• by Sarah Mahoney  @mahoney_sarah, August 16, 2011

While blaming economic uncertainty for a bigger-than-expected decline in its U.S. sales, Walmart raised its earnings forecast for the full year, and says it is encouraged by sales gains in apparel and hardlines.

For the second quarter of its fiscal year, the Bentonville, Ark.-based company says total sales rose to $108.6 billion, an increase of 5.5% from $103 billion in the same period last year. Net income rose 5.1% to $3.94 billion, from $3.75 billion in the year-ago period.

But on a same-store basis, sales in its U.S. Walmart stores fell 0.9%, when observers had been expecting a decline of just 0.6%. At Sam's Club, same-store sales rose 5%. (For the first six months of the year, Walmart U.S. sales declined 1%, while Sam's Club sales rose 4.6%.)

In the company's earnings release, Bill Simon, Walmart U.S. president and CEO, says the company is encouraged by continuing positive results in its grocery and health and wellness businesses, which account for roughly two-thirds of its sales, and that it is also seeing improvement in both hardlines and apparel sales.

"We remain concerned about the economic pressure on our customers and the uncertain impact it can have on their shopping behavior. With this volatility, it is as important as ever to deliver on Walmart's one-stop shopping promise for broad assortment and every day low prices," he says.

Still, based on its forecasts for both U.S. and international sales, the company raised its earnings projections for the year. "This reflects our confidence in the business for the back half of the year," the company says.

Other retailers are also reporting stumbling sales. In its latest report on the apparel business, NPD Group says while overall clothing dollar sales increased by just less than 1% from January to June, sales of women's togs fell 0.8%. (Men's clothing gained 4.6%.)

"The apparel market numbers were starting to look good again," writes Marshal Cohen, chief industry analyst, in its report. "However, the women's market is dragging, and women may continue to 'shop in their closets' and make concessions in favor of their family members' needs."

Men appear to be in what he describes as "the need/replenishment cycle, as well as a 'dress-for-success' mindset." And women are spending more in such categories as dresses, suits and hosiery: "While women for the most part are foregoing their own wardrobe needs, they are picking and choosing from categories that might have a benefit in their professional lives."