In a sign that Americans are bracing themselves for hard times, or at least taking a break and holding their breath while they see what direction things go in, apparel chains reported September sales, which usually rise at this time of year, were not at all where stores expect them to be.

In a sign that customers are looking toward frugality, WalMart Stores, Inc. (NYSE: WMT) saw a small gain in sales, though not as much as analysts would have liked.

Look for this effect to hit other retail environments, not just apparel, if the market continues to be the top headline and spook customers.

Shares of sports shoes and apparel giant Nike (NYSE: NKE) are trading up over 5% after hours today, following strong earnings for its fiscal first quarter.

As I noted in my earnings preview earlier this week, Wall Street was looking for 92 cents earnings per share for Nike's first fiscal quarter. The company surprised to the upside with a reported EPS of $1.03 a share. While this is down year-over-year from the $1.12 EPS it reported last year in the first quarter, it was still a good quarter considering the current economic environment.

Revenues grew nicely for Nike in the quarter, up a very respectable 17% to $5.4 billion. This also came in above analyst estimates of $5.19 billion.

One aspect of the company's overall business I discussed in the preview was that last quarter the company was able to overcome weak U.S. sales numbers by posting strong growth in international markets. This quarter, too, a weak U.S. dollar has helped boost sales in India and Asia, in particular China, where the recent summer Olympic games were held.

Wednesday afternoon following the market close, Nike Inc. (NYSE: NKE) will be reporting its fiscal first quarter earnings, and analysts are looking to see the company show earnings for the quarter of 92 cents per share.

The last time that the company reported was back on June 25, when it was able to beat out Wall Street estimates by two pennies, with a reported 98 cents per share for its fiscal fourth quarter, mostly a result of strong international demand, which was able to overcome weak consumer spending that hurt the company at home in the U.S. In fact, to find the last time that the company reported quarterly figures under Wall Street estimates, you would have to go all the way back to its fiscal fourth quarter 2006 when it missed by a penny, with a reported 70 cents per share.

On a year over year basis, should Nike come in with 92 cents per share, it would be a 16.9% drop from the $1.12 that it was able to earn during the first quarter of 2007.

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Needless Markup below in the comments.

Neiman Marcus may be the most successful upscale retail department chain that selected shoppers love to hold a grudge against.

The chain caters to primarily female, upper-income and upper-middle shoppers, and features designer lines that rival boutique (and beyond) price levels.

Further, while some of the products are decidedly exclusive, some are not or appear to not be, according to shoppers, but the prices of these items remain in the stratosphere, and it is for this reason that the store was tagged with the nickname "Needless Markup."

Here's a classic example. About a year ago Marie Lang, sister of yours truly, was searching for a leather shoulder bag. She found a medium brown, designer bag she liked for $1,200 at Neiman Marcus. However, being a discerning/critical comparison shopper, Marie of course took a few days to scout the competition.

The result? She found a comparable shoulder bag at Bloomingdale's for $595. Had she been willing to take a slightly smaller bag, she could have secured one for $395.

It's a really bad time to be in low-end apparel. Levis Strauss, which is privately owned but has publicly-traded bonds and therefore reports its earnings, saw its second quarter operating income decline from $118 million to $52 million, driven by an 8% decline in revenue and increased selling, general and administrative costs.

President and CEO John Anderson commented that "The retail environment in the United States remained challenging. . . Increasingly difficult economic conditions in many markets worldwide are impacting consumer spending, but our brands remain strong."

The Wall Street Journal reports (subscription required) that the company's bonds that come due in 2015 have fallen to 95.75 cents on the dollar after 5.5 cent drop in the past week -- the debt carries junk ratings and, given the absolute garbage that's rated investment grade these days, that's saying something.

With all the awful reports coming out on fashion and apparel companies lately -- and the beatings the stocks have taken -- you have to wonder whether they're becoming a good contrarian play. People will buy new clothes eventually, won't they?

This post is part of a series on some of the most memorable companies that have disappeared.

How is this for a post-op? "The fashions were too forward," said apparel industry analyst Kurt Barnard. Merry-Go-Round was a huge clothing chain targeted at teens and young adults, one in which (I couldn't make this up folks) my best friend in high school worked, gaining her great respect amongst the shopping-obsessed teens we were.

In the late 1980s and early 1990s, Merry-Go-Round was the darling of Wall Street and the suburbs where Jessica sold $70 rayon shirts for minimum wage plus commission. Its 536 stores comprised Merry-Go-Round, Dejaiz, Cignal, and Chess King, the latter an acquisition made a few years before its demise. One blogger called the apparel "faux upscale" and wrote of the chain's merchandise, "the cheesiest, sleaziest, ugliest and most eye-searing '80s clothes you could possibly find. Velcro closures? Check. Mesh designs? Check. Excessive use of leather? Check. Odd-colored thick v-neck sweater vests? Check."

