Merchants get punished in July

NEW YORK (CNNMoney.com) -- Merchants suffered their second-worst monthly sales of the year in July -- a trend that could signal that the back-to-school shopping season, the second-biggest selling period of the year, will be much weaker than expected.

Several of the nation's leading retail chains -- including mall-based specialty sellers, teen clothing chains, department store chains and even discounters -- suffered declining same-store sales last month as consumers continue to shun non-essential discretionary purchases.

Same-store sales -- an important gauge of a retailer's performance -- measure sales at stores open at least a year.

Sales tracker Thomson Reuters, which tracks monthly same-store sales for 30 chains such as Target (TGT, Fortune 500), Gap (GPS, Fortune 500) and J.C. Penney (JCP, Fortune 500) said overall July sales for the group fell 5.1%, compared to a gain of 1.1% last July.

July's slump marked the 11th consecutive month of same-store sales declines. The firm said more than half of the retailers it tracks missed their sales estimates for the month.

Last month's result was also the second worst monthly performance of the year following January's monthly same-store sales decline of 5.7%.

Cooler-than-expected weather in July combined with more parents waiting to commence their school-related shopping in August when the tax-free shopping events take place hurt sales volumes last month, said Jharonne Martis, senior research analyst with Thomson Reuters.

Among the misses, discounter Target (TGT, Fortune 500)'s sales fell 6.5% versus analysts' expectations for a 5.8% decline. Macy's (M, Fortune 500) sales slumped 10.7%, worse than analysts' forecasts for a 9.1% decline, while sales at J.C. Penney fell 12.3%, slightly better than the company's guidance for sales to decrease 13% to 16%.

Elsewhere, apparel seller Gap Inc. reported an 8% drop in its same-store sales last month while sales at teen clothier Abercrombie & Fitch tumbled 28%.

However, mid-priced department store chain Kohl's barely escaped the downdraft, posting a slight 0.4% sales increase in July, while high-end chain Nordstrom reported a 6.9% dip in its same-store sales, better than analysts' forecast for a 11.1% decline.

Martis said Wal-Mart (WMT, Fortune 500), the world's biggest retailer, likely stole sales away from many of its peers because of its value prices that continue to attract more shoppers from all income levels into its stores.

Wal-Mart no longer reports monthly same-store sales. However, the retailer is expected to report a 1.1% gain in its quarterly same-store sales when it reports its quarterly results next week.