RPT-WRAPUP 4-Low prices reign in mixed August sales reports

(Repeating Sept 3 item)

* Late Labor Day hurt some chains in back-to-school

* Holidays seen improving from dreadful 2008

* Thomson Reuters same-store sales index down 2.9 pct

* Gap beats estimates; Children's Place misses

* S&P Retail Index up 1.2 pct (Adds analyst comments, holiday outlook)

By Brad Dorfman

CHICAGO, Sept 3 (Reuters) - Lower-priced U.S. retailers posted better-than-expected sales results in August as consumers looked to save money in the key back-to-school season, leaving luxury chains struggling.

That thriftiness is likely to persist in the all-important winter holiday season, experts said, although sales trends should improve from 2008, when consumers were mired in the worst recession since the Great Depression.

"We're probably beyond the weakest point in the cycle here and by year-end I would suspect that not only does arithmetic give you a positive comp number, but I think the economy does too," said Michael Niemira, the chief economist of the International Council of Shopping Centers.

Niemira said sales at stores open at least could plausibly rise 6 percent to 7 percent during the holiday season.

Still, consumers, who account for about 70 percent of U.S. economic activity, have been conditioned to seek value and still are facing high unemployment, ravaged retirement savings and falling home values.

"People pulled back last year out of fear," said Patricia Edwards, chief investment officer of investment advisory firm Storehouse Partners. "I think this year they're going to continue saving their pennies due to lack of money."

August sales on average fell 2.9 percent from a year earlier, according to Thomson Reuters. That was better than the 3.8 percent decline analysts expected and the best performance since April.

The Standard & Poor's retail index .RLX was up 1.2 percent in midday trading.

Consumers continued to favor retailers like Aeropostale Inc (ARO.N) and TJX Cos' (TJX.N) T.J. Maxx over higher-priced sellers like Abercrombie & Fitch Co (ANF.N) and Neiman Marcus [NMRCUS.UL].

Gap Inc (GPS.N) reported better-than-expected sales at stores open at least a year, falling only 3 percent and helped by a 4 percent increase at its lower-priced Old Navy chain [ID:nWNAB6360]. The company's shares rose 6.9 percent.

"It's really still a discounter's market and an off-price seller's market," said Ken Perkins, president of research firm Retail Metrics.

LABOR DAY SHIFT HURT

Most retailers still reported lower sales at stores open at least a year as the late Labor Day holiday hurt August results, but was expected to help in September.

Half the retailers that reported monthly sales results this week missed analysts' expectations, and 46 percent beat them.

Overall, the sales view is distorted by the shift of the U.S. Labor Day holiday -- which falls on the first Monday in September -- to Sept. 7 in 2009 from Sept. 1 in 2008. That means seven more pre-Labor Day selling days, including the entire holiday weekend, will be in the September sales reporting month this year. Last year, the Saturday of Labor Day weekend fell in August.

"Gone are the days of pre-Labor Day shopping," Wall Street Strategies analyst Brian Sozzi said in a research note. "Consumers are waiting right up to the holiday weekend to capture the best deals for early fall merchandise for themselves and their children."

Some of the impact from the later Labor Day was muted by a shift of some states' sales tax "holidays" into August from July, analysts said.

Children's Place Retail Stores Inc (PLCE.O), which sells kids' clothes, reported a worse-than-expected 8 percent decline in August sales. Analysts were expecting same-store sales to decline 3.3 percent, according to Thomson Reuters data.

Also showing weakness on the apparel side was teen retailer Hot Topic Inc (HOTT.O), which had an 8.1 percent decline, while analysts had called for a drop of 6.9 percent.

Costco Wholesale Corp (COST.O), the largest retailer that still reports monthly sales, beat analysts' estimates. It posted only a 2 percent decline in sales at stores open at least a year, rather than the 5.7 percent drop analysts expected, according to Thomson Reuters data [ID:nBNG421486], and its shares rose 8.3 percent.

Target Corp's (TGT.N) same-store sales fell only 2.9 percent, compared with the analysts' average estimate of a 5.1 percent decline, and the discounter's shares rose 1.6 percent.

The absence of data from industry giant Wal-Mart Stores Inc (WMT.N), which no longer reports monthly sales, means the economic view that this data provides is less complete. (Additional reporting by Jessica Wohl in Chicago, Lisa Baertlein in Los Angeles, Aarthi Sivaraman in Seattle and Chakradhar Adusumilli in Bangalore; Editing by Lisa Von Ahn)