After the early market close Monday, Target cut its sales projections. The retailer said it expects December sales at stores open at least a year to show between a 1 percent increase and a 1 percent decrease, a shift from the 3-to-5-percent increase the chain had forecast for the five week period ending Jan. 5.

Actual sales results won't be released until Jan. 10, but Target said an increase in the number of shoppers in the third week of the holiday season "was not sufficient to compensate for the unfavorable traffic trends that carried over into December from the week following Thanksgiving."

Goldman Sachs analyst Adrianne Shapira said the news "stokes the fears of disappointing December sales," and said she expects Target and other retail stocks to "come under pressure" Wednesday. Shapira, who does not rate Target shares, cut her profit forecast for the fiscal fourth quarter to $1.25 per share from $1.29.

The average estimate for Target's fourth-quarter profit, according to poll by Thomson Financial, is $1.31 per share.

Shapira said shopping trends showed consumers spent less during the holidays on items for the home and on clothing, which she referred to as Target's "sweet spot," and more on consumer electronics categories, which she said is "not a Target destination."

Daniel Binder of Jefferies & Co. cut his profit forecast by 10 cents to $1.29 per share, and likewise cut his expectations for profit margins in January, saying he expects the weak results will lead to more promotional efforts with smaller margins.

But although Deutsche Bank analyst William A. Dreher Jr. cut his forecast for fourth-quarter profit to $1.25 per share from $1.37, he kept a "Buy" rating on the shares and said the store should weather the difficult season.

"While this announcement is disappointing, we believe that (management) has been able to manage inventory in this slower sales environment, as it was in 'good condition' at the end of November," Dreher wrote in a note to clients. "We continue to believe that (Target's) innovative merchandising, coupled with their ability to manage expenses in a weaker sales environment and aggressive share buybacks will benefit shareholders."