Retailers including Gap, Urban Outfitters, Best Buy and Zumiez also struggled during the holiday period. On the flip side, strength from names including Lululemon, L Brands, Five Below, The Children’s Placeand Express revived hopes that retail sales would come in line with early forecasts. Ken Perkins, president of Retail Metrics, told CNBC last week that early results were coming in “better than feared.”
Among the troubled categories, sales at electronics and appliance stores fell 2.4 percent over the past 12 months, while department store revenues dropped 2 percent, according to the Commerce Department. Sales at clothing and accessories stores increased 2.1 percent, likely due to steep discounts and strong trends in athletic apparel, Barr said.
Online sales continued to be a standout, though softer-than-expected results from desktop computers caused preliminary numbers at comScore to come in just shy of expectations. The analytics firm said last week that it now expects overall online sales to increase 13 percent, compared with its forecast for 14 percent growth.
According to the NRF, online sales grew 9 percent to $105 billion.
“I think the news from today really tells us that we’re at a tipping point,” Barr said Friday. “The consumer will spend with the retailers that have the right products and the right experiences both in-store and online, but there’s a separation occurring.”
He added that he expects that separation to flow through to individual retailers’ respective profitability.
“The high-performers on the topline, we expect them to report strong [earnings] results because they were the retailers that did not have to play the promotion game.”
On the flip side, Marcum’s Ron Friedman said the retailers who routinely offered 50 to 70 percent off will suffer. He did, however, predict some of these companies will nonetheless manage to eke out a profit, as a result of cost savings.
“It’s nothing to see 70 percent discounts, which means the stores are selling [the product] for less than cost,” he said. “They’re just turning over inventory to create cash flow.”
Investors will have a better indication of which retailers outperformed — and underperformed — come February, when major companies release their fourth-quarter earnings. Analysts remain cautious on companies with exposure to apparel, particularly as it relates to their profitability.
“[Retail’s] earnings growth is still limited,” Perkins said.
Correction: NRF revised its initial report. This story has been updated to reflect that holiday sales increased to $626.1 billion.