Retail sales beat expectations

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CHICAGO (Reuters) -- U.S. retailers, including Macy's Inc. and Abercrombie & Fitch, surprised Wall Street with better-than-expected September sales, suggesting shoppers could be loosening their purse strings ahead of the crucial holiday season.

This year's later Labor Day holiday pushed a good chunk of sales from August into September, but analysts had wondered if rising unemployment would weigh more heavily on spending.

Sales of clothing for the back-to-school season fueled many retailers' performances, especially in the early part of the month, as did easier results comparisons from a year ago.

Based on results from 24 retailers, 16 beat Wall Street estimates, and another six are due to report, according to Thomson Reuters data.

"I think the consumer is dipping their toe back into the discretionary waters right now, but just their toe," said Retail Metrics President Ken Perkins.

Many retailers continued to post declines in sales at stores open at least a year, but the drops were more moderate than analysts had forecast.

At Macy's (M, Fortune 500), sales fell 2.3%, half as much as analysts anticipated. Its shares rose 2.7% to $19.10 in premarket trading.

Teen apparel retailer Abercrombie (ANF) saw same-store sales drop 18%, but that was better than the 21% decline predicted by analysts. Its shares rose 4.6% to $34.15.

Limited (LTD, Fortune 500) and Children's Place (PLCE) were among those retailers that posted same-store sales increases.

Besides increasing joblessness, holiday spending could be further constrained by consumer aversion to debt. Total U.S. consumer credit posted a deeper-than-expected drop in August, suggesting consumers are opting to cut their debt rather than spend.

Aeropostale Inc (ARO)., American Eagle Outfitters Inc. (AEO) and Gymboree Corp. (GYMB) raised their quarterly profit forecasts. Still, not all of the gains are coming from stronger sales. Gymboree's optimism stemmed mainly from inventory control and taking fewer markdowns.

Gap Inc.'s (GAP, Fortune 500) sales fell more than anticipated, but its shares rose 3% after the company said margins came in significantly above last year.

Limited, whose chains include Victoria's Secret, posted a 1% increase in sales at stores open at least a year. Analysts expected a 2.4% decline.

Children's Place Retail Stores Inc. also reported an unexpected 4% rise in comparable sales. The results were aided by strong growth online, which the company includes in that figure.

"To see a retailer be very weak this September means that there probably has been a fundamental shift in consumption of their product," said Doug Conn, managing director and retail credit specialist at Hexagon Securities.

Analysts had forecast an average decline of 1.1% in September sales at stores open at least a year, according to Thomson Reuters data. That would be the smallest monthly drop since September 2008, when same-store sales fell 0.9%.

Retailers have posted consecutive declines in monthly same-store sales since September 2008, when Lehman Brothers' bankruptcy triggered a global financial crisis. In the previous month, retailers had notched a 0.2% gain.