Top U.S. retailers are on pace to report better-than-expected sales gains for June after bargains lured shoppers contending with high gasoline prices and a wobbly economy.
The first set of results, including a 14 percent gain in sales at stores open at least a year at Costco Wholesale Corp, suggested that retailers generally rang up sales well above Wall Street estimates.
Analysts expected the 25 chains in Thomson Reuters monthly sales tally to post a 4.9 percent increase in June same-store sales, compared with a 3.1 percent increase a year earlier.
The first seven companies that posted June sales for which Wall Street had estimates, including drugstore Walgreen Co and teen retailer Hot Topic, beat forecasts.
Victoria's Secret parent Limited Brands Inc easily exceeded a 3.8 percent forecast with a 12 percent jump.
Yet consumers remained under pressure last month from high food and gasoline prices. Retailers found themselves offering deals to get them to shop, which could pressure quarterly margins.
"You have to incentivize them (customers) with value," said Al Sambar, a partner at retail strategy firm Kurt Salmon. "You're now seeing a reluctance to spend."
Consumer confidence took a hit in June as shoppers fretted about high unemployment, prompting many to open their purses and wallets only tentatively.
"The economy has changed (my shopping habits) big-time," said Karen Anderson, a 41-year-old stay-at-home mother from Frankfort, Illinois. "I definitely wait for sales."
Retailers such as Target Corp, J.C. Penney Co, Gap Inc and Saks Inc will report later on Thursday morning.
Easing gas prices, strong Father's Day sales and warm weather that accelerated purchases of summer clothing probably helped overall results, Retail Metrics said on Wednesday.
Discount chains, especially those that sell gasoline at lower prices, are likely to show the biggest sales gains.
Excluding gasoline sales, Costco's same-store sales rose 8 percent. Analysts expect BJ's Wholesale Club Inc to post a 7 percent gain, and only 3.1 without gas sales.
At the other end of the price spectrum, Wall Street expects Saks and Nordstrom Inc to show strong June numbers. According to MasterCard Advisors SpendingPulse, luxury spending rose 8.2 percent last month.
(Additional reporting by Jessica Wohl and Eunju Lie in Chicago; Editing by Lisa Von Ahn)
