(Updates with analyst notes and analysis in first through seventh paragraphs, further individual company information throughout.)
By Karen Talley
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Even massive markdowns and extended sales couldn't make Christmas merry for many retailers, and their generally sluggish December sales are reinforcing the reluctant realization that a slower economy has come home to consumers.
In reporting same-store sales for the holiday month, most retailers missed already-lackluster expectations, and a number also cut earnings projections.
"People are aware of what's going on in the economy and there is an amount of negativity in the air," said Marie Driscoll, equity retail analyst at Standard & Poor's.
As a result, bargain hunting drove the season, which means markdowns - and that leads to lower sales, margins and earnings.
Consumers have less discretionary income, given gas prices and inflation.
And overall retail sluggishness may last. On a broad basis, consumers have to be psychologically comfortable spending, afraid things aren't going to get worse for the economy.
And that's one of the reasons consumers may be taking some shelter in Wal-Mart Stores Inc. (NYSE:WMT) (WMT), which was one of December's winners, and whose stock is up 1.1% as a result.
Arguably the nation's biggest discounter, Wal-Mart (NYSE:WMT) posted sales at the higher end of forecasts and reiterated its fiscal fourth-quarter earnings forecast amid strength in grocery, pharmacy and electronics departments, while home and apparel sales fell - continuing a weak trend in those segments. Sam's Club (NYSE:WMT) , long the firm's better sales-growth performer, had a 1.3% increase amid "slightly lower" traffic and weakness in home furnishings.
Going ahead, Wal-Mart (NYSE:WMT) sees overall U.S. same-store sales rising about 2% in January, in line with November and December.
But many others took the opposite tact, cutting or tempering bottom-line expectations after missing projections. Kohl's Corp. (NYSE:KSS) (KSS), Men's Wearhouse Inc. (NYSE:MW) (MW) and American Eagle Outfitters Inc. (NYSE:AEO) (AEO) all fall into the group, showing that problems were not confined to a specific type of retailer. The news is being met with differing reactions. Men's Wearhouse (NYSE:MW) is off 29%, American Eagle Outfitters is up 4.7%, and Kohl's (NYSE:KSS) is off 1.1%.
In fact, investors in general appear to have been prepared for the permeating softness of retailers' results and aren't doing too much selling. The Dow Jones Wilshire U.S.
