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The all-important holiday season has come and gone, leaving some U.S. retailers counting their blessings and others counting the days until the next big selling season.

Macy's Inc. (M) not only beat expectations for its sales numbers, it posted a nice bump in online sales, raised its dividend and increased its earnings forecast for the year. Target Corp. (TGT), however, while turning in a 1.6% rise in sales, missed its own and analysts' expectations and cut its year forecast.

"It was a holiday period characterized by sharp promotions and retailers pulling out all stops by expanding hours," said John Long, retail strategist at Kurt Salomon. "What's remarkable in the numbers is that while there were some standouts, this didn't produce the extraordinary results we might have expected. This does not bode well for the fourth-quarter and year-end results that retailers will soon be reporting."

The holiday season is a crucial one for retailers, accounting for a good chunk of annual sales.

December sales "continued very strong at Macy's and Bloomingdale's, and we are solidly on track to exceed our expectations for same-store sales in the fourth quarter," said Macy's Chief Executive Terry Lundgren.

"We have great confidence in the future," Lundgren added. The retailer's December results were boosted by a 35.8% rise in online sales.

Target cited weakness in electronics, music, movies and books. Sales and traffic were strongest in the week leading up to Christmas as customers waited to shop for last-minute gifts, Chief Executive Gregg Steinhafel said.

J.C. Penney (JCP) posted a 0.3% rise in comparable-store sales when a 0.1% decline was expected but said comparable-store sales for the fourth quarter will be down slightly compared with last year because of a softer sales performance during the holiday season.

Kohl's Corp. (KSS) posted a 0.1% drop in same-store sales when a 2.2% rise was expected and reduced its fourth-quarter earnings view. The department store cited sluggish sales in cold weather wear given unseasonably warm temperatures during the holiday season.

Gap Inc. (GPS) posted a 4% drop in same-store sales, when 1.3% decline was expected. "We expected December to be highly promotional, and while we competed aggressively across our brands our performance was below our expectations," said Chief Executive Glenn Murphy. "That said, we are encouraged by bright spots across our business, and we're clear and focused on what needs to be fixed in order to improve our sales trend" this year.

Shoppers have become conditioned to only pay certain prices and that hurt retailers during the holidays, analysts said. "Even though consumers are willing to spend they will only spent when there is huge discounting," David Bassuk, head of the retail practice at AlixPartners. "A number of retailers couldn't bring in enough dollars in that environment."

Upscale department stores still remain somewhat immune. Nordstrom Inc. (JWN) posted an 8.7% increase when 5.1% was projected and Saks Inc. (SKS) met expectations with a 5.8% rise.

Costco Wholesale Corp. (COST) said U.S. same-store sales excluding fuel rose 6% in December from a year earlier, meeting the expectations of analysts surveyed by Thomson Reuters.

Limited Brands Inc. (LTD) reported sales at stores open more than a year in December grew 7% when 5.7% was expected and the operator of Victoria's Secret and Bath & Body Works raised its fourth-quarter earnings expectations.

The 22 retailers tracked by Thomson Reuters showed a gain of 3.4% when 3.3% was expected. That compares with 3.1% a year earlier. For the November and December Christmas season, same-store sales rose 3.1% growth. That compares with 4.3% in 2010 after softness the year before because of the recession. The reporting group doesn't include major holiday merchants Wal-Mart Stores Inc. (WMT), Amazon.com Inc. (AMZN) and Toys R Us.

American Eagle Outfitters Inc. (AEO) slashed its fiscal fourth-quarter earnings guidance as the teen-apparel retailer offered more aggressive promotions to drive late holiday sales.

Stein Mart Inc. (SMRT) reported flat same-store sales when a 1% decline was expected. Children's Place Retail Stores Inc. (PLCE) and Bon-Ton Stores Inc. (BONT) floundered, with both saying warm weather made winter wear unappealing and both lowered their earnings guidance. Similar comments about the weather may be expected from other retailers as they report.

-By Karen Talley, Dow Jones Newswires; 212-416-2196; karen.talley@dowjones.com

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