WRAPUP 3-Bargains bolster U.S. same-store sales in May
* TR Same Store Sales index up 3.9 pct vs Wall St view up 3.6 pct
* Limited, Target and TJX beat estimates
* Kohl's, Gap miss
* ICSC sees June same-store sales up 3.5-4 pct
* S&P Retail Index down 0.5 pct; S&P 500 down 0.6 pct
By Phil Wahba
May 31 (Reuters) - Discounts helped U.S. consumers overcome their growing anxiety about the economy in May, leading to stronger-than-expected sales for top retailers.
But analysts warned that economic worries, be they high unemployment at home or the debt crisis in Europe, were still on shoppers' minds.
"The customer is still fragile," said retail strategist Nancy Liu of consulting firm Kurt Salmon. She said she expected store chains to continue to dole out bargains this summer.
Victoria's Secret parent Limited Brands Inc, discounter Target Corp and low-price retailer TJX Cos Inc were among those on Thursday to report sales at stores open at least a year that beat Wall Street forecasts.
The Thomson Reuters Same Store Sales index rose 3.9 percent for May for 18 U.S. chains, beating Wall Street forecasts of a 3.6 percent increase.
But that is slower than the 5.4 percent gain of a year ago. Analysts said Americans would keep seeking out lower prices this summer, given slumping consumer confidence and the absence of any major shopping event until the back-to-school period in two months.
"There has to be something to pull the consumer in off the sidelines," said Joel Bines, managing director of AlixPartners' retail practice.
The Standard & Poor's Retail Index was down 0.5 percent at midday, while the broader S&P 500 stock index fell 0.6 percent.
Retailers also got a boost this month from a later Mother's Day -- it fell on May 13, five days later than last year.
Chains that have struggled recently continued to do so.
Mid-tier department store Kohl's Corp, which has failed to capitalize on rival J.C. Penney Co Inc's problems, reported a worse-than-expected 4.2 percent drop in same-store sales, hurt by a shortage of inventory it said would continue until the back-to-school season, which starts in July.
Kohl's has tried to maintain tighter inventory levels and avoid having to discount unsold merchandise as it had soon after the recession.
Costco Wholesale Corp said its May same-store sales had risen 4 percent, hurt by the strong dollar's impact on overseas sales. Analysts were expecting a 4.3 percent increase.
Meanwhile, a 1 percent decline at Gap Inc's low-price Old Navy chain pulled the whole company's results below expectations.
Gap shares were down 1.6 percent, while Kohl's fell 5.6 percent.
Destinations popular with bargain hunters did well in May.
Target said its comparable sales were up 4.4 percent, and it forecast a low-to-mid-single-digit percentage rise for June.
TJX, owner of the Marshalls and T.J. Maxx chains, said same-store sales were up 8 percent, well above analysts' forecasts. Shares of the company, which sells designer brands at lower prices than department stores, were up 2.3 percent.
The International Council of Shopping Centers expects same-store sales, excluding drugstores, to rise 3.5 percent to 4 percent in June. But Chief Economist Michael Niemira said economic worries would continue to make shoppers cautious.
WORRIES ABOUT ECONOMY
Concern about Europe's debt crisis, slow job creation and a 6.1 percent drop in the S&P 500 weighed on shoppers' spirits in May.
A report on Tuesday from industry group the Conference Board showed consumer confidence had fallen in May to its lowest level since the start of the year, marking the third month of declines and prompting some executives to sound a cautious note about the coming months.
Even the high end is at risk.
Wealthy shoppers shrugged off concerns about the stock market and a slowing of tourism to the United States. May same-store sales at Saks Inc and Nordstrom Inc were higher than expected.
But the luxury segment could take a hit if the stock market continues its current dip or if the euro keeps falling against the U.S. dollar and hurts tourism from Europe.
"If the stock markets were to be hit substantially, then we would be concerned," Saks Chief Executive Officer Steve Sadove told shareholders at the retailer's annual meeting on Wednesday.
Limited same-store sales rose 6 percent. The company's report on Thursday came the day after department store chain Macy's Inc, which has been a big beneficiary from a sharp drop in business at Penney, posted a 4.2 percent increase.
Earlier this month, Penney reported a much worse-than-expected sales decline after it got rid of coupons and most other discounts.
Drugstore chains Walgreen Co and Rite Aid Corp , which are part of the Same Store Sales index, will report May sales next week.