*By Chloe Aiello* Commerce giants are gearing up for the busiest shopping weekend in the U.S., even as one of the biggest earnings weeks of the season is punishing big box retail stocks and pulling down the sector. Even after some optimistic numbers from companies like Macy's and Walmart, the retail sector is reeling from big box retailers' disappointing results, demonstrating the retail industry is still neither safe nor settled. "Investor sentiment right now is just on shaky ground. After everything that we saw in October, confidence for them is on shaky ground," James Cakmak, contributing editor at Techonomy told Cheddar Tuesday. Shares of major players in big-box and off-price retail tumbled on Tuesday in advance of shopping extravaganza Black Friday. Investors are watching this week's earnings closely to gauge the health of an industry struggling to stay relevant in the face of online and direct-to-consumer shopping. Target ($TGT) closed down more than 10.5 percent on Tuesday, [after reporting a mixed bag before the bell](http://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=2377758). Revenue just beat analyst expectations, but earnings fell short. Gross margin and operating income rates fell, dragged down by labor costs and supply chain expenses as the big-box retailer fulfills more orders online. Despite its lukewarm results, Target reiterated that it's "better positioned for this holiday season than ever before." Target's results overshadowed both Kohl's ($KSS) and Best Buy ($BBY), which both reported better than expected earnings and revenue Tuesday morning. Best Buy dropped as much as 2 percent before paring its losses to close up 2 percent. [The electronics retailer also reported](http://investors.bestbuy.com/investor-relations/news-and-events/financial-releases/news-details/2018/Best-Buy-Reports-Better-Than-Expected-Third-Quarter-Results/default.aspx) comparable sales growth in its domestic and enterprise segments. The company even strengthened full-year earnings and revenue guidance "to reflect the outperformance in the third quarter," Best Buy CFO Corie Barry said in a statement. Best Buy has been focusing on diversifying its service offerings to compete against rivals Amazon ($AMZN) and Walmart ($WMT). "We are energized by our continued momentum and overall performance and see significant value-generation opportunity ahead of us by successfully enriching lives with technology and providing services and solutions that solve real customer needs," CEO Hubert Joly said in a statement. Big-box retailers like Target and Best Buy have invested considerably in their digital retail channels to compete with Amazon, Walmart, and other major players in e-commerce. The investment may have pinched margins, but has largely paid off in growing online sales. And they should be looking forward to healthy holiday seasons, except that Amazon ($AMZN) has also sweetened its shipping offerings in advance of Black Friday and the holiday season. "A really strategic thing Amazon has done is deal this really generous hand to non-Prime members. If you're not a Prime member, you're going to get free shipping all the way through Christmas it seems like. That's a huge win," Nick Martell, co-founder of MarketSnacks told Cheddar Tuesday. "And when you are Target and you've done two-day free shipping thing, that completely ruins that strategy. Amazon's kind of aggression here totally takes the wind out of some big box sales." Kohl's beat expectations for earnings and revenue [in its fall quarter](http://phx.corporate-ir.net/phoenix.zhtml?c=60706&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTEyNTYxNDQ1JkRTRVE9MCZTRVE9MCZTUURFU0M9U0VDVElPTl9FTlRJUkUmc3Vic2lkPTU3) and reported 2.5 percent same store sales growth, which CEO Michelle Gass said in a statement reflected strength across the apparel business, focus on speed to market and inventory levels, and strong execution in stores and online. Kohl's raised guidance for fiscal 2018, but it fell at the low end of Street expectations. Kohl's closed down 9 percent on Tuesday. Discount retailers, like Kohl's and T.J. Maxx have come out as surprise winners in the wake of the financial crisis, [according to Deloitte,](https://www2.deloitte.com/insights/us/en/multimedia/infographics/future-of-retail-renaissance-apocalypse.html), and have also benefited from the fall of certain giants like Sears ($SHLD). But T.J. Maxx also fell on Tuesday, closing down about 4.4 percent, after a weaker-than-expected earnings report. [The discount retailer reported mixed earnings and revenue,](http://investor.tjx.com/phoenix.zhtml?c=118215&p=irol-newsArticle&ID=2377805) missing the Street's expectations for earnings but just beating on revenue. T.J. Maxx's parent company, which also owns Marshall's and HomeGoods, also reported strong comparable sales growth, but weaker than expected guidance for the all-important holiday quarter. Lowe's ($LOW) beat on earnings and revenue, but the home improvement retailer lowered its full-year forecast amid an aggressive turnaround effort led by the former JC. Penney CEO Marvin Ellison. L Brands ($LB) and Urban Outfitters ($URBN) were two of the first to report this week. Shares of Urban Outfitters surged more than 3.5 percent after the bell on Monday. The parent company to brands like Free People and Anthropologie reported retail sales in the high single-digits. In past quarters, it has struggled to keep direct-to-consumer efforts from eating up in-store sales. Shares of L Brands tumbled after its earnings report on Monday, and deepened its losses on Tuesday, closing down 17.7 percent. Shares of L Brands are down more than 52 percent year-to-date. L Brands CEO Les Wexner's failed attempts to re-invigorate lingerie brand Victoria's Secret have led analysts to question whether its particular brand of sex-appeal is broken, [The Wall Street Journal reported](https://www.wsj.com/articles/victorias-secret-chief-is-out-amid-declining-sales-1542212186?mod=article_inline). Retail has had a rough couple of years, but it's very much alive. While some retailers, like J.C. Penney ($JCP) and Sears have faltered, others like Home Depot and Walmart ($WMT) have found ways to thrive.

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