By Martinne Geller

NEW YORK (Reuters) - Clothing and shoe maker Jones Apparel Group Inc (JNY.N: Quote, Profile, Research) posted lower quarterly profit and cut its 2008 outlook on Wednesday, as U.S. retailers mark down goods and reorder less amid the faltering economy.

But its shares jumped 5 percent after the owner of the Jones New York, Anne Klein and Nine West brands said retail inventory levels were down and that sales trends picked up in April, as consumers were spurred by warmer weather and pent-up demand for spring fashions and colored sandals.

That trend "could bode well for a pickup in the back half ... and enable us to meet the top half of our range," Jones Chief Executive Wesley Card said.

Lazard Capital Markets analyst Todd Slater raised his rating on Jones shares to "buy" from "hold," saying that visibility into the business was increasing and that operating margins should improve in the back half of the year.

Slater cited low inventory levels, improving same-store sales trends, the exit of Jones' low-margin moderate sportswear businesses and the launch of its l.e.i. jeans brand into thousands of Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) locations in July.

Despite an anticipated sales boost from the Wal-Mart deal, which will put l.e.i. jeans into 3,200 Wal-Mart stores to start, Jones cut its full-year earnings outlook to a range of $1.20 to $1.35 per share, down from a prior forecast of $1.25 to $1.50 per share. It forecast revenue of $3.62 billion to $3.78 billion, versus a prior forecast of $3.6 billion to $3.8 billion.

"Since our last forecast, economic conditions have worsened and the slowdown in the economy is much more apparent," said Chief Financial Officer John McClain. "What we saw in the first quarter is the consumer wasn't shopping -- whether it was the impact of the home lending crisis, the high cost of gasoline or the unseasonably cool weather."

As a result, Jones said its retail customers ordered conservatively for the third quarter, and it expects the same for the fourth quarter.