Target, Penney Lower Profit Outlook

The slowest holiday shopping season in five years may signal disappointing earnings well into next year for U.S. retailers including Target Corp., Plano-based J.C. Penney Co. and Dillard's Inc.

Goldman Sachs Group Inc. analysts lowered earnings projections for the year ending in early 2009 at 12 retailers last week. The average estimates for the five biggest U.S. department stores, led by Sears Holdings Corp., have declined the past four weeks, according to data compiled by Bloomberg.

The dimming prospects have weighed on retailers' stock prices. The 30-member Standard & Poor's 500 Retailing Index fell 0.1 percent to 433.21 at 9:39 a.m. Monday. It dropped 5.9 percent from Nov. 1, when the industry's holiday season began, through Friday. The S&P 500 index declined 4.4 percent during that time.

"Everyone is cutting numbers," Jon Fisher, who helps manage $22 billion, including retailers' shares, at Fifth Third Asset Management in Minneapolis, said Nov. 30. "The pace seems to be accelerating as analysts are scrambling to play catch-up. In two or three months, we are going to see the companies themselves cutting numbers."

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