While you probably won't see many more doors closing before the end of the year, expect to see weak retailers facing liquidations if the holiday season is as bad as many predict it will be. We've already seen 22 retailers file for bankruptcy including Steve & Barry's, Circuit City and Linens 'n Things. Some may survive bankruptcy reorganization and live to see another day. Other retailers may not be able to find the funds to refinance and will be forced to liquidate and close.

Locally, near me in Florida, only one Circuit City has closed and you don't see much evidence of the bankruptcy. Shelves are not stocked as well and advertising is down, but you'd only know that if you watch the stores closely.

The top retailers, such as Wal-Mart (NYSE: WMT) and Best Buy (NYSE: BBY) will survive easily, but many second and third tier retailers will be struggling to make it. Standard & Poors downgraded the credit rating for 53 retailers already this year, which is higher than the total number of downgrades for all of 2007, and it expects to downgrade more before year end. Deloitte Research Chief Economist Carl Steidtmann told Business Week, "It's been a long time since we've seen an environment as challenging as this."

We all know that this Christmas is going to be particularly tough on retailers. Wal-Mart (NYSE: WMT), Target (NYSE: TGT), Sears (NASDAQ: SHLD), and Best Buy (NYSE: BBY), as well as hipper competitors Abercrombie & Fitch (NYSE: ANF) and Gap (NYSE: GPS), will be fighting it out at the mall Mad-Max style the next several weeks.

It's not going to be pretty. With comps and cash flows on the line, these chains will be looking to extract as much discretionary money from consumer wallets as is heavenly possible. But there's a troubling sign with respect to a popular gift option this year.

Gift cards have been soaring in popularity over the years. Not only do they make great presents, but retailers love them because they represent a little insurance policy: if the Christmas quarter isn't as strong as a retailer would like, then redemption of gift cards will theoretically help the bottom line in the next quarter. The card purchases do not get recorded as a sale until they are redeemed. So it's like a squirrel putting food away for the long, cold winter.

Unfortunately, we have some bad news on this front: gift-card sales are expected to be down 6% this season. That's not what retail investors want to hear. It's just another reason for traders to short this sector.

Target (NYSE: TGT), arch competitor of Wal-Mart (NYSE: WMT), Sears Holdings (NASDAQ: SHLD), and Best Buy (NYSE: BBY), reported earnings for the third quarter on Monday. According to my earnings preview, the call was for $0.49 per share. On that basis, Target met the expectations of analysts. But I've read some other headlines that said that estimates were beat. Apparently some of us are working off different data. No matter; it was a dismal quarter no matter how you slice it.

According to the press release, net sales advanced a mere 1.7%. Worse, same-store sales dropped over 3%. That's the important figure to consider when talking about retail. Target did okay in terms of cash from operations, but that doesn't mean that things will be great going forward. Not at all. In fact, although management produced a gain in operational cash flow, all of it -- and more -- was taken up by capital expenditures. This issue of cash is actually the big angle of the story for me. Management states in the release that it has stopped share-buyback activity and that it intends to be conservative concerning capital spending. It literally mentioned that its business is not necessarily attractive to invest in at the moment.

If that's the case, should you buy the stock now? I'd say you better think long and hard before buying Target at its current price level. As I write this, the stock is down about 2.5%. It isn't at the 52-week low, but I don't see how it won't go back there, and beyond, before the year is out. Is Target most likely a good long-term play? I'd say the company is. But it's difficult to look at this report and say that now is the time to buy, even for long-term thinkers. Sales are down, the company's credit-card business isn't scoring any points, and the outlook is not favorable. I guess I'm in a bearish mood when it comes to the bullseye retailer...

Disclosure: I don't own any company mentioned; positions can change at any time.

Last week, JA Solar Holdings Co. Ltd. (NASDAQ: JASO) posted a quarterly loss and lowered its guidance. But as interest in alternative energy continues to grow, analysts polled by Thomson Financial are still looking for good things from solar energy concerns scheduled to report earnings this week.

Strong growth at Trina Solar Ltd. (NYSE: TSL) in the third quarter prompted it to lift its guidance back in October. Analysts expect the Chinese company to post profits that are 76.3% higher than a year ago, or $1.18 per share on revenues of $268.4 million (+225.0%). Though Trina Solar missed estimates in the second quarter, analysts on average recommend buying TSL. Shares are down 81.4% from a year ago and trading near an all-time low.

Earnings of rival LDK Solar Co. Ltd. (NYSE: LDK) are expect to have risen 47.9% to $0.71 per share on revenues of $486.7 million (+206.6%). Also based in China, LDK has not missed estimates in recent quarters; in fact, it blew past expectations in the second quarter. Yet the consensus recommendation is to hold LDK. Like Trina Solar, LDK's shares are trading near an all-time low; the share price has fallen 50.0% in the past year.

