NEW YORK (CNN/Money) - If you're waiting until after the holidays to snag real bargains, you may want to rethink that strategy this year.

Faced with a shorter holiday shopping season and debt-laden consumers, retailers are tightly managing inventories and offering big discounts early on, which means there will be fewer clearance items on store shelves after Christmas.

But if you own retail stocks, this could be good news for fourth-quarter profits. Retailers' earnings for the period are expected to increase 11.6 percent from a year ago, according to analysts surveyed by earnings tracker First Call. For all of 2002, retail profits are expected to increase 24.6 percent from the previous year.

"Retailers are doing a much better job in terms of inventory control," said Joe Cooper, a First Call research analyst.

Amid uncertain economic times, merchants are trying to steer consumers away from those post-holiday sales, which because of the big margin-eroding discounts often can make or break a retailer's holiday season, said Diane Swonk, chief economist at Bank One.

In addition to offering planned discounts early on in the season, retailers also are finding other ways to trim expenses to shore up the bottom line, such as hiring the same or less holiday help.

So when the bags of crumpled wrapping paper are finally gone and the cold dullness of January sets in, investors might find a warm spot in retailers' fourth-quarter earnings even if sales are slow.

In fact, enthusiasm over retail is on the rise, making it difficult to find real bargains among retail stocks. Shares of some major chains are up 30 to 50 percent since October.

Anticipating a slowdown in consumer spending, merchants have paid careful attention to cutting expenses this year. Americans have been snapping up new cars and homes at a heady clip this year, lured by low interest rates and zero percent financing deals despite a shaky economy. But now those deals are over and interest rates are about as low as they will get.

Analysts generally expect consumers to spend less during the holidays than in previous years because they are saddled with a mountain of debt, job worries, and fears of a potential war with Iraq. The National Retail Federation, the industry's largest trade group, predicts a 4 percent rise in holiday sales. That's a more robust forecast than some, but is at the lower end of its historical forecasts over the past decade.

To coax skittish consumers into the stores, retailers are offering big discounts early on in the season, holding pre-dawn "doorbuster" specials and other gimmicks. Sales for the Black Friday weekend, the weekend after Thanksgiving, considered the holiday season kickoff, jumped 12.4 percent from a year ago, according to ShopperTrak RCT, which tracks retail data.

Normally such deals can hurt margins. But retailers were ready for a tough year and planned many of those discounts far ahead of the holiday season. They also clipped inventory and cut back on holiday hiring to help manage expenses, which means fourth quarter profits should come out on top for the group.

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"Not only are retailers doing more with less, like every other large corporation, and taking advantage of six fewer days in the shopping season, but they are actually hiring less this holiday shopping season, so there's fewer people on the floors actually helping consumers out," Swonk said.

Wall Street expects Sears Roebuck & Co. (S: down $0.21 to $26.93, Research, Estimates) to post a lower fourth-quarter profit of $1.95 a share compared with $2.02 a year earlier, according to First Call. But full-year earnings are expected to exceed the previous year. CEO Alan Lacy has blamed lower sales on a company-wide restructuring in which stores are being revamped and inventory is being overhauled.

Sears, based in the Chicago suburb of Hoffman Estates, Ill., said the number of seasonal workers it hired is about flat with last year and that inventories are lower than a year ago. It also is spending about the same amount on promotions as last year, spokeswoman Peggy Palter said.

"When we made those decisions, we didn't know exactly what the economy was going to do, but it was our expectation that the economy would weaken," Palter said. "Our marketing and promotion budget is pretty comparable to recent years, so again we're not doing any significant additional spending behind the promotions."

Because of the tighter inventory controls, Sears expects to have fewer clearance items after the holidays, which should help the bottom line.

Meanwhile Wal-Mart Stores Inc. (WMT: up $0.42 to $54.35, Research, Estimates), the world's biggest retailer, also has cut costs. But as a discount chain, aggressive cost-cutting is part of the everyday strategy, spokesman Tom Williams said. However, cost-cutting has taken on added importance at Wal-Mart this year as the chain's usual monthly sales gains have slipped amid the tough economy.

Williams said holiday staffing levels are roughly the same as a year ago, and that it has straightened out a backlog of inventory caused by the recent 10-day lockout at West Coast ports.

Analysts surveyed by First Call expect the Bentonville, Ark.-based chain to post a fourth-quarter profit of 55 cents a share, up from 49 cents a year earlier. For the year, Wal-Mart is expected to earn $1.79 a share, up from $1.49 in 2001.

Bank One's Swonk said the tight inventory controls and cost-cutting employed by Wal-Mart, Sears and other large retailers have extended to all retailers, which should result in fewer clearance sales even at the smaller stores.

"Retailers ordered extremely conservatively for the holiday season. The shelves aren't overly abundant with goods, and controlling inventories has finally made it into broad retailers, not just Wal-Mart," Swonk said. "That's important because it means a lot of the early promotions we've seen have brought the consumers in, but has left less on the shelves with less selection."