Has the Grinch stolen Christmas?

Make that, has Target stolen Christmas?

The country's second-largest discounter warned that November same-store sales would fall short of expectations of last year's 4 percent to 6 percent gain, but it didn't say how short or explain why. The estimate is based on sales in the first two months of the year and expectations for the rest of the month.

The news, which came after the market closed Monday, sent Target's shares plummeting 7.1 percent yesterday, the biggest drop in three years, to $54.30 -- dragging other retail stocks down with it. The Standard & Poor's apparel retail index declined 2.27 percent.

Target would not comment on the warning, which was made on its weekly recorded sales call.

The question on investors' minds was this: Is this a sign the coming crucial holiday shopping period, which officially gets under way in one week and two days, could be soft? Or is it a blip limited to Minneapolis-based Target?

"Either way, the holiday season is off to a bumpy start," said Goldman Sachs analyst Adrianne Shapira in a note to investors. "A flagging consumer has far more reaching implications for the retail sector."

The most oft-cited reasons for the reduced expectations were unseasonably warm weather, the trend, continued from last year, for shoppers to wait until late in the season to buy holiday gifts and Wal-Mart's early and aggressive marketing efforts. The latter could bode poorly for other retailers as the world's largest retailer continues to gobble up market share -- even from Target, which up to now has managed to stand up to the retail behemoth. Monday, Wal-Mart issued an upbeat forecast saying it expects electronics and other general merchandise to make it a successful holiday season. CFO Tom Schoewe projected fourth-quarter same-store sales would climb between 3 percent and 5 percent from a year earlier.

Analysts were divided on how to interpret the warning. "While we hate to make such a reactionary call, it is hard to look through this surprising slip in momentum for several reasons, including the fact that the comparison is easier in November than in any other month" of the fiscal year ending in January, said SunTrust Robinson Humphrey analyst Patrick McKeever, who cut his rating on the company to "neutral" from "buy."

Other analysts, however, hesitated to put too much weight into the warning, trying instead to nail down the reasons for the surprise, which came less than a week after Target told investors to expect the up to 6 percent growth.

"It is reasonable to believe that this sales softness could be short-lived," said William Blair & Co. analyst Mark Miller, in a research note. Miller blamed warm weather. Still he trimmed his earnings per share estimated for the fiscal fourth quarter ending in January by 5 cents to $1.03.

The news was enough to overshadow a Commerce Department report yesterday that hinted consumers were heading back to shopping centers as gas prices fell. Excluding autos, retail sales rose 0.9 percent in October, Commerce said. The strength was attributed to gains at specialty clothing stores and department stores.

With mixed signals entering the holiday period, retailers and developers are hanging on every economic indicator, hoping more will point to a healthy season.

-- Beth Karlin