NEW YORK (TheStreet) -- The fourth quarter of 2013 has not been kind for many retail stocks. Promotions pressured companies during the holiday season, a time when many retailers make a large portion of their annual sales.
Some traditional retailers slipped by unscathed, but many did not. As a result, their share prices are getting shellacked when they report earnings or issue negative preannouncements.
"Promotional, promotional, promotional." It's all we've heard since December in regard to the retail sector. Analysts knew it, the companies knew and we knew it.
So why didn't investors prepare for such a disaster? I don't know. Perhaps the broader stock market's outperformance reassured them. Or perhaps it was the correct sense that the economy and the consumer are still intact.
What I do know is why the traditional retailers are getting hurt. The tides have officially turned in favor of online shopping following the 2013 holiday season, as Amazon (AMZN - Get Report) has become the go-to place for shopping.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts