NEW YORK -(Dow Jones)- Retailers are expected to post lukewarm October sales, as persistently warm weather quelled demand for fall fashions and shoppers grappled with a stumbling housing market and high-priced gasoline.

While holiday sales may yet receive a boost from cool temperatures that have finally hit key markets including the Northeast, analysts caution that fall clearances have set the stage for heavy holiday markdowns. Already, numerous big chains including J.C. Penney Co. (JCP), Nordstrom Inc. (JWN) and Limited Brands Inc. (LTD) have warned that third-quarter profits will miss earlier expectations.

Major retailers, slated to report October sales on Thursday, will post a 2% gain in October same-store sales, or sales at stores open at least a year, according to a forecast by the International Council of Shopping Centers. That figure is short of the year-earlier gain of 3%, and there's still downside risk, says Michael Niemira, chief economist at the New York city weather based trade group.

While the job market still appears to be relatively solid, Niemira says employment levels at shopping centers have declined for the past three consecutive months. That's a signal that retailers are focused on keeping a lid on costs amid a muted holiday outlook, he says.

The sluggish housing market remains a key worry for consumers. In addition to the blow that declining home values can deal to shopper moods, sluggish housing sales result in lower demand for home furnishings, appliances and other goods to outfit new homes.

Meanwhile, stiff prices for food and gasoline are taking a toll on lower- income consumers. Wal-Mart Stores Inc. (WMT) said it expects October same-store sales to be flat or up as much as 2%, with sales being driven by aggressive discounting. Mid-month, Target Corp. (TGT) cut its same-store sales forecast to an increase of 2%-4% from its previous outlook of 3%-5%.

Warehouse clubs appear to be benefiting as consumers make fewer shopping trips and focus on the basics rather than discretionary purchases, says Charles Grom , an analyst at J.P. Morgan Securities Inc. For October, he expects Wal-Mart's Sam's Clubs and BJ's Wholesale Club Inc. (BJ) will each report same-store sales gains of 5%, while he expects Costco Wholesale Corp. (COST) to report a 2% rise.

Grom's outlook for department stores is less favorable, as they've faced warm weather in addition to broader economic concerns. He expects both J.C. Penney and its rival Kohl's Corp. (KSS) will miss Wall Street's expectation for October same-store sales of 2.1% and 3.1%, respectively.

Macy's Inc. (M), which has struggled for the past year after converting more than 400 regional department-store chains to the Macy's brand, may post a same- store sales decline of as much as 2%, says Bear Stearns analyst Christine Augustine . The chain faces difficult comparisons with a year ago, when it saw a 7.7% same-store sales gain as it launched a nationwide ad blitz to support the converted stores. But Augustine says that Macy's has done a good job controlling its inventory this fall and that recent promotions are luring customers into stores.

"We expect the level of promotional activity across the Macy's chain will remain elevated for the foreseeable future," Augustine said in a research note.

Other mall-based chains have been similarly affected by the weather and economy, says Liz Dunn , an analyst at Thomas Weisel Partners LLC. In a Monday research note, Dunn said she expects Abercrombie & Fitch Co. (ANF) will post flat October same-store sales, missing analysts' estimate for a 1.2% gain, according to Thomson Financial. However, she says American Eagle Outfitters Inc. (AEO), which has lowered its third-quarter outlook, will likely post a 3% October same-store sales gain, edging past analysts' estimates for a 2.4% increase.

While September and October have been unusually warm, temperatures are expected to be seasonably cool through the remainder of the year, according to Planalytics Inc., a Wayne, Pa., weather consultant. That could bode well for apparel sales in November and December, which had been sluggish a year earlier amid a bout of unusually warm holiday weather. Still, Planalytics Chief Operating Officer Scott Bernhardt notes that blizzards are in the forecast for December. That adds risk to the outlook: If snowstorms hit during weekends, they can stifle mall traffic.

-By James Covert , Dow Jones Newswires; 201-938-5360; james.covert@dowjones.com