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WRAPUP 4-US same-store sales up in May, but shoppers careful
May 31, 2012 / 8:10 PM / in 5 years

WRAPUP 4-US same-store sales up in May, but shoppers careful

* Same Store Sales index up 3.9 pct vs Wall St view up 3.6
    * Limited, Target and TJX beat estimates
    * Kohl's, Gap miss, shares slip
    * 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) - Low prices and good deals helped wary
U.S. consumers overcome their growing anxiety about the economy
in May, leading to stronger-than-expected sales for top
    Chains that cater to bargain hunters such as discounter
Target Corp and low-priced chains TJX Cos Inc 
and Ross Stores Inc were among the big winners in May,
with sales at stores open at least year that beat Wall Street
    Another winner, Macy's Inc, continued to hold sales
events and thereby lure shoppers away from rival J.C. Penney Co
Inc, which did away with most discounting in February
and has seen same-store sales fall sharply since.	
    Retailers have not had to resort to desperate price slashing
as they did at the height of the 2008 financial panic. But
shoppers have been swift to punish retailers, like Penney, that
pulled back on coupons and discounts. 	
    "They absolutely have to keep up the promotional pace. They
don't have to go overboard but it drives traffic and that's what
they have to do," said Ken Perkins, analyst with Retail Metrics.
"Penney paid a price." 	
    Mid-tier department store Kohl's Corp also lost many
shoppers during the holidays after it lowered discounts on many
    Kohl's has failed to capitalize on Penney's problems and
reported a worse-than-expected 4.2 percent drop in same-store
sales. It compounded its problems by a lack of inventory that
deprived it of sales. Kohl's said that would continue until the
start of the back-to-school period in late July.	
    Kohl's has tried to maintain tighter inventory levels and
avoid having to discount unsold merchandise.	
    Kohl's shares closed 6.14 percent lower.	
    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 rise but lower than the 5.4 percent gain a year ago.	
    Still, retailers got a boost from a later Mother's Day -- it
fell on May 13, five days later than last year, when some sales
got pulled into April -- and from lower gas prices. A later
Mother's Day pulls more sales into May and away from April.	
    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.	
    The Standard & Poor's Retail Index closed down 0.37
percent, while the broader S&P 500 stock index fell 0.23
    Analysts said Americans would still seek out low prices this
summer, given slumping consumer confidence amid worries about
the job market and Europe's debt crisis, and the absence of a
major shopping event until the back-to-school period. 	
    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
    Wealthy shoppers shrugged off concerns about the stock
market: May same-store sales at Saks Inc and Nordstrom
Inc were higher than expected.	
    But even the luxury segment is vulnerable 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.	
    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 2.8 percent.	
    Victoria's Secret parent Limited Brands Inc 
same-store sales rose 6 percent.	
    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 despite strong gains at its namesake and
Banana Republic chains. Gap shares ended 0.64 percent lower.	
    Drugstore chains Walgreen Co and Rite Aid Corp
 report May sales next week.

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