Analysts anticipate third-quarter earnings for Canadian Solar Inc. (NASDAQ: CSIQ) to be a whopping 96.3% higher than a year ago, or $0.54 per share on revenues of $248.0 million (+154.5%). The company easily topped estimates in the previous quarter. ReneSola Ltd. (NYSE: SOL) and Suntech Power Holdings Co. Ltd. (NYSE: STP) are also expected to report earnings growth of 29.7% ($0.37 per share) and 23.8% ($0.42 per share), respectively. All three of these stocks reached 52-week lows last week, and all are considered buys.

Abercrombie & Fitch Co. (NYSE: ANF), the hip clothing store that competes with The Gap, Inc. (NYSE: GPS) and J.C. Penney Company, Inc. (NYSE: JCP), is no different than any other retailer. Christmas is going to hurt... hurt bad. Make no mistake. And as far as earnings reports goes, the pattern is in: report a decline, then issue some nasty guidance.

Abercrombie reported Q3 numbers today, and according to the press release, net sales decreased 8%, and earnings per diluted share declined 44% to $0.72. As Melly Alazraki reported this morning, that $0.72 beat analyst estimates. But the market could care less. As Melly pointed out, the full-year outlook was cut. The stock sold off upon the news. In fact, as I write this, the stock is down nearly 15%. By the way, if by the time this is published the market is up and Abercrombie's shares are trading in the green (big if, granted), don't even think it's a buy. Put that out of your mind. Did you see the same-store sales? They were down 14% for the quarter. That figure is grabbing the attention of investors, I'm sure. When you see a downturn like that, well, you know things aren't going to turn around quickly.

Abercrombie's woes will be with it for a while. Management will find it difficult to strike the right balance between staffing the stores properly and increasing marketing activities. All retailers will be in the same boat. The stock hit a new 52-week low today of $18.83. My guess is that the stock will be as volatile as the market, and that it will trend in a downward direction over the next couple months. Obviously I don't think it's a buy. Broken stock and broken fundamentals aren't a great combo. Abercrombie continues to plan for new store openings in fiscal 2008; perhaps those investments will pay off down the line. For now, the retail sector is doing horribly, competition in the sector is becoming cutthroat as consumer confidence loses value, and I continue to look at only two names -- Wal-Mart (NYSE: WMT) and Target (NYSE: TGT) -- as possible long-term values. Yep, Abercrombie & Fitch isn't so sexy anymore.

Disclosure: I don't own any company mentioned; positions can change at any time.

Kohl's Corp (NYSE: KSS) reported Q3 earnings on Thursday after the bell. I didn't like what I saw. I couldn't find anything in there that would make me think the stock is a buy at this time. Well, there were a couple good points, but they didn't sway me.

Net revenues were pretty much flat at $3.8 billion. The bottom line came in at $0.52 per diluted share. Last year at this time, Kohl's delivered $0.61 per diluted share in net income. That's a 15% drop, and that isn't good, even if earnings beat expectations by a penny.

So, we got a flat top line and a declining bottom line. Want some more bad news? This is probably the worst metric: same-store sales decreased well over 6% for the quarter. Plus, they declined 6% for the nine-month period. As can be seen, things are getting worse for Kohl's. Same-store sales are indeed a key measure of a retailer's strength, so even though management did well in terms of gross margin and operational cash flow (the latter took a big jump, moving up 175% due to changes in working capital relating to inventories), I can't find it within me to be even remotely bullish on this business.

Do you like shopping at Target (NYSE: TGT)? Many people do. In fact, investors are hoping that so many people like buying things at the bullseye retailer that the company will beat earnings expectations for the third quarter. Target will be reporting on Monday, November 17. What should we expect?

Shareholders should expect a drop in the bottom line. Now, did we need a source to tell us this? Probably not. The consumer is starting to feel scared, there's no doubt about it. I'm sure everyone has anecdotal evidence concerning the fear that is out there. Consumers are afraid that the job cuts being reported in the papers will eventually reach their cubicle, so they're scaling back on spending. So, if Target merely meets the expectation for $0.49 per share next Monday, I'm sure many shareholders will breathe a sigh of relief, even though that will represent about a 12% drop in per-share profit.

I'm not so sure Target will beat, though. For one thing, Brent Archer recently reported on Target's lousy October sales data. They missed Wall Street's mark. Since Target beat the last two quarters; I figure we're due for a miss considering everything that's been going on. We shall see. I'll be interested to see how the margins are doing and what kind of position the company may be in going into Black Friday. And I'll be looking at the comps, of course.

