Upscale menswear firm Perry Ellis International (NASDAQ: PERY) is the latest firm to hit Wall Street with a bleak outlook on retail sales. This morning, the company unveiled its preliminary third-quarter results and dramatically slashed its earnings guidance for fiscal 2009. Chairman and CEO George Feldenkreis warned, "Our retail partners are expecting an extremely promotional Christmas season, but at this point, we have no visibility on what the Thanksgiving weekend and the Christmas season will bring."

In the third quarter, PERY anticipates diluted earnings per share of 30 to 33 cents per share, compared to 55 cents in the same quarter of 2007. Revenue for the period is expected to decline 2% from last year to $222.8 million. The final results will be released on November 20, ahead of the opening bell.

Looking ahead to 2009, the clothing concern trimmed its fiscal-year earnings guidance from $1.67 to $1.72 per fully diluted share to a range between 90 cents and $1.10 per fully diluted share. The updated forecast accounts for one-time expenses of 10 to 15 cents per share related to a strategic review of the company's brands and businesses. Revenue for 2009 is now projected to fall between $875 million and $900 million, down from a prior forecast of $910 million to $925 million.

Feldenkreis noted that the formal review process should help make PERY "a stronger and more nimble company when the economy turns around."

In light of today's slashed forecast and uncertain outlook from Perry Ellis, the stock could be hit with downgrades or price-target cuts. Zacks reports that 3 out of 5 analysts following the shares maintain a bullish Strong Buy opinion, while Thomson Financial pegs the average 12-month price target at $16.40. This consensus estimate implies an expected upside of 211% from PERY's closing price on Wednesday -- leaving ample opportunity for potential downward revisions.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

The carnage at Circuit City Stores Inc. (NYSE: CC) continues as the company flails desperately -- and probably futilely -- to avoid a bankruptcy filing. The company announced that is laying off hundreds of workers at its Richmond, VA, headquarters, on top of previously announced store closings, liquidations, and 6,800 store-level layoffs. This is all in the past week.

Spokesman Bill Cimino told The Wall Street Journal (subscription required) that "Out of respect for our associates, we're not commenting" on the details of the layoffs.

The company's stock closed at 25 cents on Friday, down from a 52-week high of $8.24. Back in 2006, the company's stock traded as high as $30 per share. In 2000, the shares briefly traded at more than $50 per share.

The company's cash problems and inability to get suppliers to extend credit will prevent the company from being competitive during the holiday selling season that is its last chance to save itself.

Sears Holding Corp. (NASDAQ: SHLD) may have enough capital to get the inventory it needs for its stores during holiday season, but the chain now needs to worry about whether its potential customers will have access to credit.

According to Bloomberg News, Home Depot (NYSE: HD), Sears, "and other retailers may lose as much as 8 percent of their holiday sales this year because lenders and stores are clamping down on financing."

For a company struggle as much as Sears, that much damage to sales could cause the company to close hundreds of stores and put tens of thousand of people out of work. Along with all of its brands, Sears has 3,800 stores and 337,000 employees. If its average store loses close to 10% of sales, weaker ones in the states hardest hit by the recession could lose 15% or 20%.

Sears might offer more credit to customers, but it risks that a large part of them will default or delay payments as the economy gets worse.

The Sears problem is an especially good example of what happens when a large economy goes into a flat spin. As revenue at companies drops due to falling consumer spending, those firms have to layoff workers to make ends meet. Those workers, in turn, are no longer consumers and their loss of spending power hurts GDP even more.

Sears is a weaker retailer then some, and the chances that it will have to downsize to survive are very high.

Douglas A. McIntyre is an editor at 247wallst.com.

Up until very recently, retail executives were hoping holiday sales might be up 2% or 3%, but most of that optimism has faded. According to The Wall Street Journal, "Chief marketing officers at 100 retail companies said in a survey by BDO Seidman LLP that they expect their companies' same-store sales in November and December to fall an average of 2.7%."

Declining sales mean some retailer companies either won't make it or will be faced with significant store closures and layoffs. Circuit City (NYSE: CC) is likely to fold as may some small retailers.

