NEW YORK — With disappointing September sales behind them, the nation's retailers are left with piles of cashmere sweaters, coats and other heavy fall items that have been languishing on their shelves because of the steamy weather.

For many merchants who need to quickly mark down fall leftovers to make room for holiday goods, the bloated inventories are a big profit problem.

For shoppers, they mean generous discounts.

On Thursday, retailers including Target Corp., J.C. Penney Co. Inc., Limited Brands Inc. and Nordstrom Inc. cut their earnings outlooks. Wal-Mart Stores Inc. was almost alone in raising its third-quarter profit projection because of expense-cutting.

"The question becomes, who has too much inventory and how does that impact holiday sales?" said John Morris, managing director of Wachovia Securities. The inventory problem, he said, has forced some retailers to try to cut holiday orders. It may be too late.

"The discounting is starting to spread," he said.

The sales reports also showed that consumers continue to be weighed down by higher energy prices, a slumping housing market and tightening credit.

"There is this growing anxiety out there," said Frank Badillo, vice president and senior retail economist at the Retail Forward consulting company. "And it's not just focused on the low-income households. I think you are starting to see it creep into the upmarket households."

Chris Donnelly, a partner in the retail practice at Accenture, noted that earnings warnings from retailers mean that stores have realized they're not going to be able to make their sales targets without heavy discounting.

"They are starting to see that this (holiday) season is going to be very promotional," Donnelly said.

The ICSC-UBS tally of retail sales rose 7 percent in September, compared with 4 percent in the year-ago period and a forecast for a 2.5 percent gain. The tally is based on sales at stores open at least a year, a key barometer of a retailer's health.

Wal-Mart reported a 1.4 percent increase in same-store sales, slightly below the 1.8 percent estimate from analysts surveyed by Thomson Financial.

The company said that apparel and home furnishings remain weak and that company research shows that customers remain concerned about their finances, particularly the cost of living.

But the discounter raised its profit outlook to a range of 66 cents to 69 cents per share from its previous 62 cents to 65 cents because of cost cutting.

Target said same-store sales increased 1.2 percent, dragged down by weak apparel sales. Analysts had expected a 2.2 percent rise.

Macy's Inc. posted a 2.7 percent drop in same-store sales, worse than the 1 percent projection. Penney had a 4.6 percent drop, below analysts' forecasts for a 0.1 percent decline. Nordstrom Inc., which beat Wall Street estimates, had a 3.2 percent gain, below the 5 percent estimate. The company lowered is third-quarter profit outlook because of disappointing sales. It also said larger than planned markdowns to clear excess inventory will hurt profit for the remainder of the year.