NEW YORK — Ho-ho-hum. It’s beginning to look a lot like Christmas, even with modest expectations, wasn’t all it was cracked up to be.

Lackluster traffic during the pre-Christmas week prompted both Goldman Sachs and Salomon Smith Barney to cut their holiday forecasts. Salomon revised downward its same-store sales forecast for broadline retailers — department stores and discounters — to a 0.9 percent increase for December, down from an initial expectation of 2.6 percent. Same-store sales at its department stores are now expected to show a decline of 0.1 percent, while comps at discounters are expected to be up 1.4 percent, according to Salomon estimates. Overall, Salomon’s combined November-December broadline same-store sales index is expected to be up 1.8 percent, below its original forecast of a 3 percent increase.

Goldman Sachs cut profit earnings estimates for 2000 for Abercrombie & Fitch, Dillard’s, Dollar General, Federated Department Stores, Gap, Intimate Brands, Kmart, Limited, Nordstrom, Sears, Target, TJX Cos. and Wal-Mart.

Wall Street’s action follows reports Tuesday from Wal-Mart, Federated, Sears, Target and Zale that all would fall short of holiday sales plans. Joining that list was Kmart, which said that sales for its week that ran from Dec. 14 to 20 were below plan, and results month-to-date remained below plan. While many chains seemed to have seen a clear surge in shopping in the last week, it was not enough to offset weaknesses during the first three.

Higher fuel prices, rising interest rates and declining stock-market prices slowed consumer spending this holiday season. Rick Church, at Salomon Smith Barney, also noted that snow and ice storms likely made it harder for customers to shop, particularly hurting retailers with exposure to the Midwest.

Retailers also faced extremely tough comparisons against strong numbers in December 1999, which were boosted by a red-hot economy and both fears and celebrations tied to the millennium. Wal-Mart admitted that it would be hard to match last year’s gains during the final week of December since last year’s sales were driven by fears over a Y2K catastrophe.

Goldman Sachs also said sales could remain sluggish through the first half of 2001.

“We continue to expect difficult first-half comparisons characterized by decelerating real spending growth and margin pressure,” said George Strachan, broadlines analyst at Goldman Sachs. “We expect consumers will remain chastened by erosion of real-wage growth, higher fuel costs and stock-market volatility.”

For 2000, Strachan is cutting Kmart to 50 cents a share from 60 cents; Federated to $3 from $3.08; Target to $1.38 from $1.41; Wal-Mart to $1.42 from $1.44; Dillard’s to 95 cents from $1.05; Nordstrom to $1.23 from $1.30 and Sears to $4.40 from $4.50. For 2001, Strachan cut his estimate on Kmart to 40 cents from 70 cents; Federated to $4.00 from $4.25; Target to $1.55 from $1.65, Wal-Mart to $1.60 from $1.65; Dillard’s to $1.30 from $1.45; Nordstrom to $1.45 from $1.50; and Sears, to $4.90 from $5.00.

Strachan maintained his expectations for Costco Wholesale Corp., J.C. Penney Co., May Department Stores Co., Neiman Marcus Group, Saks Inc. and Kohl’s Corp, although he raised his 2001 estimate on Kohl’s to $1.27 from $1.25.

Salomon’s Church cut his estimate on Target by 7 cents to 54 cents for the current fourth quarter, and by 10 cents to $1.50 for 2001 after the discounter said late Tuesday that sales continued to run “well below plan” month-to-date at all three divisions: Target, Mervyn’s and its department store group.

Target had expected a 5 percent same-store increase, but Church expects same-store sales will be between 1 percent down and 1 percent up. Weakest categories for the Target discount division were men’s apparel, electronics, domestics, and home improvement, while strength was seen in pharmacy, sporting goods, health and beauty aids, and garden shop. The Midwest was the softest region while the East Coast and selected West Coast markets performed better.

Barbara Miller, specialty stores analyst at Goldman Sachs, shaved 2000 estimates for several chains given general weak sales trends and likely margin compression. She cut Intimate Brands to 98 cents a share from $1; Dollar General to 68 cents from 69; Gap to $1.01 from $1.04; Limited to $1.15 from $1.17; Abercrombie & Fitch to $1.59 from $1.61, and TJX to $1.86 from $1.88.

Meanwhile, Zale Corp. was downgraded by McDonald Investments, to “hold” from “aggressive buy,” and Wedbush Morgan to “buy” from “strong buy” after the jeweler said its same-store sales for the November-December period will drop between 3 and 4 percent from 1999.

Zale forecast earnings between $2.42 and $2.50 a share for the second quarter, which ends Jan 31. The company reported a profit of $2.33 a year ago, and analysts had estimated a profit of $2.77 a share.

“While we are disappointed with the holiday sales, which reflect weaker consumer spending than initially anticipated, we maintained our disciplined approach toward executing the business,” said chairman and chief executive Beryl Raff.

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