By Brad Dorfman
CHICAGO (Reuters) - At luxury department store chain Saks Inc <SKS.N>, customers were buying more designer suits at full price.
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At Wal-Mart Stores Inc <WMT.N>, more customers were shopping with food stamps.
But company comments about consumer spending showed the split between upper-income consumers who have jobs and are little affected by rising costs for food and other essentials, and lower-income shoppers who are struggling with stubbornly high unemployment and rising costs.
"This is exactly what we continue to see quarter after quarter. There's just significant bifurcation here," Edward Jones retail analyst Matt Arnold said.
Wal-Mart said same-store sales at its U.S. discount stores, by far its largest business, fell 0.9 percent in the second quarter, the ninth straight quarterly decline at domestic stores open at least a year.
A weak U.S. economy has sent consumer sentiment to its lowest level since 1980, reflecting the additional stress on some consumers.
"They're trading down to stretch their budgets, buying a lower-priced brand of detergent, moving from branded canned goods to private label, and purchasing half gallons of milk instead of gallons," Wal-Mart Chief Executive Mike Duke said in a recorded message.
Also, more shoppers are relying on government aid to help pay for food and other necessities, Walmart U.S. CEO Bill Simon said on the call.
The world's largest retailer earned $1.09 per share from continuing operations in the second quarter, up from 97 cents a year earlier and near the high end of its forecast of $1.05 to $1.10.
Excluding a decline in the market value of currency derivatives, acquisition costs and other special items, profit was $1.12 per share, 4 cents above analysts' average estimate, according to Thomson Reuters I/B/E/S.
Saks was able to beat expectations as it kept control of inventory, leading to more full-priced selling in its second quarter, which is typically a slow one for the retailer.
The company reported a loss of $8.4 million, or 5 cents per share, for the quarter ended July 30, compared with a loss of $32.2 million, or 21 cents per share, a year earlier.
Analysts on average expected a loss of 9 cents a share, according to Thomson Reuters I/B/E/S.
The company said it expects same-store sales to rise in the mid-to-high single digits on a percentage basis in the second half of the year. August sales were running in line with its fall-season forecast as its customers appeared to be shaking off the volatility in the financial markets.
"The affluent (shopper) has almost every piece of the puzzle in place other than housing," Edward Jones' Arnold said, referring to the housing market, which remains in a years-long slump.
Home Depot CEO Frank Blake said he does not expect meaningful improvement in the U.S. housing market this year.
But the home improvement chain has been able to beat out rival Lowe's Cos Inc <LOW.N> by cutting costs more quickly and focusing on sales of lower-priced products to help increase traffic to its stores.
Its second-quarter net income rose to $1.36 billion, or 86 cents a share, from $1.19 billion, or 72 cents a share, a year earlier. Analysts on average were expecting 83 cents a share, according to Thomson Reuters I/B/E/S.
TJX posted a quarterly profit of 90 cents a share, beating analysts' average estimate by a penny, as customers continued to shop its T.J. Maxx and Marshalls chains for bargains on brand-name clothes and home goods.
Wal-Mart shares rose 3.8 percent in morning trade, while TJX shares were fractionally higher, Home Depot was up 5.1 percent and Saks fell 3.1 percent.
(Additional reporting by Dhanya Skariachan and Phil Wahba in New York, Nivedita Bhattacharjee in Bangalore and Jessica Wohl in Chicago; editing by John Wallace.)