As the first half slips into the past, retailers’ high hopes for a strong second six months of the year are beginning to fade as well.

A slow spring for shopping has led to elevated levels of inventory as retailers come out of the Fourth of July holiday and the season’s usual markdowns. Thomson Reuters said that in April, all of the retailers missed their same-store sales estimates and in May, 57 percent missed expectations. May also delivered more than the average number of downside surprises. June same-store sales will be released Thursday.

But looking at the first two weeks in June, the Johnson Redbook Sales Index reported that national retail sales fell 1 percent from May and only rose 0.6 percent over the previous year. Redbook pointed out that sales of seasonal merchandise were being driven by promotions.

Retailers’ sales floors may soon transition from spring-summer to back-to-school, but the third quarter isn’t expected to show much improvement over the second for the beleaguered stores. That’s causing analysts and investors to lose further confidence in consumers’ desire to spend on apparel and to cut their forecasts.

“What is still lacking is a sustainable demand driver, such as a fashion trend or tangible evidence of an improved macro backdrop driving apparel sales,” said analysts at Wolfe Research. “We are cautious heading into the second half of 2016 given sector headwinds including continued reliance on promotions to drive sales and potential for macroeconomic deterioration.”

RBC Capital Markets analyst Brian Tunick pointed out that even though department stores are heading into the second half with favorable comparisons, it still won’t help. His department store comps to beat for third-quarter 2015 were negative 0.3 percent and for the fourth quarter of 2015, negative 0.7 percent. His forecast for the third quarter for this year is for a decline of 2 percent and for the fourth quarter of 2016, he estimates comps will be down 1.3 percent.

“The secular bear case around the department store channel continues to make stocks un-investible,” said Tunick. He added that important department store brands like Michael Kors Holdings Ltd. and Ralph Lauren Corp. are reducing their inventories to wholesale channels as they increase their online business. In addition to that, some brands are partnering even more with Inc., presenting customers with a choice to buy from the convenience of their living rooms rather than driving to the mall, parking and taking the chance that the product is in stock.

The pessimism over the second half, coupled with retail’s generally lousy performance in the first six months, has been reflected in companies’ share prices. The WWD Global Stock Tracker for the first six months of this year only increased 2.5 percent, with two-thirds of the stocks declining over the past six months.

Moody’s Investors Service last week lowered its 2016 forecast for U.S. retail sales, with the publicly traded apparel and department store subsectors taking the biggest hit. Moody’s cut its overall retail sales growth forecast from a range of 2 to 3 percent to a range of 4 to 5 percent. The analysts also lowered the outlook to stable from positive.

Moody’s expects apparel and footwear to decline 5 to 6 percent this year, which is a huge switch from its original call for growth to rebound by 2 to 3 percent. Most of the decline is attributed to problems at The Gap Inc., which has experienced revenue and operating profit declines for the year. Moody’s noted that The Gap has been heavily promotional and a poor spring selling season has kept inventory levels elevated.

Of course, The Gap isn’t alone when it comes to promotions. BB&T Capital Markets analyst Corinna Freedman noted that in June, retailers on average had inventory marked down 50 percent. She saw this across apparel and footwear. She said The North Face had 70 percent of its store marked down as it tries to clear out merchandise ahead of fall inventory. But she remains optimistic for the b-t-s shopping season.

One potential bonus facing retailers in the early months of the second half is what are expected to be above-average temperatures. “Above-average temperatures are expected to continue in July for much of the U.S.,” wrote Freedman.

Deborah Weinswig of Fung Global Retail and Technology also thinks the warm temperatures will be good news for retailers. “The weather conditions and long weekend [for Fourth of July] will bring opportunities for increased purchasing of summer apparel, consumables and outdoor categories,” Weinswig said.

However, many in retail weren’t prepared for the U.K.’s vote to leave the European Union. This has sent currencies spinning and could affect tourism. Goldman Sachs analyst Matthew Fassler said, “We see increased foreign exchange volatility as the biggest risk in the near term, with potential for slowing end-market demand in the U.K./Europe as a central risk over time.” He thinks tourism could be dampened, weighing on department stores and luxury brands with exposure to European tourists. American retailers with little exposure to European markets will avoid this risk.

Since the Brexit is evolving daily, it isn’t clear how it will play out and for how long.

“The financial volatility due to the aftermath of the Brexit vote may push some spending from the end of June into July, especially for big-ticket items and high-end discretionary spending,” said Chris Christopher, director of consumer economics at IHS Global Insight. “If the financial volatility continues much longer, the back-to-school spending season may not be as promising as we had originally thought.”