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Only a handful of chains representing roughly 13 percent of the U.S. retail industry report monthly sales. Major chains that don't report include Wal-Mart Stores Inc. and J.C. Penney Co. The figures are based on stores open at least a year and are a key measure of retailers' health because they exclude newly opened and closed stores. Economists watch the numbers because consumer spending accounts for 70 percent of U.S. economic activity. Discount stores were among the best performers. TJX Cos., which operates TJMaxx and Home Goods stores, and Ross Stores Inc. both reported better-than expected sales for the month and raised their earnings projections for the second quarter. Gap Inc. was a surprise outperformer. Revenue in stores open at least a year rose 10 percent, handily beating expectations for a 3.8 percent gain. The figure rose 13 percent at Gap stores, 12 percent at Old Navy and 8 percent at Banana Republic. Target also performed well, with revenue in stores open at least a year up 3.1 percent in July, as more shoppers visited its stores. Analysts had expected the measure to rise 2.7 percent. And Limited Brands Inc., which runs Victoria's Secret and Bath & Body Works, said the revenue figure rose 12 percent in July, double what analysts expected. The company also boosted its second-quarter earnings outlook and declared a special dividend on Thursday. Teen clothing sellers were mixed. Abercrombie & Fitch late Wednesday said revenue at stores open at least a year fell 10 percent in the second quarter. It also slashed its outlook for future earnings, including cutting second-quarter estimates to between 15 and 18 cents, about half of what analysts had expected. Teen retailer Aeropostale Inc. said revenue in stores open at least one year was flat for the quarter, and slashed its earnings expectations for the quarter. Its shares dropped more than a quarter in morning trading. Wet Seal and Zumiez both missed expectations for July.
But Hot Topic Inc. and American Eagle Outfitters Inc. both reported strong second-quarter results. American Eagle Outfitters Inc. on Wednesday raised its forecast for second-quarter earnings, saying that sales during the period were stronger than expected. Department stores were mixed. Macy's and Kohl's both topped expectations, but the more expensive Saks Inc. fell short.
[Associated
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