Sector Snap: Department stores slide

Shares of Saks Inc. fell the furthest, shedding 47 cents, or 4.2 percent to $10.86 in morning trading. The luxury department store operator reported a 5.9 percent drop in same-store sales for the month--a bigger decline than Wall Street analysts expected, according to a poll by Thomson Reuters.

Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly-opened ones.

Saks said women's apparel and shoes and intimate apparel were some of its worst performers.

Nordstrom Inc. also reported a bigger-than-expected drop in August sales. Same-store sales fell 7.9 percent while analysts expected a decline of 7.1 percent. The chain's full-price stores reported dismal sales while its discount concept performed well.

Shares fell $1.28, or 3.8 percent, to $32.05.

Dillard's Inc. also reported a worse-than-expected drop. Same-store sales slid 7 percent while analysts anticipated a dip of 4.7 percent. The company blamed Hurricane Gustav and disappointing sales in its children's and junior's departments. Its shares fell 20 cents to $13.25.

Kohl's Corp., meanwhile, which offers more lower-priced merchandise, reported better-than-expected same-store sales Wednesday. The company said sales at established locations dropped 5.8 percent. Analysts expected a bigger decline of 7.8 percent.

Shares still fell 61 cents to $51.85 in Thursday morning trading.