Many US retailers reported stronger-than-expected August sales yesterday, but they had to use steep discounts to attract back-to-school shoppers.
The unusually high level of discounting raised concerns about margins for this quarter.
It also showed that apparel chains might have to keep offering bigger incentives at a time when consumers are spending more on their homes, cars and other durable items.
The back-to-school season is the second-biggest selling period of the year for US retailers, behind the winter holidays.
Same-store sales for the nine US chains that reported August sales rose 2.9 percent, mainly hurt by Gap and L Brands. Wall Street had expected a 3.2 percent increase, according to Thomson Reuters I/B/E/S.
Retailers were primarily hurt by weak mall traffic, and a highly promotional environment at the beginning of August.