Sadly, the mid-nineties teen did not want to wear v-neck sweater vests, mesh, or paisley rayon blouses. According to the New York Times, the 1990s teen wanted ripped jeans from Wal-Mart. The company had expanded too fast, too furious, changing merchandising strategies so frequently that its edgy consumers couldn't keep up. The business was so overtly trendy it tipped over the edge. Merry-Go-Round filed for Chapter 11 bankruptcy protection in 1994, but couldn't stay afloat and liquidated all its assets in 1996 when its chief backer, Fidelity Management, pulled its support.

The music stopped for Merry-Go-Round, and all the mesh-covered horsies fell off. None of the children, it seems, cried.

Let us know in the comments what you miss about Merry-Go-Round. And be sure to check out other Companies That Have Vanished.

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and a competitive advantage in established markets, preferably with a favorable global trend as a support. With this in mind, Avon is worth an evaluation.

For decades a door-to-door company, Avon (NYSE: AVP) has stepped into the globalization and digital ages, and the initial progress reports are positive.

Avon is the midst of a restructuring aimed at increasing efficiency and widening the company's sales venues. In its most recent quarter, Avon's North American region was a laggard, but its international business performed well, registering a 16% increase in sales, with double-digit gains from Central/Eastern Europe, and an impressive 29% rise in China. Further, in general, analysts were pleased with AVP's emerging market performance, citing brand building gains and an ability to attract much-sought, younger-adult women. As a result, AVP is on-track to meet analysts' 7-9% revenue gain for F2008.

Direct selling (5.3 million representatives) continues to be AVP's base, but catalogs, mall kiosks, a day spa, and a web site create a diverse retail presence.

All the while, Avon has also reduced its costs by initiating manufacturing operations in lower-cost regions of the world, and via sales force productivity increases. The company's expanded product base (cosmetics, fragrances, toiletries, jewelry, apparel, and home furnishings) is succeeding at widening its brand appeal across categories. The Reuters F2008/F2009 EPS consensus estimates for AVP are $2.16/$2.57.

A piece in the USA Today reports that top retail chains have improved their supply chain management to get the hot new fashions in stores more quickly before.

Sounds great, right? Maybe not. According to the article. "With the tighter economy squeezing retailers industrywide, several companies have hit on a successful formula for propping up earnings: They're speeding up the time it takes to get the latest fashions into their stores."

Obviously increased efficiency is great and there's nothing not to like about improved ordering, fewer markdowns, etc. But it could be creating a false sense of optimism if it's allowing for the frontloading of sales. $30 million in sales in the first quarter and then $10 million in the second is the same as $20 million in each quarter: but if you don't know about the differences in inventory situations, you could have a false sense of optimism at the end of the first quarter.

Time will tell whether better supply chain management is messing with the distribution of sales throughout the year.

This afternoon Crocs, Inc (NASDAQ: CROX) reported its first quarter numbers, and the stock is soaring in after-hours trading -- despite missing Wall Street estimates by a penny.

Going into this afternoon's report, analysts were expecting to see the company show earnings of 10 cents a share, but the company failed to miss that estimate, by posting 9 cents a share for its most recent quarter. Despite missing by a penny, the stock has been moving up strongly in after-hours trading, with investors so far pushing shares up a bit over 14%?

Doesn't sound right, does it? The recent market has been punishing stocks that have missed estimates, so why is CROX shooting to the upside?

TJX Companies (NYSE: TJX) is the largest, family / off-price apparel and home fashion retailer in the United States, boasting seven retail concepts.

Readers of this space know that, given the uncertainties regarding U.S. economic growth, household formation, and job creation, the retail sector is to be avoided. Still, there are exceptions, and with the aforementioned in mind, TJX Companies is worth a review.

In general, analysts expect F2009 revenue to increase 5-7%, including a 3% same store sales increase. The flagship Marmaxx Group (operator of the T.J. Maxx and Marshalls stores) should lead the way, with better brands and increased productivity. A solid performance is also expected from the HomeGoods retail chain.

Further, operating margins are expected to improve, due to increased higher-mark-up sales, diligent control of expenses, and the company's 2500-store buying power advantage. TJX's TJ Maxx and Marshalls stores have become a destination of choice for value-oriented consumers seeking 20-40% price reductions on brand-name apparel. Further, those two chains may benefit in 2008 as certain shoppers, stung by decreased disposable income due to rising energy costs, seek to lower their clothing budget. The Reuters F2009/F2010 EPS consensus estimates for TJX are $2.22/$2.44.

The risks? TJX remains vulnerable to sudden changes in consumer apparel preferences.

The First Call mean rating for TJX is: Buy. [19 firms.] Mean 2008 target: $36. [high: $38, low: $33.]

Stock Analysis: TJX Companies is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from TJX's shares. Sell / Stop Loss if you were to purchase shares in this company: $23.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth evaluating is Urban Outfitters.

