Chain Stores Come Up Short

Updated from 9:01 a.m. EDT

SAN FRANCISCO - Retailers reported sluggish September sales Thursday, with clothing sellers posting particular weakness and several warning of earnings shortfalls.

Many of the chains were quick to blame warmer weather for the lackluster results, saying high temperatures kept fall clothing items on the shelves. That in turn boosted inventory levels, leading to markdowns and weakened margins.

Still, the weakness was generally expected, and Wall Street yawned at the data. The S&P retail index was up 0.7% Thursday, helped by a rosier profit outlook from the sector's one bright spot in the month: Wal-Mart(WMT Quote).

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Collectively, retailers posted a 1.4% rise in September same-store sales, or sales at stores open at least a year. That was less than analysts' already modest prediction for a 2.1% gain, according to Thomson Financial.

Only 39% of the companies reporting September same-store sales beat Wall Street's expectations, while the 61% missed estimates.

Among the disappointments were retailers that have been the sector's brightest stars. Giants such as Target(TGT Quote), J.C. Penney (JCP Quote) and Nordstrom (JWN Quote) -- all significant outperformers recently -- cut their profit views.

While weather is frequently used an excuse for less-than-stellar sales, Ken Perkins, president of the research firm Retail Metrics, says the rising temperatures indeed played a role in the weak results. He also believes retailers are also hurting from a soft economy exacerbated by the housing slump.

"I definitely think (weather) skewed the number and made it worse than it could have been," Perkins says.