Tax rebate checks boosted spending last month at wholesale clubs and other stores where shoppers go looking for bargains, but many retailers continued to struggle as gasoline prices and layoffs worried consumers.
Sales at stores open a year or more rose 4.3% in June, compared with a gain of 2.4% in the same month last year, according to the International Council of Shopping Centers' tally of 38 chains nationwide. That was the strongest monthly advance in more than a year.
Wal-Mart Stores Inc. posted a 6.4% jump, its biggest in more than two years, while BJ's Wholesale Club Inc. racked up a 16.5% gain, its best in at least seven years.
Department stores, including luxury chains, fared poorly.
Nordstrom Inc. said its same-store sales slid 18.6%, exactly the amount analysts were expecting, as it shifted one of its major promotions from June to May. Citing the challenging "competitive and economic environment," the retailer said it expected second-quarter profit to be "slightly below" its previous projection.
Nordstrom shares fell almost 9% to close at $28.52, down $2.72.
Saks Inc.'s sales rose 1.9% -- far less than the 6.5% analysts were expecting -- as purchases of men's and women's clothing weakened. Neiman Marcus saw a 2.4% drop.
Luxury retailers are suffering "a major comedown" as well-heeled consumers fret about falling home prices, the job market and shriveling stock portfolios, said Scott Hoyt, senior director of consumer economics for Moody's Economy.com.
"Fundamentals are bad for consumers, really, across the economic income spectrum right now," he said.
Some California retailers posted better-than-expected results.
San Francisco-based Gap Inc., struggling parent of the Gap, Old Navy and Banana Republic chains, posted a 7% decline as all of its units lost ground. Analysts were expecting an 11.6% slump.
Wet Seal Inc. in Foothill Ranch, which sells trendy clothes to teenage girls, slipped 2.9%, slightly less than the 3% slide analysts were expecting. Surf and skate apparel seller Pacific Sunwear of California Inc. in Anaheim logged a 3% gain, instead of falling 1.8% as anticipated.
Generally speaking, it was a rough month for apparel sellers, except for those with very low prices.
"Both Wal-Mart and Family Dollar noted strong sales of apparel, and yet apparel specialty stores' results were terrible," Hoyt said. "If people need or want something, they're going to the low-price provider."
Wal-Mart said it posted sales growth in all its merchandise units, adding that flat-screen TV sets saw a "high-double-digit" gain.
Such purchases reflect consumers' desire to entertain themselves at home when they can't afford a vacation, said Jharonne Martis, senior research analyst for Thomson Reuters. "A lot of people have been laid off," she said. "As long as [consumers] don't feel secure about their jobs, they're not going to spend freely."
Some experts say the rebate checks should lift sales through the back-to-school shopping season, which gets underway this month.
Michael Niemira, the shopping center group's chief economist, predicts that July sales will rise 2% to 3% over July 2007. But the future depends on what happens at the pump.
"The outlook is so dependent on where oil prices go," he said.
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Tax rebate checks helped boost overall retail sales 4.3% in June.
U.S. sales last month at stores open a year or more, compared with June 2007:
Pacific Sunwear: +3.0
Hot Topic: -0.3
J.C. Penney: -2.4
Neiman Marcus: -2.4
Wet Seal: -2.9
Limited Brands: -9.0
Sources: Thomson Financial, Times research and International Council of Shopping Centers