Cold weather last month put consumers in the mood to buy fall clothing, boosting sales at specialty apparel chains and improving sales overall for U.S. retailers.
Sales rose a better-than-expected 3.1 percent, according to a tally of 81 national chains by Bank of Tokyo Mitsubishi Ltd. The increase represented the strongest monthly performance since June.
"It generally was a better month for the industry as a whole than expected three or four weeks ago," when low consumer confidence and worries over job and wage cuts had the bank predicting retail sales growth of no better than 2 percent, said Michael P. Niemira, a vice president at the Bank of Tokyo. "The performance was relatively strong against low expectations."
Several retailers noted that margins benefited because of consumers buying more apparel at regular prices, rather than on sale.
"Given an incentive, the American consumer is willing to come out in full force, despite the uncertain economic climate," said Kurt Barnard, president of Barnard's Retail Trend Report. "That incentive was cold weather."
Specialty stores benefited as consumers looked for new fall and winter fashions.
Sales rose 18 percent at women's apparel chain Chico's, 18.6 percent at Pacific Sunwear of California, 3 percent at The Limited Inc., 1.7 percent at Talbots and 0.2 percent at AnnTaylor Stores Corp.
At Gap Inc., which has not posted a same-store sales gain since April 2000, sales shot up 11 percent last month.
"Overall, October results across all brands significantly exceeded our beginning-of-month expectations," as more apparel sold at regular price, said Gap's Heidi Kunz, chief financial officer.
Those that fared the best anticipated consumers changing tastes, which have shifted to more classic looks and away from the hippie, peasant look, said Jennifer Black, executive vice president and senior research analyst at Wells Fargo Securities.
"Some of the companies that didn't do as well - Wet Seal and Bebe - had too much of that type of fashion," Black said. "People are being careful with their dollars, but they are spending."
Sales remained sluggish at the department stores, which have been losing market share to the lower-priced discounters.
Federated Department Stores Inc., parent of Bloomingdale's and Macy's, said sales rose 0.3 percent last month but that because of the colder weather, the slight increase exceeded the company's expectations of a decline of 1 percent to 2 percent.
Sales slid 10 percent at Sears, Roebuck and Co.
"The weakening economy significantly impacted sales in the big ticket full-line and dealer store categories, particularly home appliances, lawn and garden, home electronics, and fine jewelry," said Alan J. Lacy, Sears' chairman and chief executive officer, who noted that apparel sales improved.
Saks Inc. reported a 0.7 percent decrease, with sales pulled down by a 2 percent decline at Saks department store group, where sales were weak in junior's apparel and men's and women's sportswear.
Two exceptions in the department store category were Kohl's Corp., which reported an increase in comparable sales of 18.3 percent - driven by increases in seasonal apparel - and J.C. Penney Co., where sales climbed 13.7 percent, significantly more than expected.
Analysts said those department store chains fared better because consumers are drawn to the more value-oriented stores.
Discounters, too, posted sales increases, as they have for months, though signs of the weakened economy were apparent.
Target Corp. said its 1.5 percent increase in same-store sales was on plan. Sales rose 3.7 percent at Wal-Mart Stores Inc., the nation's biggest retailer.
Sales fell 3 percent at Abercrombie & Fitch. But with sales better than expected, the company said it will exceed its earnings predictions for the third quarter.