) -- The list of retailers that beat Wall Street's second-quarter profit expectations is growing. But that doesn't mean shoppers are returning to the stores.

On Tuesday, both





(TGT) - Get Report

reported better-than-expected earnings, but they achieved their numbers with cost cuts and leaner inventory, not sales growth.

Investors are rewarding these initiatives, as Saks' shares rose 4.5% to $5.59, while Target was up 7% to $44.10.

They join

Wal-Mart Stores

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Home Depot

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J.C. Penney

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Abercrombie & Fitch

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, and


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, as companies who have met their quarterly guidance despite sometimes precipitous sales declines.

Urban's Not Selling Out

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Cost cuts and leaner inventory management isn't a bad thing, of course. The recession provided retailers with an opportunity to clean up their business, and most are taking advantage. But a true retail recovery is impossible until the consumer decides it's time to spend.

Sales slipped 0.9% in the week ended Aug. 15, according to the International Council of Shopping Centers and Goldman Sachs, and on a year-over-year basis declined 0.6%.

"Even with the recent bout of summer weather, which may have been helpful to clear summer merchandise, those items were heavily marked down and really did not help reported sales," Michael P. Niemira, ICSC chief economist said in a statement.

ICSC predicts August same-store sales to decline between 3.5% and 4%.

The good news is that if consumers do decide to

open their wallets in time for the holiday season

, retailers will be prepared.

Leaner inventory levels could mean more full-price selling and could result in better gross margins. It will also allow companies to wean shoppers off the huge door-buster promotions seen last year.

For now, however,

shoppers are still focused on price. According to a study released by NRF and BIGresearch today, 47.8% of shoppers who started back-to-school shopping were influenced by coupons and sales. And one out of six shoppers who still have back-to-school shopping to complete will head to the discounters.

Despite the uneasiness of shoppers to spend, there are some retailers reporting sales increases, like

Urban Outfitters

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-- while


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today actually posted both a sales and an earnings increase.

Ironically, investors are turning a blind eye to this accomplishment. Shares of TJX were actually down 3.6% in morning trading to $34.12, even as the majority of the retail sector was in the green.

-- Reported by Jeanine Poggi in New York.

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