By Martinne Geller

The gloom spread to off-price chains, which tend to outperform competitors in tough times because of their low prices. But Ross Stores Inc and TJX Cos Inc joined specialty chains Abercrombie & Fitch and Chico's FAS Inc on Thursday in posting worse-than-expected sales and cutting or withdrawing their earnings outlooks.

The results extend a drumbeat of bad news that started a day earlier when chains including Target Corp , J.C. Penney Co Inc and Saks Inc disappointed investors with weak sales and cut their outlooks for the key holiday shopping season.

The dismal figures showed the global credit crisis and plummeting stock market of the past month left almost no retailer unscathed.

Overall September same-store sales rose only 0.8 percent in that month, according to a sector-wide Thomson Reuters index of 34 retailers that reported over the past two days. That is about half as much as analysts had expected, and makes this the weakest September in at least eight years, according to Thomson Reuters data.

September was "a very weak month overall, with nearly all companies reducing earnings guidance," said apparel analyst Paul Lejuez of Credit Suisse in a research note. "For the first time in recent memory the off-pricers ... posted negative comps (same-store sales) and revised earnings down."

The Standard & Poor's Retail Index <.RLX> was down 3 percent in morning trade, slightly underperforming the wider S&P 500 Index <.SPX>, which was down 2.5 percent.

"Consumers are bracing for recession," said Retail Metrics president Ken Perkins. "Credit will continue to be very difficult to come by through the holiday shopping season and the jobs market is likely to deteriorate further."

Perkins said the performance gap between the likes of Wal-Mart Stores Inc and Costco Wholesale Corp , which sell necessities like food and medicine, and more discretionary retailers widened in September and should continue to do so as consumers forgo new clothes, accessories and home goods.

INSTABILITY HURTS SALES

Chico's reported a 15.6 percent fall in September sales at stores open at least a year, while analysts on average were expecting a 13 percent drop, according to Thomson Reuters Estimates.

"Our disappointing September sales results reflect the deteriorating macroeconomic environment," Chico's Chief Executive Scott Edmonds said in a statement. "This, combined with the unstable financial markets, has caused us to essentially withdraw our previous earnings outlook for the second half of this year, as predictability of future results is extremely difficult at this time."

Abercrombie said September same-store sales fell 14 percent, far worse than the 8.1 percent drop expected by analysts. The teen apparel retailer warned that "absent notable improvement in the macroeconomic environment and a return of consumer confidence," it expected current business trends to continue into the all-important holiday fourth quarter.

Abercrombie forecast earnings per share of 74 cents to 76 cents for its third quarter, which began on August 3, far below analysts' average estimate of $1.12 per share, according to Reuters Estimates.

The retailer, whose shares fell 9 percent, said it expected profit for the second half of the year to fall "appreciably below" its August forecast of $3.40 to $3.45 per share.

Gap Inc reported a worse-than-expected 11 percent decline in September sales, driven by a 24 percent drop at its Old Navy chain. Analysts on average were expecting an 8.3 percent decrease.

TJX and Ross Stores posted September sales declines, surprising analysts who had been expecting increases from the chains, which buy excess merchandise from manufacturers at below-wholesale prices.

TJX said September same-store sales fell 1 percent, when analysts expected a 0.5 percent increase. It now sees earnings per share of 55 cents to 58 cents in the third quarter ended on Oct 4, down from a prior range of 59 cents to 62 cents.

Ross blamed its decline on Hurricanes Gustav and Ike, Tropical Storm Hanna and unusually warm weather in the western United States as well as "the recent disruptions in the credit and financial markets."

Abercrombie shares were down $2.86 at $29.65 in midday trading on the New York Stock Exchange, while TJX fell 6 percent to $25.92 and Chico's fell 4 percent to $4.

(Additional reporting by Nicole Maestri, Aarthi Sivaraman and Sarah Coffey; editing by Gunna Dickson)