text: For major retailers, the week of darkness has arrived. With $4 gasoline and tight credit keeping consumers' wallets shut, it's time to announce dismal profits. Unless you're a discounter or a seller of hip clothing really ahead of the fashion curve, forget about it. Wall Street is braced for the worst.
  
  Here's one sign of how bad things are: "Coupon redemption is at an all-time high," says Britt Beemer, president of America's Research Group, which studies shopper behavior. Beemer's research shows that 59% of shoppers last month showed up at stores with specific lists of items they were limiting themselves to buying. The historical average over the 29 years he's been surveying: 33%. Also, more people are reporting plans to shift their shopping from chains to independent stores, where they think price haggling is more accepted.
  
  And he finds that half of women shoppers have no opinion of this season's spring apparel lines, simply because they haven't bothered to look closely at them. Better to postpone buying decisions for now. "That's unusual because winter to spring is always the most dramatic seasonal fashion change," Beemer says.
  
  Despite April sales figures that came in a little bit better than expected, department stores and specialty chains are getting hit hard as more money shifts to discounters like Wal-Mart (nyse: WMT - news - people ), Costco (nasdaq: COST - news - people ) and BJ's Wholesale Club (nyse: BJ - news - people ). Wal-Mart, which kicks off industry earnings announcements Tuesday, is expected to announce it made 75 cents per share for the April quarter, up from 68 cents a year ago, on a 7% jump in sales to $92.4 billion.
  
  Analysts also think that off-price chain TJX Companies (nyse: TJX - news - people ), which operates TJ Maxx, Marshall's and Bob's Stores, is poised to nudge profits up to 40 cents a share from 37 cent last year, on a 6.6% increase in sales.
  
  The rest of the landscape looks bleak. Big department stores Macy's (nyse: M - news - people ), which reports on Wednesday, and J.C. Penney (nyse: JCP - news - people ), which goes on Thursday, are both expected to show a 4.5% decline in sales, according to consensus estimates. Analysts expect Macy's to lose two cents a share and J.C. Penney to drop more than 50% to 49 cents a share. Penney's full-year outlook calls for a 31% drop in profits, to $3.29 a share.
  
  The outlook isn't much better for upscale retailer Nordstrom (nyse: JWN - news - people ), where profit is expected to drop to 50 cents a share from 60 cents, on a slight dip in sales. Nordstrom reports Thursday.
  
  Lehman Brothers economist Drew Matus sees a fundamental slump in consumer spending lasting through the first quarter of 2009, save for a modest early summer push spearheaded by government rebate checks (don't believe everyone who denies an intent to spend those checks, he argues, since people tend to answer such surveys with socially acceptable answers). That doesn't bode well for the next back to school and holiday pushes.
  
  Other than discounters, the only retailers it pays to own right now, it seems, are those fashion houses staying a step ahead of their competitors. With more consumers focused on deals than on the latest trends, there's only room for sales growth for those stores that are truly getting the trends right.
  
  Among those are Urban Outfitters (nasdaq: URBN - news - people ), the Philadelphia-based chain expected to push quarterly profit to 22 cents a share from 17 cents a year ago when it reports on Thursday, on a 23% jump in sales.
  
  "There just aren't many specialty retailers catering to the 20-to-35-year-old consumer that they go after. And their track record of being on the fashion curve is [among] the best in retail," says J.P. Morgan Chase retail analyst Brian Tunick.
  
  Tunick also encouraged by the full-year prospects of J. Crew (projecting earnings of $1.86 a share in 2008 from $1.54 last year) and Abercrombie & Fitch (nyse: ANF - news - people ) (to $5.70 a share from $5.20), both of which are known for increasingly fresh apparel concepts.
summary: This week's quarterly earnings reports are only the beginning for most stores.