Retailers reported modest June sales results on Thursday as industry leader Wal-Mart Stores Inc. and teen favorite Abercrombie & Fitch Co. topped Wall Street's conservative expectations while a number of department stores and women's specialty retailers foundered.

Wal-Mart, the world's largest retailer, reported a better-than-expected rise in June sales at its U.S. stores open at least a year and said its previous forecast for higher second-quarter earnings is attainable.

But the discount retailer warned that the environment remains challenging.

Consumers continue to be challenged financially, with more pressure on discretionary spending, Eduardo Castro-Wright, Wal-Mart Stores U.S. president and chief executive officer, said in a statement.

Retail sales have been trending lower than last year as weakness in the housing market ripples across the sector and high fuel prices take a larger bite out of shoppers' wallets.

The trend has raised concerns about whether the strength of consumer spending, which accounts for roughly two-thirds of national economic activity, will hold up.

Earlier this week, Sears Holdings Corp. and Home Depot Inc., the largest U.S. home improvement chain, issued profit warnings, hurt by the prolonged slump in the housing market.

It seems clear consumers continue to face economic headwinds weighing on shopper enthusiasm to spend, wrote Susquehanna Financial Group analyst Thomas Filandro wrote in a note this week.

GETTING SET FOR SCHOOL

In June, retailers typically mark down merchandise to clear their stores of summer goods and get ready for the back-to-school season.

Wal-Mart reported a 2.4 percent rise in June sales, topping an average forecast of 0.9 percent among analysts polled by Reuters. The company had forecast sales would be flat to up 2 percent.

For July, when it will start selling back-to-school merchandise, Wal-Mart forecast same-store sales would rise just 1 percent to 2 percent. High gas prices remain a top concern for shoppers, it said.

The company said its second-quarter earnings forecast of 75 cents to 79 cents per share from continuing operations is attainable. Analysts, on average, expect 77 cents per share, according to Reuters Estimates.

Abercrombie & Fitch reported a 2 percent rise in June same-store sales. Analysts, on average, were expecting a 3.2 percent decline, according to Reuters research.

But apparel retailer AnnTaylor Stores Corp. reported an 8.4 percent decline in June, citing slow customer traffic and continued weakness at its LOFT chain. Analysts, on average, expected a 4.8 percent decline.

Department store operator Macy's Inc. continued to struggle, reporting a larger-than-expected 2.7 percent decline in June sales at stores open at least a year.

Also posting lower-than-expected sales results were department store operator Bon-Ton Stores Inc. and women's apparel retailer Bebe Stores Inc.

On a positive note, warehouse club operator Costco Wholesale Corp. reported a 6 percent rise in June sales at stores open at least a year, while analysts were expecting a gain of 5.8 percent.

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