WRAPUP 5-August good for US retailers, 3rd quarter looks bright

* Nordstrom same-store sales up 21 percent
* Wet Seal, Zumiez only retailers to miss estimates
* Women and home categories to get a boost-IBM

By Nivedita Bhattacharjee
Aug 30 (Reuters) - Nearly all U.S. retailers posted
better-than-expected sales gains in August at stores open at
least a year as parents and students wrapped up back-to-school
purchases, setting the stage for a strong third quarter.
August same-store sales rose 3.6 percent at retailers
tracked by Thomson Reuters I/B/E/S, trumping forecasts for a 2
percent rise.

"Back to school generates so much sales in the first month
of the retailers' third quarter, it has to have a big impact,"
said Mark Larson, head of retail at accounting firm KPMG.
Back-to-school is the second-biggest selling season for
retailers in the United States after the winter holidays.
However, a strong back to school showing still does not
guarantee a strong holiday season, Larson said.
"There is still too much uncertainty around consumer
spending to make a declaration that (the) holiday season would
be good," he said, adding that factors like unemployment,
droughts, higher gas prices due to hurricane Isaac, can put a
crimp on consumer spending.
Retailers are still dealing with a somewhat difficult
climate. Earlier this week the U.S. Commerce Department said
consumer spending in the second quarter was revised up a notch
but was still below the first quarter's pace. Consumer spending
accounts for about 70 percent of U.S. economic activity.

Shopping is being driven by events, such as the start of the
school season or various holidays, said Michael Niemira, chief
economist of the International Council of Shopping Centers.
"I don't think we would sustain this type of pace or
anything near it. I would suspect you would see a lot of
slowing," he said.
The ICSC sees September same-store sales rising 3 to 4
percent, excluding drugstores.
IBM's chief retail expert Jill Puleri said with the event
driven shopping as kids leave for school and college, IBM
expects sales of home and women's categories to go up over 8
percent during the quarter.

SALES TRUMP EXPECTATIONS
The August sales trend will give retailers confidence about
the consumer mindset going into the holidays, said Joel Bines,
managing director of AlixPartners' retail practice.
"They will be cautious and have planned promotions but can
have more confidence about not needing unplanned promotions," he
said.
Gap's 9 percent rise in same-store sales topped analysts'
forecast for a 5.4 percent increase. The results were driven by
strong back-to-school sales, particularly at its Old Navy chain,
where North American same-store sales jumped 12 percent.
Same-store sales are an important measure of retailer
performance because they strip out the effects of store openings
and closings. Gap's shares rose 3 percent to hit their highest
in a year.
The broader S&P Retail Index was down 0.5 percent,
hurt by shares of Sears Holdings Corp, which plummeted
almost 8 percent on Thursday on news that the U.S. retailer will
be replaced by chemical maker LyondellBasell Industries NV
on the S&P 500 index
Teen retailers Wet Seal Inc and Zumiez Inc
were the only companies to miss sales estimates
.
A strong August at TJX Cos Inc has the off-price
retailer now expecting third-quarter earnings per share near the
high end of its estimated range of 56 cents to 59 cents.
Nordstrom Inc got a big boost from the timing of its
Anniversary Sale. Eight days of the sale, which offered
discounts on fall merchandise, fell in August this year versus
just one day in August of 2011. Same-store sales rose 21
percent, blowing past analysts' expectations for an 11.1 percent
rise.
At Target Corp, sales were stronger in the second
half of the month as shoppers responded to "compelling value for
their back-to-school and back-to-college shopping," said
Chairman and Chief Executive Gregg Steinhafel. Same-store sales
were strongest in food, followed by health and beauty products.