Our outlook is very cautious given the uncertain macroeconomic and political environment

Heidi Kunz

Warehouse-based stores BJ's Wholesale and Costco also had improved sales, as did cut-price clothing groups Ross Stores and TJX.

Gap, meanwhile, reported October sales were 17% down year-on-year, based on a comparison with stores open for at least a year. It has increased its stores by 17% to 4,147 since last year.

Gap said it will review its real estate contracts looking for unsigned deals it can cancel.

Spending snipped

Capital expenditure will be trimmed, to a maximum of $1.2bn (�827m) in 2001 instead of $1.4bn (�965m), and Gap will expand its floor space by 5% instead of 10%.

"Our outlook is very cautious given the uncertain macroeconomic and political environment, and we continue to tightly manage expenses and focus on how we spend our capital," said Gap financial director Heidi Kunz.

"October sales slightly missed our expectations, primarily due to lower-than-expected sales at Old Navy," she said.

Confidence among US consumers has fallen to its lowest level since February 1994, as Americans digest the economic fall-out from last month's terror attacks.

The October consumer confidence index - compiled by the Conference Board, a US research firm - slumped to 85.5 points from 97 points in September.