PREVIEW-U.S. May retail sales seen up, spending erratic

* What: May same-store sales seen up 3.8 pct – analysts

* When: Top retailers report June 2-3

* Cooler weather hurt demand in parts of country

* Later Memorial Day weekend delays sales to June month

* Shoppers still being cautious during off-peak periods

By Ben Klayman

DETROIT, May 31 (BestGrowthStock) – U.S. retailers are expected to
show a sizable increase in sales for the month of May, but
erratic trends of consumer spending could grow more pronounced
over a seasonally weaker period for shopping.

Retail chains from Target Corp (TGT.N: ) to Costco Wholesale
Corp (COST.O: ) to teen retailer Abercrombie & Fitch Co (ANF.N: )
are scheduled to report sales at stores open at least a year —
an industry gauge also known as same-store sales — on
Wednesday and Thursday.

Analysts expect May same-store sales to be up 3.8 percent,
compared with a decline of 4.8 percent last year, according to
Thomson Reuters data. Standard & Poor’s sees a 3.4 percent
increase, or 2.5 percent excluding gasoline sales.

That would follow a lackluster 0.5 percent increase in
April, when almost 70 percent of the 28 retailers tracked by
Thomson Reuters fell short of expectations. An early Easter had
prompted many consumers to shift spring shopping to March.

So far this year, U.S. consumers have shown they are
willing to open their wallets again for nice-to-have goods like
clothes and furniture after focusing on the basics during the
recession.

But shoppers are still very selective about where and when
they spend as overall consumer sentiment has remained roughly
unchanged from February. [ID:nN28181156]

“Overall, we’re still going to see improvements for all of
retail, but the volatility just shows we’re not out of the
woods yet,” said Linda Tsai, specialty retail apparel senior
analyst for research and trading firm MKM Partners.

“I don’t think it signals doom, but right now it’s just a
little bit slower,” she added. “We’re still seeing dips during
non-peak periods.”

S&P apparel retail analyst Marie Driscoll agreed consumers
remain wary while the economy posts a tentative recovery.

“It looks like the economy is improving in fits and
starts,” Driscoll said. “A real thing that could derail
consumer spending is too much volatility in the stock market.
Other than that, it seems to be leveling out and increasing
modestly.”

The International Council of Shopping Centers cut its May
sales outlook recently, citing slower traffic and less spending
at discounters and apparel retailers as well as colder weather
during the month. It now expects same-store sales to rise 2
percent to 2.5 percent, down from a prior forecast of 3.5
percent.

COOLER WEATHER HURT

Driving the expected sales gain in May will be discount
retailers like Target and Costco, which are expected to report
an increase of 6.3 percent, according to Thomson Reuters. Gains
for department stores and apparel chains are forecast at 1.5
percent and 1.8 percent, respectively.

However, teen retailers, including American Eagle
Outfitters Inc (AEO.N: ) and Hot Topic Inc (HOTT.O: ), are expected
to post a decline in same-store sales of 0.2 percent, Thomson
Reuters said.

Major factors that influenced shopping in May include a
Memorial Day holiday that falls on the last weekend of the
month, pushing more sales into June and suggesting a low- to
mid-single-digit drag on May, analysts said.

In addition, cooler weather everywhere but the Northeast,
as well as heavier rain in the Northwest, hurt sales of summer
apparel, analysts said.

“There’s a lot of bodies in the Northeast. Is that enough
to carry the rest of the nation?” said Scott Bernhardt, chief
operating officer for Planalytics, which provides weather data
for businesses. He said Texas also saw pretty good weather.

Regardless of what happens in May, June looks like a hit in
the making with the holiday shopping and with “glorious”
weather expected everywhere but the Southeast, Bernhardt said.

“June is going to be off the charts good for most of North
America,” he said. “It will feel like summer. People will spend
like summer. It’s a very good thing for the economy.”

Stock Market Investing

(Editing by Michele Gershberg, editing by Gerald E.
McCormick)

PREVIEW-U.S. May retail sales seen up, spending erratic