Watch for a number of other retailers to hit 52-week lows, especially those that were struggling before the downturn.

At the top of that list put Sears (NASDAQ: SHLD). Same-store sales are already weak. The stock is off to near a 52-week low at $47.57 against a 52-week high of almost $140. The retailer could easily close hundreds of stores and see its share move toward $30.

Another retailer that is having huge sales problems is Gap (NYSE: GPS). It should have closed its Old Navy line a year ago. Now, that is more likely. The stock trades at $11, down by half from its period high. Unless it does some store triage, Gap stock would go below $7.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Amazon.com (NASDAQ: AMZN) had one heckuva holiday shopping season this year. In fact, it was the best season ever in terms of sales in the 13-year history of the company, according to the world's largest internet retailer.

Saying that the 2007 holiday shopping season was the strongest ever since opening its virtual doors in 1994, Amazon said that customers ordered more than 5.4 million items -- 62.5 items per second -- in a single day (December 10). In 2006, Amazon's busiest day saw sales of 4 million products, so this year was quite a lift indeed. The top items this year? The Jakks EyeClops Bionic Eye, Nintendo Wii game consoles, GPS systems and flat-panel television sets.

Have most customer shifted to online merchants this year instead of visiting local brick-and-mortar outlets for their holiday gift needs? Many retailers expect to see soft retail sales throughout December this year, but the shaky consumer environment apparently did not affect Amazon's sales this year. Of course, now all those credit cards are probably more plumped than the Christmas turkey.

With the last full shopping week before Christmas well underway, retail analysts are scrutinizing every sale at many national retailers to see how consumer spending is shaping up this holiday season amid recession fears that drove the stock market down a pretty decent chunk yesterday. Consumer electronics giant Circuit City (NYSE: CC) is set to report earnings come this Friday in what is expected to be another disastrous quarter for the retailer. Will this follow through to other retailers due to a soft holiday shopping season? With larger competitor Best Buy (NYSE: BBY) reporting Q3 numbers today, we may have quite a contrast in results come this end of this week -- or not.

Although November retail numbers were better than expected due to the full week of holiday shopping after the Black Friday shopping day, that kind of result should not be expected in December. Marshal Cohen of research firm NPD Group said that "while the November numbers make it look merry, some challenges lie ahead. Discounts work to some degree, but retailers still need generate excitement ... and there's still a lack of new products." Enough said? But I love this quote from Britt Beemer of the Americas Research Group: "I have to conclude that retailers don't try to understand today's consumer as they focus on Wall Street and their share value." I agree 100% from my end.

So, what will December retail holiday sales bring? A string of disappointments to add more fuel to consumer spending fears and an upcoming recession, or a mild reaction from Wall Street when the smoke clears on December 26th? If you own retail stocks now, be watching for results next week -- and you may not want to keep tabs on your portfolio at the same time unless you have a large stomach.

Target (NYSE: TGT) generally is not in the spot of releasing depressing news, but it does happen occasionally. The Wal-Mart (NYSE: WMT) competitor, who is flashier and trendier despite selling much of the same merchandise (but marketed much better) said this week holiday shopping began slower than it had expected, and that Q4 profits might fall "well short" of analyst expectations.

Them's fightin' words, and as such, Target shares slid about 7% on the news yesterday. Target shares, which closed above $60 Wednesday, saw a slip to below $54 yesterday and has recovered a bit to over $55 this morning. Is this the end? Of course not, but when a holier-than-thou retailer with a rosy amount of Wall Street cred announces a downfall in guidance and disappointing holiday sales (at least, at the start), things are sure to happen. And happen they did.

Although Target execs said that sales the two days after Thanksgiving met its expectations, sales during the final week of November were soft in hot holiday categories such as toys, holiday merchandise and home and apparel goods. In addition, same-store sales rose just 1.1% when adjusted for an unusual full week that existed this year after Thanksgiving. Are customers really pulling back on holiday spending this year as Target's results would seem to indicate? Outside of the Black Friday and Cyber Monday shopping days, maybe that's the case. We won't know real details until December's conclusion, though.

