Consumers armed with gift cards and lured by warm weather returned to stores and malls in January, buying clearance and spring merchandise and giving many retailers a better-than-expected sales boost for the month.

As merchants began reporting their January results Thursday, winners included Wal-Mart Stores Inc. (WMT), wholesale club operators such as Costco Wholesale Corp. (COST), teen retailers including Bebe Stores Inc. and Pacific Sunwear of California Inc. and upscale apparel stores like Nordstrom Inc.

"So far, so good," said Ken Perkins, president of Retail Metrics LLC, a research firm in Swampscott, Mass. "I would have to think that the weather really helped. It brought people out to the stores."

Merchants' reports also provided some encouraging news about fourth-quarter profits, as many stores at least backed their earnings forecasts. Federated Department Stores Inc. (FD) raised its earnings outlook as it announced sales in line with analysts' forecasts.

January sales were helped by a number of factors. Business was buoyed by strong gift card redemptions; gift card sales are only reported when they are used. Warmer-than-usual weather throughout most of the Northeast and Midwest also helped boost early spring selling and helped to soften the blow of steep heating costs, Perkins noted. Merchants also benefited from a steadily improving job market, which helped send consumer confidence last month to its highest level in three and a half years.

But analysts expect retailers to face a more challenging environment in the next few months as consumers feel the squeeze of higher heating bills with the arrival of colder weather. A weakening housing market and rising interest rates are also expected to limit spending. What's also alarming is that shoppers may be on the verge of tapping out — a government report issued Monday said Americans' personal saving rate dipped into negative territory in 2005 as consumers are depleting their saving to finance their spending.

"Consumers are going to be more mindful of spending," said Michelle Bogan, a retail strategist at Kurt Salmon Associates. "If I were a retailer, I would be concerned."

Wal-Mart, the world's largest retailer, had a 4.7 percent gain in sales at stores opened at least a year, known as same-store sales. Same-store sales are considered the best indicator of a retailers' health. Wal-Mart's results marked its best performance since May 2004, when it racked up a 5.9 percent gain. Analysts polled by Thomson Financial had expected a 4.4 percent gain for January.

Costco posted a same-stores sales increase of 9 percent, better than the 6.9 percent forecast from Wall Street.

Nordstrom posted a robust same-store sales increase of 6.0 percent; analysts expected a 4.7 percent gain.

J.C. Penney Co. Inc.'s same-store sales at its department store group were up 2.5 percent, better than the 2.0 percent forecast. The company noted that sales were "positive" across all regions of the country and all merchandise divisions. It cited a strong response to spring merchandise.

Federated announced a 1.0 percent increase in same-store sales, in line with the 1.2 percent forecast from Wall Street. The company attributed higher profits in the fourth quarter to a better-than-expected performance at both its Federated division stores and the former May Department Stores Co. divisions acquired last year.

Talbots Inc. had a slim 0.7 percent same-store sales gain, in line with the 0.6 percent forecast. The apparel retailer also backed its fourth-quarter earnings outlook.

Teen retailers again did well. Bebe had a 9.8 percent increase in same-store sales, higher than the 8.1 percent gain Wall Street expected. Pacific Sunwear had a 4.9 percent same-store sales increase, better than the 1.6 percent estimate.

On Wednesday, Limited Brands Inc. said its same-store sales were unchanged, in line with the 0.1 percent gain projected by Wall Street.

American Eagle Outfitters Inc. announced Wednesday an 11.3 percent gain in same-store sales, better than the 7.4 percent estimate.

Hot Topic Inc. struggled with a 0.7 percent decline in same-store sales, though it was better than the 5.9 percent decline that Wall Street expected.