Estimated retailer earnings growth has dropped to 3% from nearly 8% in the last several months, according to Retail Metrics Getty ImagesShoppers probably weren’t very enthusiastic in the third quarterRetailer stocks took a broad beating Wednesday, after disappointing results from Macy’s Inc. fueled growing fears that the sector suffered through some tough times in the latest quarter. The SPDR S&P Retail exchange-traded fund XRT, -1.28% dropped 2.1% in afternoon trade, as 90 of its 102 components traded lower. The ETF has lost 7.7% over the past three months, while the S&P 500 index SPX, -1.40% has eased 0.2%. FactSet Macy’s stock M, +0.94% plunged 15%, putting it on track to close at the lowest level since February 2013, after the department-store chain reported fiscal third-quarter total and same-store sales that missed expectations. It blamed weak spending by domestic customers in key categories as well as a slowdown in buying from international tourists at its Macy’s and Bloomingdale’s stores. The company said it decided not to spin off its real estate properties into a real-estate investment trust. Macy’s was among the first major retailers to report results for the quarter ended in October, as sector heavyweights such as Wal-Mart Stores Inc. WMT, -1.09%Target Corp. TGT, +0.08% Home Depot Inc. HD, -0.72% and J.C. Penney Co.JCP, +3.17% are slated to reveal results in the coming week. The dismal earnings also could put more attention on the government’s report ofOctober retail sales, due Friday. “Jittery investors are anxiously awaiting third-quarter earnings and revenue numbers as well as guidance on the key fourth-quarter holiday selling period,” analysts at industry research company Retail Metrics wrote in a note to clients. Expectations for year-over-year earnings growth for the sector have fallen drastically over the last few months to 3.0% from nearly 8% as of July 1, according to Retail Metrics, citing concerns over a tepid retail environment and a prolonged period of unseasonably warm weather, which has damped demand for cold-weather apparel and merchandise. That compares with growth of 7.3% in the fiscal second quarter and 10.2% in the first quarter. National Oceanic and Atmospheric Administration “Given the recent surprise history of department stores coupled with unseasonably warm weather and sluggish mall traffic we would note that potential for surprise to earnings, same-store sales and revenues is to the down side for the group,” analysts at Retail Metrics wrote. J.C. Penney’s said early Wednesday that earnings and same-store sales growth for the latest quarter were above expectations, but the stock fell 2.1%, after the company said it offered to pay $50 million as part of a settlement of a false-advertising class-action lawsuit. Among fellow department store chains, shares of Kohl’s Corp. KSS, +6.09% slumped 6.2%, Dillard’s Inc. DDS, +3.74% dropped 6.8% and Sears Holdings Corp. SHLD, -5.12% shed 3.5%. Kroger Co. shares KR, -1.40% slipped 0.6% after the company said it reached a deal to buy fellow grocer Roundy’s Inc. RNDY, +0.00% In other more active retailer stocks, those of Wal-Mart slid 1.8%, Target shed 2.9%, Gap Inc. GPS, -0.41% dropped 2.3% and Dollar General Corp. DG, +1.12% lost 3.7%. More from MarketWatch