ANALYSIS - Retailers send distress signal for holiday quarter

By Nicole Maestri

SAN FRANCISCO (Reuters) - Investors may be in a merry mood, but U.S. retailers ranging from Target Corp to Saks Inc to Kohl's Corp are warning Wall Street to keep its expectations in check for this holiday season.

The broader U.S. stock market fell on Tuesday after discount retailer Target said it might be a stretch to meet Wall Street's fourth-quarter earnings forecast. It said early November sales were trending below its expectations, and shoppers had pulled back on discretionary purchases.

The comments were the most pointed effort to date by a retailer to lower holiday expectations, and reflected the sentiment of other industry titans such as Wal-Mart Stores Inc, the world's largest retailer, and department store operator Macy's Inc.

"In our view, sell-side analysts are somewhat more optimistic across most of our industry than we believe is warranted in light of the harsh realities of the current environment," Target's Chief Financial Officer Doug Scovanner said on the company's earnings conference call.

Investors have been piling into retail stocks since March, betting the worst has passed for the consumer and retailers' sales and earnings can only improve as shoppers once again begin spending.

The S&P Retail Index has jumped 77 percent since March 9, while the Dow Jones industrial average has risen 59 percent in that time.

But in the past week, retailers have made it clear that consumers are in no mood to splurge.

The all-important holiday shopping season kicks off in earnest on the day after U.S. Thanksgiving, also known as Black Friday, which falls on Nov. 27 this year.