NEW YORK (CNN/Money) -
The month of September may have been better for retailers overall -- but not by much -- as consumers continued to spend cautiously on new merchandise.
Wal-Mart Stores (WMT: Research, Estimates), the world's largest retailer, on Thursday reported September sales at its stores open at least a year -- a key retail measure known as same-store sales -- rose 2.4 percent for the five-week period ended Oct. 1.
The result was at the low end of its previous guidance of a 2 to 4 percent gain for the period. Total sales including new stores rose 10.8 percent to $25.7 billion from $23.2 billion a year earlier.
For October, Wal-Mart (WMT: Research, Estimates) sees sales at stores open at least a year to be up in the 2 to 4 percent range.
Even though the company blamed the sluggish sales on unfavorable weather and a late Labor Day that deterred back-to-school shopping, analysts pointed to larger macro-economic issues that continue to weigh on consumers.
"Weaker spending on seasonal goods has been building up for four months now. The two factors hurting consumers particularly at the low- and middle-income levels are that wages have not grown and gasoline prices could go even higher," said Richard Hastings, chief retail analyst with Bernard Sand.
Wal-Mart CEO Lee Scott stated at its analysts meeting earlier this week that even though he felt the economy was improving, Wal-Mart's core customer was still being hurt by higher energy prices, which left its shoppers with less money to spend in Wal-Mart stores.
"We're at an extremely dangerous situation where home heating bills could be shockingly high this winter," Hastings added. "This is very bad news especially in the northeast part of the country, where the population represents a pretty big chunk of national retail sales."
Target Corp (TGT: Research, Estimates). the second largest discounter behind Wal-Mart, fared better. Target logged a 5.6 percent rise in same-store sales, well above it's forecast of a 2 to 4 percent gain
Among the specialty apparel names, Limited Brands (LTD: Research, Estimates), parent of Victoria's Secret and Bath & Body Works chains, posted a 5 percent decline in sales last month, well below its own forecast for a mid-single digit gain.
In a statement, the company said apparel sales at stores open at least a year fell 25 percent from the same period one year ago because of the shift in timing of clearance sales from September last year to October this year.
Women's apparel retailer Ann Taylor (ANN: Research, Estimates) slashed its third-quarter profit estimates after its same-store sales unexpectedly came in worse than expected. Sales last month rose 1.4 percent compared with its own forecast of a 2.3 percent gain.
The company said it now expects third-quarter profit of between 28 cents to 32 cents a share, down from its previous outlook of 48 cents to 50 cents.
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Comparable sales at No. 1 apparel retailer Gap Inc. (GPS: Research, Estimates) fell 3 percent last month despite heavy promotions at its namesake stores.
"We've already seen some big disappointments in both Limited and Ann Taylor. Up front, retailers are also facing their most difficult hurdle of the year in the form of a 6.1 percent gain racked up in September last year," said Ken Perkins, retail analyst with Retail Metrics.
"The string of hurricanes that pummeled Florida and the southeast in late August and the first half of September will clearly offset some of the benefit derived from the Labor Day shift," he added.
Perkins said he expects overall sales in September to have risen 2.4 percent for the 70 retail names that he tracks. That's a modest improvement from the 1.2 percent gain in September but softer than the 2.9 percent forecast analysts were predicting a week ago.
One group that bucked the retail downdraft last month were the teen apparel sellers, with American Eagle Outfitters (AEOS: Research, Estimates) posting a stellar 23.3 percent jump in its same-store sales and sales up 2 percent at Abercrombie & Fitch (ANF: Research, Estimates). Pacific Sunwear (PSUN: Research, Estimates)'s sales grew a strong 9.8 percent.
Luxury purveyor Nordstrom (JWN: Research, Estimates) saw a 6.2 percent rise in sales at its stores. However, sales at Saks (SKS: Research, Estimates) fell 4 percent after hurricanes in the southeast forced it and other retailers to close a significant number of outlets in the region.
Among the department stores,Federated (FD: Research, Estimates), parent of Macy's and Bloomingdales, reported flat September same-store, Kohl's (KSS: Research, Estimates) suffered a 1.3 percent decrease and sales at Sears (S: Research, Estimates) fell 3.2 percent in the period.
Bernard Sands' Hastings said despite the muted picture, he doesn't think the critical holiday season, which accounts for almost half of annual sales and profits for some merchants, will be a complete disappointment.
"Consumers have a way of pulling it together for the holidays," said Hastings. "We could see weakness in apparel and footwear sales but electronics, entertainment products and gift cards could do very well in the fourth quarter."
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