Updated from 9:04 a.m. EST

The holiday shopping season shaped up to be a mixed bag for retailers, as several chain stores reported tepid December same-store sales amid heavy markdowns.

With 55 out of 56 retailers reporting their same-store sales results, 46% of them beat Wall Street's estimates, and 54% missed expectations, according to Thomson First Call. It marked the third month in a row that the majority of retailers missed analysts' projections.

"I'd have to categorize this as a bit disappointing," says Ken Perkins, president of the research firm Retail Metrics. "Overall holiday spending is somewhat subdued, and that's a little concerning heading into 2007. Sales got off to a slow start, and the final surge wasn't enough to get them over the hump."

Many companies blamed warmer-than-expected temperatures, which cut into sales of winter apparel and goods, as a reason for the sales shortfall. Analysts also suggested that the weak housing market played a role.

"The consumer is weak," says Howard Davidowitz, chairman of the retail consulting and investment-banking firm Davidowitz & Associates. "The consumer has record debt, negative savings, and they can't take their money out of their homes ... we've had a deceleration in residential home values, and that's the consumer's biggest asset."

Perkins also said that a strong increase in gift card sales, which are usually redeemed in January, have siphoned sales from December.

Among the biggest laggards in December were specialty retailers Gap ( GPS), AnnTaylor ( ANN) and Hot Topic ( HOTT).

The world's biggest retailer, Wal-Mart ( WMT), reported same-store sales of 1.6%, in line with its estimate given over the weekend. Analysts polled by Thomson First Call had expected same-store sales, or comps, to increase 1%.

The company said that overall sales were soft in apparel and home goods. Warmer-than-normal temperatures in most of the U.S. also contributed to a slowdown in sales of some winter seasonal items, Wal-Mart said.

Wal-Mart projected that January same-store sales would rise 1% to 2%. Wal-Mart also reiterated its fourth-quarter profit forecast for earnings from continuing operations of 88 cents to 92 cents a share. Wall Street is looking for earnings of 90 cents a share.

Wal-Mart's results, while better than expected, proved to be a drag on the entire sector. Thomson said its same-store sales index showed average growth of 3.3%, but excluding Wal-Mart, this figure jumped to 4.7%.

Target's ( TGT) same-store sales increased 4.1%, in line with its expectations but slightly shy of Wall Street's forecast of 4.5%.

At Gap, same-store sales sank 8%, worse than analysts' expectation for a 5.1% drop. The company blamed the weakness on poor trends at its Gap and Old Navy brands, where same-store sales fell 9% and 10% respectively. Gap cut its full-year earnings forecast to 83 cents to 87 cents a share from its previous guidance of $1.01 to $1.06.

"Given the weak traffic trends, we needed to take significant action on promotions and markdowns at these two brands which drove Gap Inc.'s overall merchandise margins significantly below last year. We expect continued margin pressure into January as we work to clear remaining holiday product at Gap and Old Navy," the company said.

Another big apparel seller, AnnTaylor, reported a 5.3% drop in same-store sales and said it now expects full-year earnings to be somewhat below its guidance of $2.07 to $2.12 a share.

"December was clearly our most challenging month of the year. Our results for both brands were soft in the cold weather categories of sweaters, outerwear and cold weather accessories, compared to strong demand for these products in 2005," said CEO Kay Krill in a statement.

Federated Department Stores ( FD) also missed estimates. The operator of Macy's and Bloomingdale's said same-store sales rose 4.4%, below its forecast for 5% to 8% growth. Wall Street had expected a 5.5% rise.

Kohl's ( KSS) posted a comp-store sales increase of 3%, while Wall Street was looking for 3.2% growth. The company said it was comfortable with its previous earnings guidance of $1.36 to $1.42 a share for the fourth quarter. Wall Street is looking for earnings of $1.42 a share.

"December's sales results were driven by strong performance over the last two weeks as a result of last-minute shoppers in the fourth week and gift card redemptions in the last week of the month," said Larry Montgomery, Kohl's chairman and CEO. "This helped offset weak consumer demand of cold-weather merchandise such as outerwear, sweaters, and boots throughout the month."

In the warehouse sector, Costco ( COST) said comp sales climbed 9%, beating analysts' expectations of 5.7%. The company reported net sales of $7.24 billion, up 14% from a year ago.

BJ's Wholesale Club ( BJ) said same-store sales rose 0.6% in December, below the 1.3% gain predicted by First Call. BJ's said it expects same-store sales to rise 1% to 3% in January.

The company said it will take several charges, resulting in earnings of 17 cents to 25 cents a share for the fourth quarter, below the 83-cent Wall Street's expectations.

J.C. Penney ( JCP) said comp sales increased 2.6%. Analysts expected growth of 2.4%. Total department store sales for the five weeks ended Dec. 30 increased 4.2% to $2.96 billion. The company said that January same-store sales are expected to increase in the low single digits and that direct sales are expected to be down slightly.

High-end specialty retailer Nordstrom ( JWN) said same-store sales rose 9%, beating Wall Street's expectation of 4.3%. Total sales for the period rose 9.8% to $1.27 billion from $1.16 billion from a year earlier.

Pier 1 Imports ( PIR) continued to lag, with same-store sales dropping 10.7%. Analysts had predicted a 9.4% fall.

In the teen space, Hot Topic reported a same-store sales drop of 5.1%, while analysts were looking for 3.4% decline. The weak results led the company to slash its fourth-quarter outlook, sending shares down 19% Thursday.

Overall, Davidowitz notes that some areas did well, including online shopping and the luxury sector, but he says he is pessimistic.

"When the consumer assesses his financial condition," he says, "he's going to have to save more. And that ain't good for retail sales."

Scott Rothbort, founder of LakeView Asset Management and a contributor to Street Insight, had a more positive view on the December results. He says the comp sales indicate that shoppers are discerning and that "they shop where they want to shop, not where the media tells them."

"There's nothing new here," he says. "We knew which ones are doing well and which ones fumbled the ball."

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