NEW YORK (CNN/Money) - Discount stores continued to show sales gains in July, the nation's retailers reported Thursday, though not at the same robust pace as in previous months, indicating consumers finally may be reacting to economic worries.

Still, discount chains continued to outperform department stores and other retail chains as Americans continued to bargain shop.

"What we are seeing is that consumers' cautious spending is now stretching to the low-priced discount stores as well as to the other stores," said Kurt Barnard, president of Barnard's Retail Consulting Group. "...Today, saving money is chic. Bargain hunting is fashionable."

Discount chains such as Wal-Mart and Costco have continued to perform well during troubling economic times as consumers, though still willing to spend, have become accustomed to bargain-hunting in recent years.

That has pinched traditional department stores and other types of retailers that typically charge higher prices and are more reliant on clothing sales, which have performed poorly in the past few years.

Additionally, many retailers, who had been cutting back sharply on vendor orders for new merchandise, suddenly found themselves caught short in July after stronger-than-expected June sales depleted inventory levels, Barnard said. That contributed to lower July sales for some, and looms as a potential threat to the all-important holiday season, which is gaining in the retail rear-view mirror, he added..

Wal-Mart Stores Inc.'s July sales grew at a slower pace than a year ago, yet it raised earnings guidance for the second quarter.

The discounter said July sales at stores open at least a year, a key gauge known as same-store sales, increased 4.5 percent, below the 6 percent gain a year earlier. The company has said it expects a 5-7 percent sales increase for the second quarter.

The company said it expects to meet or exceed its previous earnings guidance of 44 to 45 cents a share for the quarter.

Sales for the core Wal-Mart stores division rose 5 percent while its Sam's Club wholesale operation increased 1.9 percent.

Shares of Bentonville, Ark.-based Wal-Mart (WMT: Research, Estimates) were up 12 cents to $48.50 in before-hours trading Thursday.

Target Stores (TGT: Research, Estimates), another discount chain, reported a 1 percent same-store sales increase last month, below company expectations. But CEO Bob Ulrich tried to reassure investors, saying "We continue to expect very strong earnings growth in the second quarter despite our recent sales softness."

And Family Dollar Stores Inc. (FDO: down $1.73 to $26.21, Research, Estimates) said same-store sales increased 1.9 percent last month. The discount retailer said softer sales of seasonal summer merchandise hurt in July. The Matthews, N.C.-based chain also reiterated guidance for the fourth quarter ending Aug. 31 of 24 cents a share.

Dollar General reported a 6.6 percent increase in July sales and said it expects August sales to increase in the 5-7 percent range.

Kohl's Corp. (KS: Research, Estimates) reported a 7.5 percent July same-store sales increase and a 10.6 percent increase for the second quarter.

Meanwhile, warehouse club operator Costco Wholesale (COST: Research, Estimates) reported a 5 percent increase in its July same-store sales.

Costco shares rose $1.31 to $34.53 Wednesday.

But traditional retailers didn't fare as well.

J.C. Penney Co., for instance, reported a 2.2 percent decline in its department store sales, citing decreased inventory levels after unexpectedly robust first-quarter sales. The company said sales at its Eckerd drugstore division increased 5.5 percent from a year earlier.

Shares of Plano, Texas-based Penney (JCP: Research, Estimates) fell 32 cents to $16.43 Wednesday.

And Federated Department Stores Inc, parent of Macy's and Bloomingdale's, said same-store sales fell 5.2 percent in July. However, the Cincinnati-based company said it expects to meet or exceed Wall Street's second-quarter consensus forecast for earnings of 50-60 cents a share, thanks to cost-cutting efforts.

Federated (FD: Research, Estimates) shares slipped 17 cents to $34.02 Wednesday.

Sears Roebuck Inc. (S: Research, Estimates) posted a 4.9 percent decline in its July same-store sales, in line with company expectations.

Shares of the Hoffman Estates, Ill.-based chain added 11 cents to $43.31 Wednesday.

Dillard's Inc. (DDS: down $0.91 to $21.49, Research, Estimates) posted a 3 percent decline in its July same-store sales. The Little Rock, Ark.-based chain is attempting a turnaround after rejecting merger overtures from Federated and May Department Stores earlier in the year, according to previous press reports.

Framingham, Mass.-based TJX Companies Inc. (TJX: down $0.13 to $17.01, Research, Estimates), operator of T.J. Maxx, Marshall's and other off-price stores, reported a 1 percent decline in same-store sales.

Meanwhile, San Francisco-based Gap Inc. (GPS: down $0.38 to $10.77, Research, Estimates), which operates Banana Republic and Old Navy in addition to Gap stores, reported an 8 percent decline in July same-store sales. Gap has been struggling with a number of internal missteps on fashion as well as tough industry-wide apparel sales and a precarious economy.

Despite the July sales decline it raised second-quarter earning expectations to 4 or 5 cents a share, slightly ahead of Wall Street expectations, according to earnings tracker First Call.

"Overall, July sales did not meet our beginning-of-month expectations, particularly at Gap domestic," Chief Financial Officer Heidi Kunz said.

And Best Buy Inc. (BBY: Research, Estimates), the nation's biggest consumer electronics chain, which has been benefiting from a surge in home furnishings and innovative new products, surprised investors by lowering its second-quarter earnings expectations to 17-21 cents a share, compared with its own previous guidance of 30-32 cents a share.

The company blamed waning consumer confidence, which has hurt sales in the past four weeks across all product categories. Minneapolis-based Best Buy said July sales were essentially flat with a year earlier. The company releases detailed sales data on a quarterly basis rather than monthly.

Other specialty chains posted mixed results with Charming Shoppes (CHRS: down $0.14 to $6.23, Research, Estimates), owner of Lane Bryant, youth-oriented retailer Abercrombie & Fitch (ANF: up $0.63 to $21.30, Research, Estimates), and Gadzooks Inc. (GADZ: down $0.18 to $7.92, Research, Estimates) reporting lower sales, and Wet Seal (WTSLA: down $0.60 to $11.29, Research, Estimates) and Chico's FAS Inc. (CHS: up $0.14 to $13.60, Research, Estimates) seeing slightly higher results for the month.

Children's retailer Gymboree Corp. posted an 8 percent increase in July same-store sales while women's apparel chain AnnTaylor (ANN: up $1.05 to $25.18, Research, Estimates) reported a 7.4 percent increase.

Talbots (TLB: up $1.67 to $28.30, Research, Estimates) sales tumbled 19 percent for the month, which was still better than company expectations. The company raised second-quarter expectations to 31-33 cents a share, slightly higher than the 30 cents a share forecast by analysts, according to First Call.