A slew of major retailers including American Eagle Outfitters, and Pier 1 Imports have slashed their profit forecasts.
January is off to a slow start for retailers. On Monday, Express Inc. cut its fourth-quarter profit prediction, citing a slower-than-expected holiday shopping season and also weak store traffic in January.
Retailers' fiscal year typically ends in late January or early February to include the pre-Christmas and post-Christmas season.
The announcement from the National Retail Federation follows the Commerce Department's release on Tuesday of broader sales figures for December.
Total retail sales rose just 0.2 percent last month, according to the Commerce Department. That follows strong gains in October and November, helped by healthy auto sales.
The figures showed that Americans bought more clothing in December, clicked frequently at online retailers and paid higher gas prices. They cut back on cars and almost everywhere else.
The holiday sales results from the National Retail Federation include online sales, but exclude sales at automotive dealers, gas stations and restaurants.
This week, thousands of retail executives are in New York for the federation's annual convention. They're hoping to come up with strategies to respond to shoppers' shift to researching and buying on computers and mobile devices.
They're also trying to create better solutions to thwart security credit card breaches in the wake of the massive theft at Target Corp., which is the second-largest credit card theft behind one at TJX Cos.
AP Economics Writer Josh Boak contributed to this report from Washington.