July 9 (Bloomberg) -- Gap Inc. and Abercrombie & Fitch Co. reported June sales declines that were steeper than analysts estimated as a rise in U.S. unemployment and a drop in consumer confidence kept shoppers away from the malls.

Sales at U.S. stores open at least a year fell 10 percent at Gap, operator of the Old Navy and Banana Republic chains, compared with the 8.7 percent average of analysts’ estimates compiled by Retail Metrics Inc. Comparable-store sales at Abercrombie & Fitch plunged 32 percent, a bigger decline than the 28 percent projection. American Eagle Outfitters Inc. fell 11 percent, compared with a 7.8 percent average estimate.

Unseasonably cool and rainy weather and lack of consumer demand for discretionary purchases hurt June sales, according to Brian Sozzi, an analyst at research firm Wall Street Strategies in New York. The shortfall poses a challenge to specialty apparel chains seeking to sell back-to-school items, he said in a note.

“You’re going to have a lot of the clearance stuff still on the floors, and that’s going to counteract any traction in the full-price merchandise for back-to-school,” Sozzi said today in a telephone interview.

June accounts for about 35 percent of second-quarter retail sales and marks the beginning of summer clearance as retailers make room for fall merchandise, according to Betty Chen, an analyst at Wedbush Morgan Securities in San Francisco.

Gap, based in San Francisco, fell 30 cents, or 2 percent, to $14.95 at 4:05 p.m. in New York Stock Exchange composite trading. Abercrombie, based in New Albany, Ohio, declined $1, or 4.2 percent, to $23. Pittsburgh-based American Eagle dropped 21 cents to $12.89.

‘Tough Times’ Linger

The International Council of Shopping Centers said June retail sales declined by 5.1 percent based on results at 32 chains. Sales in July may decline as much as 5 percent, according to Mike Niemira, the New York-based trade group’s chief economist.

“Tough times certainly will linger for most even through the summer,” he said today in a telephone interview. “I suspect that as we get to August, that’s when we’ll start to see better performance.”

Retail Metrics, based in Swampscott, Massachusetts, said total June comparable-store sales fell 4.3 percent, better than its estimate of 4.6 percent, aided by results from “discount- oriented” companies such as TJX Cos.

T.J. Maxx

June sales at TJX, which owns the T.J. Maxx chain, rose 4 percent; analysts had anticipated a decline. The Framingham, Massachusetts-based company also boosted its second-quarter earnings forecast. The shares rose 3.2 percent today.

Wal-Mart Stores Inc., the world’s largest retailer, said on May 14 that sales at U.S. stores and its Sam’s Club membership warehouses may rise as much as 3 percent in the 13 weeks through July 31. The Bentonville, Arkansas-based chain stopped reporting monthly sales as of May 1, citing the difficulty of predicting shoppers’ behavior.

Employers in the U.S. cut more jobs than forecast in June and the unemployment rate rose to 9.5 percent, the highest in almost 26 years, limiting wages and threatening to erode the consumer spending.

Confidence among U.S. consumers slipped last month, the Conference Board reported on June 30, reflecting unemployment and wealth destruction triggered partly by a drop in property values. About 6 million jobs have been eliminated since the recession began in December 2007.

To contact the reporter on this story: Allison Abell Schwartz in New York at aabell@bloomberg.net.

Last Updated: July 9, 2009 16:25 EDT