WRAPUP 3-Most U.S. retailers' May sales miss expectations

* May same-store sales fall more than expected

* Costco, Target, others disappoint, shares fall

* Aeropostale, Buckle sales soar, shares still down

* Wal-Mart no longer issuing monthly sales reports
(Recasts first sentence, adds comments, results from various
retailers, stock moves)

By Jessica Wohl

CHICAGO, June 4 (Reuters) - Most retailers posted
disappointing May sales as recession-weary shoppers cut spending
at stores ranging from high-end chains to discounters like
Target Corp (TGT.N), pushing down retail shares.

While there have been early signs of stabilization such as
improving consumer confidence, issues such as unemployment and
the troubled housing market have led many Americans to take on a
thriftier attitude, spending on food and other everyday
essentials and not much else.

Sales were weaker than expected at 63 percent of the 30
retailers tracked by Thomson Reuters. Upscale chains posted some
of the worst May sales at stores open at least a year, or
same-store sales.

"The high end continues to struggle, those in the
discretionary spend segment are really continuing to get
clocked," said Ken Perkins, president of Retail Metrics.

Wal-Mart Stores Inc (WMT.N), the biggest retailer and one of
the best performers in the recession, no longer issues monthly
sales. The spotlight now shines on smaller competitors such as
Costco and Target, which both missed expectations.

"We felt that the May results would signal that we're not
yet out of this consumer doldrum that we've been in and it's
going to take some wind out of the sails" of retail stocks,
said Susquehanna Financial senior consumer analyst Thomas
Filandro.

Shares of most retailers fell. The S&P Retail Index .RLX
was down 2.5 percent after rising in recent days.

According to data from Thomson Reuters, May same-store sales
fell 4.8 percent compared with May 2008. That was worse than the
4.5 percent decline seen earlier in the year, and analysts had
expected that May sales would fall only 4.1 percent.

Looking ahead, the International Council of Shopping Centers
forecast a 3 to 4 percent drop in June same-store sales, less
than the 4.6 percent decline it saw in May. June's sales face a
tougher comparison to last year as consumers then were spending
the bulk of government stimulus checks, analysts said.

BUYING BASICS

Costco Wholesale Corp's (COST.O) same-store sales fell 7
percent, hurt by the stronger U.S. dollar and lower gasoline
prices, which deflated its fuel sales. [ID:nBNG109510]

Target Corp and BJ's Wholesale (BJ.N) also reported
steeper-than-expected drops in sales, and their shares fell.

Food was one of the best sellers at the wholesale clubs,
while Target's strongest performance came from healthcare,
household, personal and baby care items. Target's sales of
clothing, especially women's apparel, were weak and it expects
June same-store sales to decline at a mid-single-digit rate.

TJX Cos Inc (TJX.N), which has attracted new customers in
the recession with its discounted merchandise, beat sales
expectations and said it remains "very comfortable" with its
second-quarter earnings forecast. [ID:nBw045514a]

Family Dollar Stores Inc (FDO.N) said third-quarter sales
rose 8.2 percent, which missed analysts' expectations despite
strong sales of food. While it indicated earnings may surpass
analysts' average forecast, its shares fell. [ID:nBw045151a]

Purchases of necessities boosted sales at drugstores
Walgreen Co (WAG.N) and Rite Aid Corp (RAD.N), though the gains
were smaller than anticipated. [ID:nN02499090]

BREAK THE CYCLE

The steepest declines came from Abercrombie & Fitch (ANF.N),
whose same-store sales plunged 28 percent and Saks Inc (SKS.N),
which posted a 26.6 percent decline. Abercrombie's shares fell
as much as 11.9 percent.

"If I was a high-end retailer, the thing I'd be worried
about is how to break that cycle once people get in the habit"
of shopping at lower-priced chains, said Stephen Hoch, marketing
professor at the Wharton School of the University of
Pennsylvania and director of the Baker Retailing Initiative.

Sales at Saks, Nordstrom Inc (JWN.N) and Neiman Marcus
[NMRCUS.UL] plunged, showing that luxury department stores
continue to suffer. Declines at Macy's Inc (M.N), Kohl's Corp
(KSS.N) and JC Penney (JCP.N) were not as steep as expected.

In the teen category, double-digit jumps at Aeropostale Inc
(ARO.N) and Buckle Inc (BKE.N) surpassed forecasts. Still, their
shares fell. American Eagle Outfitters Inc (AEO.N) posted
slightly weaker-than-expected sales and stood by its
second-quarter forecast. [ID:nBw045100a]

Gap Inc (GPS.N) reported a larger-than-expected 6 percent
drop, as declines at Gap and Banana Republic offset a gain at
Old Navy that was driven by a one-day $1 sale on flip-flops.

While Wal-Mart did not issue monthly sales data, investors
will watch for any general comments it makes about sales as it
talks to members of the media on Thursday and addresses
shareholders and analysts at meetings on Friday. Earlier on
Thursday it said it would add more than 22,000 jobs this year at
its stores in the United States. [ID:nN03123661]

Shares of Wal-Mart were down less than 1 percent.
(Additional reporting by Martinne Geller in New York, Ben
Klayman, Ian Sherr and Brad Dorfman in Chicago, editing by Dave
Zimmerman and Matthew Lewis)