UPDATE 2-Costco, Gap lead February U.S. retail sales gains
* Costco same-store sales up 6 percent; Gap up 3 percent
* Improving job and real estate markets encourage shoppers
* Gap shares rise 3.5 percent; S&P Retail down 0.3 percent
* Thomson Reuters sales index up 3.9 percent, beating estimates
By Phil Wahba
March 7 (Reuters) - Gap Inc and Costco Wholesale Corp were among several U.S. chains on Thursday to report stronger-than-expected sales for February, when consumer confidence about an improving job market offset the impact of higher taxes.
After a difficult January, when shoppers first felt the effect of a payroll tax hike that lowered take-home pay by 2 percent, some retailers got a little relief last month, underlined by a rise in consumer confidence.
The Thomson Reuters/University of Michigan consumer sentiment index rose to 77.6 in February from 73.8 in January.
"By and large, the middle class is just shaking off the intractability in Washington and feeling better about shopping," said Joel Bines, managing director of consulting firm AlixPartners' retail practice.
Rising real estate values and the stock market have bolstered shoppers' willingness to spend, he added.
Thirteen U.S. retailers reported February sales results this week. Excluding drugstore chains Walgreen Co and Rite Aid Corp, which derive the bulk of their revenues from prescription drugs, sales at stores open at least a year were up 3.9 percent, beating Wall Street forecasts for a 3.3 percent increase.
At the same time, several major retailers, including Target Corp, Macy's Inc, Nordstrom Inc and Kohl's Corp, stopped reporting monthly sales this month, and TJX Cos Inc said it would discontinue the practice after the release of its April results.
With a smaller number of chains reporting, the figures have become a less significant gauge of economic health.
The shrinking sample also means results will be more volatile and harder to forecast, said Michael Niemira, chief economist of the International Council of Shopping Centers. The group forecast same-store sales for the retailers in its index would rise 3 percent to 4 percent in March, helped by an earlier Easter.
FOOD, GAS AND LINGERIE
Warehouse club chain Costco reported a 6 percent increase in sales at stores open at least a year, helped by higher gasoline prices as well as strong sales of fresh food and consumer electronics. Wall Street analysts were expecting a 5.1 percent gain, according to Thomson Reuters.
With a 3 percent rise, Gap continued its streak of besting market expectations, led by increases at its Banana Republic and Old Navy chains. Its shares were up 3.5 percent, the only notable uptick among the retailers reporting sales on Thursday.
The fashion retailer planned to release the numbers in the afternoon, but a spokeswoman said a vendor had accidentally released a recording discussing the results prematurely.
Henry Schwartz, president of options analytics firm Trade Alert, said at least one trader apparently generated a substantial profit with an unusually large options purchase before Gap shares were halted.
Limited Brands' 3 percent rise in same-store sales was also higher than expected. The Victoria's Secret lingerie chain led the gains, suggesting shoppers were still willing to spend on some nonessential items.
TJX, whose Marshalls and T.J. Maxx stores have drawn shoppers looking for designer brands at big discounts, reported a stronger-than-expected 1 percent gain.
Sales would have been higher if not for snowstorms early in the February, the company said.
"Business trends picked up at the very end of the month," TJX Chief Executive Officer Carol Meyrowitz said in a statement.
Ross Stores Inc, a TJX competitor, also said its business improved as February moved on. Delays in tax refunds hurt business earlier in the month, it said.
The Standard & Poor's 500 Retail Index was down 0.3 percent at midday, compared with a 0.2 percent rise at the broader S&P 500.
Despite the uptick in spending, there was weakness last month, particularly at chains that cater to teenage shoppers, who have much less discretionary income.
The Buckle Inc and Zumiez Inc both reported declines in comparable sales for February.
Abercrombie & Fitch and American Eagle Outfitters no longer report monthly sales but have said business will be slow this quarter, which began last month.
Arnold Aronson, a managing director for retail strategies at consulting firm Kurt Salmon, said young shoppers depended on a "trickle-down" from their parents, who remain cautious in their spending.
Hot Topic Inc, another teen retailer, said on Thursday that it had accepted a $600 million takeover bid from private equity firm Sycamore Partners. Sycamore is paying a 30 percent premium over the company's closing stock price on Wednesday.
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