When you think about retail stocks, which ones come to mind? For me, Wal-Mart (NYSE: WMT) and Target (NYSE: TGT) are at the top of the list. I think it has to do with the powerful brand equity that both possess. That, and they receive a lot of press between them. Honestly, I don't think of TJX (NYSE: TJX) as being in that league. I don't shop at T.J. Maxx, Marshalls, or any of the company's brands. I don't know many people who do.

But I thought I would take a look at the retailer's latest earnings report to see how it was doing. Unfortunately, there was nothing too impressive about the numbers. It wasn't disastrous or anything like that, it just didn't convince me that more due diligence was necessary.

For the fiscal third quarter, diluted earnings per share on an adjusted basis dropped two pennies to $0.54. The bottom line met results. Excluding the effect of currency exchange, same-store sales rose 1%. Not that great, really. Plus, the outlook from management was cautious, as one might expect. I will give TJX credit for its cash-flow statement: there was a nice increase in the amount of cash the company generated from operations for the thirty-nine-week period.

Target (NYSE: TGT - option chain) shares are falling today after the company reported a 4.8 percent decline in October same-store sales this morning, worse than the 2.8 percent predicted by analysts. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TGT.

This morning, TGT opened at $37.11. So far today the stock has hit a low of $36.74 and a high of $39.11. As of 12:25, TGT is trading at $36.77, down 98 cents (2.6%). The chart for TGT looks neutral and S&P gives TGT a 3 STARS (out of 5) hold ranking.

For a bearish hedged play on this stock, I would consider a November bear-call credit spread above the $45 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in two weeks as long as TGT is below $45 at November expiration. Target would have to rise by more than 22% before we would start to lose money. Learn more about this type of trade here.

TGT has been above $45 as recently as early October but has fallen sharply since and shown resistance around $42 over the past month.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in TGT.

Now that Senator Barack Obama has turned into President-elect Barack Obama, I feel that the retail sector needs to be looked at. And one of the better ideas out there just might be Best Buy (NYSE: BBY).

Here's my thinking. Obama seems to be a Democrat who, whether he wants to promote this or not, is into wealth redistribution. I believe he will do what he can to increase the taxes on wealthy individuals and lower them on not-so-wealthy individuals. Furthermore, I anticipate more stimulus checks under his administration. I don't think that the economy is going to get better overnight once he takes office in January, and I would imagine that he'll want to send more money to the masses to see if our consumer culture might be able to save the country from its current financial mess by spending freely. Since Wall Street fat cats have been reaping huge bonuses, I think an Obama administration will see fit to spread wealth to those who don't live in mansions built on the failed promise (and premise for that matter) of mortgage-backed securities.

RadioShack Corporation (NYSE: RSH) reported earnings for the third quarter the other day, and according to the bullet points of this article, the electronics retailer beat analyst expectations by three pennies. Earnings came in at $0.39 per share. And I say, so what?

Why do I say this? Well, to be honest, RadioShack has never been my favorite retail investment idea. No, I've never had a problem at any of the company's locations, but seriously, how often do you hear people talk about RadioShack? I don't hear many people talk about the place, I can tell you that. Best Buy Co., Inc. (NYSE: BBY), Wal-Mart Stores, Inc. (NYSE: WMT), Target Corporation (NYSE: TGT) -- these are the retailers people think of first when they think of electronics, fair or not. At least, that's what I've been getting lately. And here's an interesting wrinkle to the earnings report. Sales were driven by those digital converter devices that many households will need to use their television sets once digital broadcasting begins in February 2009. Not that this is an original observation, but when I read that, I immediately thought to myself "well, where does RadioShack go from here?" The company is going to find it tough to stand out among the crowd in the next few months. Brand equity is really going to come into play. The brand equities of the aforementioned competitors will aid them in bringing traffic onto their sales floors. When it comes to a day like Black Friday, which is the kickoff to the holiday shopping season, I think consumers will be most excited about the deals they can get at a Wal-Mart or a Target and not the ones they can get at a RadioShack.

Sure, that might sound obvious, but it's one of the reasons why I wouldn't want to put money down on RadioShack. The company's stock is near a 52-week low, but it's not a buy. Management is trying to improve its standing in the eye of the electronics consumer, but it'll be a long time before that happens. Besides, the bigger stores simply have more to offer both in terms of shopping experience and one-stop buying. There theoretically will always be a place for a RadioShack. But there's not a place for it, at least at this time, in my portfolio.

Disclosure: I don't own any company mentioned; positions can change at any time.

Amazon (NASDAQ: AMZN), which competes with the e-commerce segments of companies such as Yahoo! (NASDAQ: YHOO), eBay (NASDAQ: EBAY), Time Warner's (NYSE: TWX) AOL, and Apple (NASDAQ: AAPL), closed on Wednesday at $49.99. After hours, it plunged to $42.98, a drop of 14%, following its earnings report. Actually, I didn't think the numbers were that bad. Sales increased 31%, and earnings per share came in at 27 cents per share on a diluted basis. That performance represented a growth rate of 42%, and it was 2 cents ahead of Wall Street expectations.

