* US stores post 4.9 pct rise in May sales, miss estimates
* Macy's, Costco, BJs, Ross, Saks, Nordstrom top estimates
* Limited, Target, Gap, TJX, Kohl's, Penney miss
* Second half of year to get more difficult -- analysts
* Gap shares down 1.9 pct; Penney off 3 pct; Limited 5 pct
(Adds more comments, stock activity; changes headline)
By Martinne Geller
NEW YORK, June 2 High prices for food and
gasoline, a sluggish economy and picky shoppers going to fewer
stores hurt sales at big U.S. retailers in May and are likely
to weigh on results for the rest of the year.
More than 60 percent of the 24 retailers tracked by Thomson
Reuters missed analysts' estimates, including Victoria's Secret
owner Limited Brands Inc LTD.N, Target Corp (TGT.N), Gap Inc
(GPS.N) and J.C. Penney Co Inc (JCP.N), TJX Cos Inc (TJX.N) and
Kohl's Corp (KSS.N).
"Our guests continue to shop cautiously in light of higher
energy costs and inflationary pressures on their household
budgets," said Target Chief Executive Gregg Steinhafel.
For May, the discount chain posted 2.8 percent rise in
same-store sales, a key gauge of a retailer's health.
That was below analysts' average estimate for a 3.5 percent
gain and at the low end of company expectations. Steinhafel
cited a slowdown in traffic in the back half of the month,
which included the U.S. Memorial Day holiday that unofficially
Overall, sales at stores open at least a year rose 4.9
percent in May, below the 5.4 percent increase that Wall Street
TJX, which runs the off-price TJ Maxx and Marshalls chains,
posted a weaker-than-expected 2 percent gain, citing
unseasonably cold and wet weather.
For a graphic on May same-store sales, see
Gap shares were down 1.9 percent at $18.54 in midday
trading on Thursday, while J.C. Penney fell 2.8 percent to
$33.03 and Limited was down 3.7 percent at $37.27.
The Standard & Poor's Retail Index .RLX was down 1
percent, slightly underperforming the wider S&P 500 index
.SPX, which was down 0.5 percent.
BRIGHT SPOTS AMID UNCERTAINTY
Retailers that beat estimates in May were generally those
with a large array of products, what consumers saw as good
prices, or those that cater to higher-income consumers.
Costco Wholesale Corp (COST.O) and BJ's Wholesale Club Inc
BJ.N joined Macy's Inc (M.N) on Thursday in reporting
higher-than-expected same-store sales. Others that topped
estimates include Ross Stores Inc (ROST.O) and luxury
department stores Saks Inc SKS.N and Nordstrom Inc (JWN.N).
Also on Thursday, data showed new U.S. claims for
unemployment benefits fell last week, but not enough to assuage
fears the labor market recovery has taken a step back.
"I do not think all is well in Consumerland," Wall Street
Strategies analyst Brian Sozzi said, noting results are likely
to worsen in the second half of the year as as manufacturers of
food, clothes and other consumer products push through price
increases meant to offset rising commodity costs. The
International Council of Shopping Centers is expecting
same-store sales to rise 4 percent to 5 percent in June, or 3
percent to 4 percent excluding the impact of gas.
Michael Niemira, the group's chief economist, said trends
moving into the second half of the year were "far more
negative" and consumer spending could be hurt further in 2012
when this year's payroll tax reduction disappears and if
interest rates rise.
"We have seen a little slowing in the economy. That is sort
of rippling through various numbers," Niemira said. "I worry
that, as you look beyond the end of this year into early next
year, the factors will increasingly become more difficult for
For investors, that translates to uncertainty about the
direction of both consumer spending and retailers' profit
margins, given rising sourcing costs and consumers' preference
for discounts, said Walter Stackow, an analyst at Manning &
Napier Advisors, which invests in the retail sector.
"Selectivity is going to be even more key than before
because you don't have that backdrop of broadly increasing
spending," Stackow said. "But there are select opportunities
where the scope for market share gains is significant and to
translate that market share gain to profitability."
Nordstrom, Chico's FAS Inc (CHS.N) and Dick's Sporting
Goods Inc (DKS.N) are among the retailers that stick out,
(Additional reporting by Phil Wahba, Helen Chernikoff and
Dhanya Skariachan in New York; editing by Andre Grenon, Brad
Dorfman and Lisa Von Ahn)