Tough Month, Better Quarter for Retailers

Several big retailers reported positive news Wednesday, raising guidance on stronger-than-expected sales despite what many called a difficult retail environment.

Discount giant Wal-Mart ( WMT) said it expects to meet or exceed its previous forecast of 44 cents to 45 cents a share for the second quarter on higher July sales. Analysts polled by Thomson Financial/First Call are looking for 45 cents.

The company said that comparable-store sales were up 4.5% for July, while total sales increased 11% to $17.8 billion from $16 billion last year. The Wal-Mart division posted a 12% increase in total sales to $11.3 billion, while Sam's Club saw 7% growth to $2.1 billion.

Jewelry and accessories retailer Claire's Stores ( CLE) said same-store July sales were up 4%. Total sales increased 10% to $79 million from $72 million in the year ago quarter. For the entire second-quarter, total sales were up 8% to $238.6 million from $221.3 million.

In a press release, Claire's CEO Rowland Schaefer said, "Sales for Claire's North America were beyond expectations for the second quarter considering this tough retail environment. I am happy to report we expect earnings per diluted share to exceed our previous upwardly revised guidance of 23 cents."

Analysts polled by First Call had been expecting 23 cents for the quarter.

Trendy fashion retailer Urban Outfitters ( URBN) also reported higher sales for the quarter, with comparable-store sales up 11%. Total net sales for the quarter increased 26% to $101 million from $80.4 million a year ago, led by a 61% increase in direct-to-consumer catalog sales from the company's Anthropologie store. Comparable-store sales for Anthropologie, which targets women in their 30s, were up 15%, while Urban Outfitters stores, which focus on young adult apparel, saw an 8% increase.

Mall-based young adult apparel retailer Aeropostale ( ARO) said it was "very comfortable" with analyst estimates for the second quarter after reporting stronger July sales.

The company's total net sales were up almost 35% from a year ago to $31.1 million from $23 million. Comparable-store sales increased 4.3%. For the quarter, Aeropostale saw a 41% increase in total sales to $90.1 million and an 11.2% increase in same-store sales.

In a press release, the company added, "Our sales mix during the month was weighted heavily toward fall items compared to last year. This has positive implications for our merchandise margins, as well as our back to school season." The company was upgraded to strong buy by Merrill Lynch on the news.

And AnnTaylor Stores ( ANN) boosted its quarterly guidance to EPS of 38 cents from an earlier forecast of 29 cents to 30 cents. For the third quarter, the company also raised estimates to 50 cents to 51 cents from 45 cents to 46 cents. Analysts polled by Thomson Financial/First Call had been expecting 29 cents and 46 cents, respectively.

Ann Taylor said July sales were stronger than expected, increasing 18.5% to $100.6 million from $84.9 million last year. Comparable-store sales for July were up 7.4%. For the entire second quarter, total sales were up 10.6% to $310.2 million, while comparable-store sales were down 0.2%, compared to a 12.9% decline in the year ago quarter.

Shares of Ann Taylor were recently up 3.6% in preopen trading to $25 on the revised guidance.

Even troubled retailer Gap ( GPS) got into the guidance raising game, saying it now expects to earn 4 cents to 5 cents a share, ahead of First Call estimates calling for 3 cents.

The company said same-store sales for the quarter were down 7%, led by a 13% decline at domestic Gap stores. Total sales in the quarter are up about 1% to $3.3 billion from $3.2 billion last year. Commenting on its results, Gap said, "Overall, July sales did not meet our beginning of month expectations, particularly at Gap Domestic. Our total company merchandise margins improved year over year in all divisions with the exception of International."