As you can imagine, though, it's the fear of what lies ahead that's put pressure on Amazon's stock. Management has stated it intends to carefully assess its investment priorities. The economy is getting worse, and all retailers, online or brick-and-mortar, from Wal-Mart (NYSE: WMT) to Target (NYSE: TGT), are going to feel the sting of the careful-spending consumer.

Amazon is going to continue doing what it does best: namely, keep its corporate head to the ground and process those holiday orders. But I have to wonder if there is an opportunity here. If the economy is headed for further disaster, perhaps precipitated by the negative wealth effect (i.e., people becoming less inclined to spend due to their shrinking net worths), then Amazon might be able to persuade them that online shopping at its website is the way to go. Not only will it save on fuel costs, but the company offers free shipping on orders that meet a certain price threshold. That might beat a trip to the mall.

Ever read an earnings report and say to yourself, "man, there's just nothing going on here?" I did exactly that Wednesday with Bed Bath & Beyond (NASDAQ: BBBY) and its second-quarter report.

To be fair, something is going on with the retailer. Earnings per diluted share decreased 16% to 46 cents. And net cash from operating activities took a big 40% dive, coming in at $168 million. So, yes, something is going on, it just isn't anything good.

And if you think those stats are bad, consider that same-store sales for the quarter went down by 0.1%. Okay, is it really fair to point out that comps declined by 0.1%? Shouldn't I have just said "flat" instead? I mean, it's almost like rubbing the depressing results in the face of management by literally writing the exact percentage that comps declined at when said percentage is so unequivocally small. Hey, maybe management needs a reminder that, in the year-ago quarter, comps were actually up to the tune of 2.2%. What happened?

Well, I will cut some slack here since we are in the grips of an economic mess and I certainly would assume that all the problems in the housing industry are taking their noxious toll on the retailer. I'm not sure consumers are in the mood to buy a lot of bathroom accessories while Congress is trying to figure out how to keep the financial matrix from imploding.

All retailers want their workers to operate in an efficient manner. Question is, how should companies like Wal-Mart (NYSE: WMT), Target (NYSE: TGT), and Gap (NYSE: GPS) accomplish the goal of eliminating inefficiencies?

One way is to use productivity software to coerce employees into making sure they are putting forth their best effort. An excellent article at The Wall Street Journal shows how AnnTaylor (NYSE: ANN) is using computer monitoring to ensure that workers are aware of their strengths and weaknesses when it comes to selling. According to the article, employees are made aware of their average sales per hour and the yield per transaction. If you don't pull your weight, you won't get scheduled as much. In fact, the article implies that it isn't unheard of for an employee to go from 30 hours one week to 8 the next. Again, it's all based on your stats. If you sell more, you work more.

It's that simple, and as one might imagine, the adjective "Darwinian" came up in the discussion. That's because this philosophy of linking hours to performance has upped the competitive ante among a store's team. I think this is one of the problems that such a system creates. If employees are at each other's throats trying to score a sale, then the team dynamic disintegrates. That is never a good thing. Indeed, team unity rules in any organization, and it is paramount when it comes to good customer service.

Target Corporation (NYSE: TGT) reported August same-store sales at the end of last week with its head held down. The second-largest discount chain in the U.S. said sales dipped 2.1% for August compared to the same period in 2007 even with the back-to-school selling season occurring. Is fellow discounter Wal-Mart Stores, Inc. (NYSE: WMT) stealing business away from its smaller rival? With plummeting home values and foreclosures still in full swing, and even with a temporary fuel price retreat, that is probably the case.

Target did say that its August slump was in line with forecasts, and even the analyst consensus had predicted a 2.6% drop in Target's August sales. Although Target solidly upped the game on same-store sales performance throughout much of 2007 and into 2008, it's now seeing a role reversal as consumers are leaving more hip and cool retailers to the warm retreat of low prices that is Wal-Mart's moniker and always has been. Still, Target is a deep discounter too -- but it's feeling the negative effects of a consumer spending pullback.

Wal-Mart's "Save Money. Live Better" marketing slogan was well-timed and it's paying off for the mega-retailer. Target did see an increase in average transaction price in August, even though it did witness a slowdown in the actual number of transactions during August. Food and health care were top sellers for Target in August as well. Back-to-school items did hit a nice level late in the month, but even that was not enough to rescue Target from a solid same-store sales decline in August. Target's guidance for September was in the -1% to +1% range, but noted that current hurricanes may affect September sales.