Urban Outfitters, Inc. (Nasdaq: URBN) operates more than 120 specialty retail stores under the Urban Outfitters, Anthropologie, and Free People brands, and also offers clothes via a wholesale division under the Free People label.

Analysts like the fact that URBN carries in-demand, self-expressive merchandise, with differentiated retail brands. Most analysts believe the company has achieved a retail gold star: a unique brand position in the ages 18-24 customer category. Moreover, a relatively high 50/50 private label/nation brand inventory lowers inventory risk.

Sales increased an impressive 23% in FY 2008, with analysts seeing a 20-25% rise in FY 2009. Operating costs are reasonable. The Reuters FY 2008/FY 2009 EPS consensus estimates for URBN are $0.90 to $1.15.

At one time, Wal-Mart (NYSE: WMT) wanted to be a trendy place to buy clothes. It thought that would fatten margins and bring in higher end customers. It never worked. The middle class did not appear to warm to the idea of buying fashion at a warehouse.

The largest retailer has seen the error of its ways and a number of people in the apparel unit will pay for the company's mistakes. According to The New York Times, "in a major revamping of its sluggish clothing business, Wal-Mart Stores will shut two divisions at its headquarters in Arkansas, eliminate dozens of positions and move dozens more to New York City."

Selling clothes is a $30 billion business for Wal-Mart, so it will not do anything to exit that part of its operation. But, it clearly has no interest in trying to be the "trend setter" by locating the latest fashions and hoping it can present them with appeal down the aisle from the guns and ammo section.

Now, it will just sell clothes, the kinds of shirts, pants, and dresses that most people who don't care about designer labels wear.

Douglas A. McIntyre is an editor at 247wallst.com.

You know the fashion industry is in trouble when one of the hottest-selling trends is a rubberized sandal-shoe named after a reptile.

According to the New York Times, sales of women's apparel were down 6% for the first half of the Christmas season. However sales of men's clothing were up 4.5%.

Experts have been quick to blame the usual suspects for the women's clothing weakness: economic woes, housing troubles, rising gas prices -- but that doesn't fully explain it. Electronic sales are up 5.8% and sales of luxury goods have soared 10.8% -- the struggles of Coach, Inc. (NYSE: COH) notwithstanding.

While holiday sales have been lukewarm, the expected growth of 4%, the lowest rate in 5 years, indicates that there is some other factor driving the slowdown in women's clothing.

According to Fortune, the problem is that there are no must-have women's fashion products and trends to loosen nervous purse strings. Skinny jeans just aren't enough to drive nervous consumers into the stores.

This could actually be bullish for the industry: The fact that the major factor driving the slowdown appears to be within their control -- as opposed to broader macroeconomic factors -- means that they could bounce back stronger next year if they get some hotter threads in the pipeline.

Crocs (NASDAQ: CROX) was one of the best-performing stocks of 2007 until it hit the wall after releasing its September 30th quarterly results. The stock began 2007 at $20.68, ran up to a high of $75 and now sits at $45. The December, March and June quarterly results were spectacular, exceeding both top line and bottom line expectations. The company and analysts raised expectations for forward quarters and the hedge funds that were short the shares thinking the company is just "a fad", got annihilated.

The September quarter results were by all measure excellent as Crocs reported revenues of $256 million, up 130% from the previous year and earnings were up 144% to 66 cents per share. The consensus estimates were for earnings in the 63 cent to 64 cent range and revenue was expected at $253-$258 million. With revenue not "crushing" expectations, the stock was crushed, down from $75 to $32.

In spite of the stock coming down dramatically, many portfolio managers that missed the first run up from $21 to $75 had an excellent opportunity to begin buying the shares. Many have. The stock has rebuilt its value to the $45 level and is still inexpensive versus any traditional valuation methodology. Street expectations for earnings this year is $1.98 and $2.70 for 2008, a solid 35% growth. Revenue will come in this year at $830-$840 million and expectations for 2008 are set for $1.150 billion, again up 35-40%.

Given concerns about a possible slowdown in U.S. consumer spending in the quarters ahead, U.S. retailers haven't received much respect lately on Wall Street. But Target Corporation (NYSE: TGT) is one that should.

Target should post healthy 2007 same store sales growth on improving margins, aided by refinements to its electronics, apparel and home furnishings offerings, with a continued focus on value.

Further, Target's new store opening timetable remains on-schedule, with the company planning to open 100 new stores in F2008, including 30 SuperTarget stores; each should help overall revenue, although investors should keep in mind that these stores are not counted in same store sales revenue statistics. Target's shares closed Friday up 83 cents to $53.93.

In addition, Target's marketing campaign seems to be registering better with upper-middle-income shoppers, who appear to be increasingly seeking better values. The Reuters F2008/F2009 EPS consensus estimates for TGT are $3.56 to $4.06.