This week's Cyber Monday retail event on the internet is shaping up to be the best ever, according to many retail industry watchers. Retailers Wal-Mart Stores Inc. (NYSE: WMT) and Circuit City Stores Inc. (NYSE: CC) had heavy promotions this past Monday, along with online-only retailers Amazon.com (NASDAQ: AMZN) and Buy.com.

Did possible record sales come after heavy price chopping, or was the Cyber Monday sales push more customer-driven? Heavy discounting already is being looked at as the cause, and although legit, it could cause a large dip in profits to those retailers overexercising the strategy.

Now that Black Friday and Cyber Monday are over, retailers nationwide will continue the price discounting this week (and beyond) to keep those sales pouring in all the way until the end of December. Some retailers are taking the discount versus profit line this week, as 50% off is being seen at many online outlets, which is sure to cause a profit knock at the end of the day.

Is this any surprise? Not really -- loss leaders are always used to hook consumers looking for bargains into stores (and online retailer websites) where they are either ferociously upsold more expensive products or are extensively cross-sold more products than they came looking for.

It's the savvy consumer who seeks out a good bargain and leaves with just that item (or items) that retailers don't really want. But the U.S. consumer is a savvy one indeed, and the more tactics retailers use to push non-bargain products, the more consumers shrug them off.

It's been said that there are no "must have" gift products this year. These products, based on the law of supply and demand, command premium prices. When there is a lack of that kind of product, the only recourse many retailers have is to slash prices to get customers lifting up their spending. Although the holiday shopping season this year may indeed be a large one, will any companies make significant profit? Is there a goal of selling as much as possible while making very little profit in the process?

The next time you're in a retail store paying for your purchase with a credit or debit card, you may want to take a deep breath. That credit card machine that verifies your customer status and credit line/checking account balance may be broadcasting that sensitive financial information right into the air. With the right equipment, data thieves may even be able to snatch it.

Similar to how some folks piggyback on their neighbors' Wi-Fi wireless internet connections, data thieves could be sitting outside the entrance to a local Best Buy (NYSE: BBY) or Target (NYSE: TGT) location just waiting to snatch those wireless transmissions from the air and possibly see all that personal, financial information. Yes, it's the kind used to steal one's identity.

According to some industry watchers, purchasing goods this holiday season using a website and credit card may actually be safer than swiping a physical card at a retail location just due to the security provided. Are those wireless credit card machines securely encrypted at all your favorite retail locations?

Sounds odd, but it never hurts to ask for a store manager and see what the answer is. Otherwise, one of those retailers could be broadcasting your information to whoever is listening just outside the door. With millions of credit card transactions set to take place in the next month, perhaps the information technology teams of these retailers should ensure customer information is completely protected.

According to retail tracking experts ShopperTrak RCT Corp., this year's holiday shopping season, which officially began this past Friday, was off to a "very strong" start. To those economists and retail pundits that were buckled in for a bumpy ride to kick off the holiday shopping season, this is probably a big sign of relief. Yes, you can put those Pepto Bismol bottles down now, folks.

Although one report doesn't make a whole season better, the report from ShopperTrak estimated Black Friday sales this year up 8.3% over last year, with sales this past Friday alone totaling $10.3 billion from retail outlets across the U.S. ShopperTrak thought, as do I, that even in the face of rising energy prices and credit tightness due to risky loan defaults and mortgage resets, it takes a lot more than that for consumers to curb holiday spending.

The long haul now takes over, as estimates and details will pour in week by week through the Christmas holiday until it's very clear that the success from last week's Black Friday holiday spending kickoff will last all the way through December. Although today is Cyber Monday (when everyone begins shopping online at work), even online retailers saw excellent activity this past Friday. Visitors directed from www.shopping.com to its merchants increased 61% from 2006 levels, and eBay (NASDAQ: EBAY) even said that customers are picking up their computer mice more than their car keys. That makes for a nice quote more than it gives us meaningful data. We'll see if it stacks up after results come in from today's online shopping activity.

