Closeout retailer Tuesday Morning (NYSE:TUES) had a pre-Christmas surprise for investors. Without waiting to see whether last-minute shoppers would boost its financial fate, the company lowered guidance for the fourth quarter ending Dec. 31.

This wasn't a just-by-a-hair miss. Analysts were looking for revenue to top $360 million. The company's upper-range forecast was $335 million. Even more telling was fourth-quarter earnings per share: Analysts expected $0.96, and the company says the best it expects is $0.84 a share. Yikes!

Long-term Tuesday Morning investors can still savor the fact that the company will end the year in traditional fashion -- with a "solid cash position" and no debt.

While the company used the press release to tout its excellent return on investment, investors would be wise to note that same-stores sales will be down 4% to 4.5% this year (compared with 2004). Sales for stores open more than a year have been weak every quarter this year and fell 1.7% for all of 2004 as well.

As you would expect, two years of negative same-store sales have worn on the stock. Look at this two-year chart, and you'll see that shares have lost almost a third of their value. While the stock has not matched the company's motto, "Everything 50% to 80% off," the trend isn't pretty.

Tuesday Morning has received press this year at The Motley Fool because of its excellent return on invested capital. It also made the Motley Fool Hidden Gems watch list for similar reasons. While the company has proved adept at making money, the accelerating downturn in same-store sales is not good news for long-term investors or its returns on invested capital.

The downturn is also puzzling, given a "SpendingPulse" study in today's Wall Street Journal. The leading retail sales category this holiday season is home furnishings -- one of Tuesday's Morning's areas of focus. The company does not appear to be capitalizing on areas where its full-price brethren are flourishing.

For now, investors would be wise to look at discount retailers that are turning in positive same-store sales results -- places like Ross Stores (NASDAQ:ROST), Burlington Coat Factory (NYSE:BCF), Target (NYSE:TGT), and Wal-Mart (NYSE:WMT).

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Fool contributor W.D. Crotty does not own any shares in the companies mentioned. Click here to see The Motley Fool's disclosure policy.