The Limited. Kmart. The Gap. One by one, their stocks have fizzled and floundered. On Apr. 14, finally, it was time for Wal-Mart Stores Inc. to confront Wall Street's lofty expectations. Clunk! Shares of the retail titan dropped 6%, to $27.25, as it reported weaker-than-expected sales in March and acknowledged that, for the first time in 80 years, it would not post double-digit same-store sales growth.

As the full scope of President Clinton's economic program is unveiled, retailing analysts fret that consumers will stop spending. The data is not very comforting: Retail trade in March was down 1% from the year before, a drop the industry blamed on lousy weather. And while giant chains, such as Wal-Mart and Home Depot Inc., are still growing fast, they may be running out of room to add stores without cannibalizing existing units.

Even as the industry leaders run into trouble, though, new retail stars are scoring big earnings gains--and catching on with investors (chart). Amid the first-quarter gloom, smaller specialty retailers and "off-price" outlets turned consumers' drive for value into healthy profits. "The companies that will be attractive in the retailing sector are those that are very focused and conjure up the image of one product line--not 15 different things," says retail consultant Walter F. Loeb, president of Loeb Associates Inc.

Take Bed Bath & Beyond Inc., a chain of 38 stores featuring moderately priced home furnishings. For its year ended Feb. 28, the chain should post net earnings of $20.1 million, up 26% from a year earlier, on sales that jump to $278 million from $217 million, says Heidi Steinberg, an analyst at Shearson Lehman Brothers Inc. Since it began trading at $17 last June, the company's stock has risen to 32 3/8.

TOP OF THE HEAP. Discount department stores, such as Caldor Corp. and Bradlees Inc., have scored by offering a wide array of goods at low prices. Extensive store-remodeling plans and a shift toward such fast-growing soft goods as apparel augur well for the chains, analysts say. "These are companies that have good, upscale offerings at low prices," says Edward Johnson, director of Johnson Redbook Service, a retail and apparel research firm. Johnson estimates Caldor will show an annual growth rate of 20% in earnings. In fact, the company reported profits of $34.5 million, up from $2.3 million, on sales of $2.13 billion for its fiscal year ended Jan. 30. That's one reason its shares have doubled in the last year, to 30 3/4.

Then there are Ross Stores Inc., T. J. Maxx, and other off-price outlets that offer up to 50% savings on specialized merchandise. Analyst Jeffrey B. Edelman of C. J. Lawrence Inc. expects Ross to post profit growth of 20% annually. With 223 off-price retail outlets in 18 states, Ross reported net earnings of $34 million, up 23%, for the year ended Jan. 30, on sales of $1.04 billion.

Don't write off the biggest retailers. Once consumer spending picks up, analysts believe, the giants could show new vigor. Sears, Roebuck & Co. has already done so: On Apr. 20, its merchandise group reported profits of $64 million vs. a $24 million loss a year ago. And Wal-Mart remains squarely at the top of its heap--even if its sheer size may hinder growth. "Wal-Mart has established a difficult standard for itself," says Kurt Barnard, president of Retail Marketing Report, a newsletter. That leaves room for the smaller guys--though maybe not a lot. Wal-Mart's stock may have faded, but its stores don't show any sign of following suit.

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