The Associated Press reports that it will cost $19,507 to buy just once the items on the 12 Days of Christmas List this year, up 3% from 2006's $18,920.

PNC Wealth Management itemized the list (the 2006 figures are in parentheses):

• Partridge, $15 ($15)
• Pear Tree, $150 ($130)
• Two Turtle Doves, $40 ($40)
• Three French Hens, $45 ($45)
• Four Calling Birds (canaries), $600 ($480)
• Five Gold Rings, $395 ($325)

ShopperTrak RCT Corp says that retail sales on Black Friday rose 8.3% according to a report at Bloomberg. "It's an extraordinary number, beyond what we anticipated,'' Bill Martin, co-founder of ShopperTrak, said in an interview with the news service. The research firm says that sales on Friday are usually about 5% of all holiday sales.

What the report fails to say, but should concern retailers, is how much they had to give up on pricing to get customers into stores. If foot traffic was not high enough for some chains, it is likely that they will move prices down on some items again in an attempt to clear out inventory by the end of December.

The National Retail Federation in Washington only expects sales to rise 4% in November and December, a number that is not enough to support any real recovery in the retail sector, which has been hurt by both fuel prices and softness in the housing industry.

If late November sales are running better than expected, it may cause a turnaround in Wall Street's expectation for the holiday and lift shares in companies like Wal-Mart (NYSE: WMT). It would also point to unanticipated strength in consumer spending.

Economists still expect that, if there is a recession, the consumer, who has kept the economy afloat for so long, will lead the fall into negative growth. The theory is that he has simply carried US spending on his back for too long.

What if he actually has the strength to carry it further?

Douglas A. McIntyre is an editor at 247wallst.com.

The head of Walmart.com says that Halloween sales were particularly strong. And, he thinks the upcoming holiday season will do just as well. "Customers are still spending for the holidays. Halloween was very good for us, so I suspect that Christmas is going to be great," said Raul Vazquez in a talk with Reuters.

The website may be benefiting from the fact that parent Wal-Mart (NYSE: WMT) cut holiday prices early this year, about a month ahead of the normal Thanksgiving weekend time frame.

But there could be other explanations. Wal-Mart has been especially good at tying its website to its stores. Customers can order items on the internet and pick them up at the local retail outlet, saving shipping charges. This combination of convenience and low price may be increasing use of the website.

The other reason the site may be doing well is the rotation away from buying goods in stores and toward buying online. While same-store sales at many big retailers are relatively flat, e-commerce revenue is expected to rise over 20% in the last two months of the year.

Or, there is one other explanation. Wal-Mart may be doing better than most investors think.

Douglas A. McIntyre is an editor at 247wallst.com.

Are PC sales dead? Far from it! The personal computer's demise has been predicted in many circles for years now as applications and tools move to the internet from the computer hard drive. But then again, you have Microsoft Corp. (NASDAQ: MSFT) and Apple, Inc. (NASDAQ: AAPL) both releasing brand-new operating systems this year and trumpeting them all over the world. In Microsoft's case, it's Windows Vista and in Apple's case, it's the Leopard operating system.

The market continues to shift from powerful but bulky desktop PCs toward notebook PCs, and that trend will continue into the holiday season this year. It's scary to think that PC sales would eventually slow down after everyone has bought a notebook, but just in case that happens PC makers are shifting sales focus to markets outside the U.S., something that has been increasing in scale this year.

Let's put it this way -- out of the top consumer electronics "must have" items as measured for this holiday season by the Consumer Electronics Association, computers beat out big-screen TVs, clothes and money (among other things). As measured in the third quarter of this year, PC sales in the U.S. grew at about a 5% rate compared with a 15.5% rate across the rest of the globe.



So PCs are catching fire in many other areas outside the U.S. even as respectable single-digit growth happens here. For an old technology that just continues to apparently get better, PCs are long from dead. My guess is that the hardware is basically no more than a strong commodity, but the internet is what is driving sales of PCs. If you're not connected, then who are you? Someone in the market for a PC, that's who.