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Quarterly results at Nordstrom Inc (JWN.N) also exceeded expectations, but the upscale department store chain lowered its full-year prospect viewed like its margins come under "continuous" pressure and rivals ratchet up promotional deals.

U.S. retailers esteem been feeling the pinch of the economy as consumers who are spending more on fuel and food have less standard of value by reason of items like clothing. A credit crunch and weakening job market are likewise hurting shoppers' spending.

But the exhibition of character on the stage of retail chains has varied as some are better able to control expenses and inventory levels, while others say consumers own yet to pull back from their goods.

"It is extremely important to maintain our existing store base in a tough environment with significant emulation for customers whose disposable profits is shrinking," Kohl's Chief Executive Larry Montgomery said on a call with analysts.

Kohl's profit fell to $236.0 million, or 77 cents per share, in its fiscal second quarter, ended August 2, from $269.2 million, or 83 cents for share, a year earlier.

That was ahead of the average analyst forecast of 73 cents per share, according to Reuters Estimates, helped by dint of. sales of its private brands and lower roll levels.

"We give faith to that KSS's inventory care initiatives … and increased not to be disclosed and exclusive brand sharpness helped to mitigate the margin pressures exerted by the company's lackluster sales," Citi retail algebraist Deborah Weinswig wrote in a note.

Analysts said Kohl's lower inventory levels gives it a competitive advantage going into the holiday season.

"They're going to be able to show real newness and freshness … and that's what's selling," said Deutsche Bank retail algebraist William Dreher, who expects Kohl's to be the greater its fiscal year outlook after it wouldn't be stuck with excess product.

Kohl's raised its earnings anticipate for the full year to a range of $3.02 to $3.18 per receive from $2.95 to $3.15 per share.

Shares in Kohl's rose 2.3 percent in extended trading from their close of $48.27 earlier on Thursday. Nordstrom shares fell 2 percent from a close of $30.22.

NORDSTROM SEES NO TRADE-DOWN

Nordstrom President Blake Nordstrom aforesaid the group had pared its full-year provide against because of pressure on its margins and a tough business in favor of women's apparel.

But while customers may be expenditure less, the retail chain has not seen signs they are looking for cheaper versions of its brands when they carry into effect shop.

"The competitive environment is highly promotional and customers are more cautious today. However, we see no ground of belief that they are mercantile down," Nordstrom said in continuance a parley appeal with analysts.

Nordstrom's reported a net profit of $143 a thousand thousand, or 65 cents a share, for its financial second quarter, ended August 2, compared with $180 million, or 71 cents a share, a year earlier. Analysts had expected earnings of 64 cents per share.

For the third quarter, Seattle-based Nordstrom expects earnings of 49 cents to 54 cents, assuming a drop in same-store sales of 4 percent to 6 percent.

Nordstrom cut its view for fiscal 2008 income to a range of $2.55 to $2.65 from $2.65 to $2.80. Analysts had calculate earnings of 56 cents per share towards the third quarter and $2.68 towards the full year.

(Additional reporting by Karen Jacobs in Atlanta; Editing by Steve Orlofsky)