK,” said Merrill Lynch & Co. analyst Gerri Sommers.

Sales at several high-profile retailers were below forecasts, Sommers said, noting that promotions and sales have picked up in the last week.

As expected, the nation’s retailers had a strong Christmas week, which helped them gain ground on what was a slower-than-expected sales season.

Retailers are expected to report their December sales figures on Jan. 8. Results for the fiscal year ending in January will be reported in mid-February, with the exception of Sears, which is expected to report results in January for its year ending in December.

Wal-Mart Stores Inc., the largest retailer in the United States, said Friday that a strong week before Christmas was expected to help it meet its single-digit sales growth target for stores open more than a year--so-called same-store sales. Sales were below projections in the first three weeks of the holiday season.

Most discounters had expected same-store sales to show mid-single-digit increases.

Sommers noted that Federated Department Stores Inc. may be another retailer facing a tough fourth-quarter earnings outlook.

Performance at middle-market stores has been hurt by value formats and off-mall formats such as factory outlets and chains outside regional shopping centers, such as Gap Inc.’s Old Navy and Bed Bath & Beyond Inc.