It easy enough to increase sales if you discount enough. Profits are another matter as I have warned repeatedly throughout the Christmas season. Nordstrom and Macy's did well but 4th quarter earnings estimates missed guidance in a number of high-profile retailers.



The New York Times reports Retail Sales Edged Up in December After Stores Cut Prices Sharply



Sales at stores open at least a year at major retail chains rose 3.4 percent compared with December 2010, according to data compiled by Thomson Reuters, just above the 3.3 percent that analysts had expected.



But the cost of propping up sales was high. Profits “were a mess” for many retailers, said Paul Lejuez, an analyst at Nomura Equity Research. Consumers were buying less than retailers had expected, and stores had to mark down inventory to get it out the door by Christmas.



“Retailers came in with pretty conservative assumptions, and they were hoping to blow them out of the water — they really didn’t,” said David L. Bassuk, managing director and head of the retail practice at AlixPartners, a consulting firm. Retailers were resorting to promotions like “ ‘50 percent off our whole store,’ ‘60 percent off our whole store,’ which is when you can see times are tough,” he said.

Target reduced its fourth-quarter earnings expectations to $1.35 to $1.43 a share from prior estimates of $1.43 to $1.53 a share.

its fourth-quarter earnings expectations to $1.35 to $1.43 a share from prior estimates of $1.43 to $1.53 a share. Kohl's reduced its fourth-quarter earnings expectations to $1.70 to $1.73 per share, from $1.93 to $2.04 a share.

its fourth-quarter earnings expectations to $1.70 to $1.73 per share, from $1.93 to $2.04 a share. J. C. Penney reduced its fourth-quarter earnings expectations to $.65 to $.70 from $1.05 to $1.15 a share.

its fourth-quarter earnings expectations to $.65 to $.70 from $1.05 to $1.15 a share. American Eagle reduced its fourth-quarter earnings expectations to $.33 to $.35 per share from $.40 to $.44 cents.

its fourth-quarter earnings expectations to $.33 to $.35 per share from $.40 to $.44 cents. Macy’s raised fourth-quarter earnings expectations to $1.55 to $1.60 a share, up from $1.52 to $1.57 a share.