* Costco, Cato, Wet Seal miss, Limited beats
* Ex-drugstore chains, same-store sales seen up 2.4 pct
By Phil Wahba
July 5 Costco and other retail chains on
Thursday reported June sales that missed Wall Street's lowered
expectations as persistently high unemployment and falling
consumer confidence took a toll on spending.
Smaller chains like Cato Corp, and teen apparel
chain Wet Seal Inc and The Buckle Inc also
reported sales at stores open at least a year that came in below
Costco Wholesale Corp reported a companywide 3
percent increase in same-store sales, below estimates of a 3.7
percent gain, hurt by unfavorable exchange rates. The warehouse
club operator's U.S. sales also came in below Wall Street views.
"In June, the consumer put on a very cautious hat, they
started pulling back," said Keith Jelinek, director in
AlixPartners' global retail practice. He predicted shoppers
would continue to be careful about splurging on non-essential
items before children head back to school.
Limited Brands Inc was a standout among the first
group of companies to post June sales, reporting a 7 percent
same-store sales gain, led by its Victoria's Secret lingerie
chain. Limited easily beat the estimate of a 2.7 percent gain.
Analysts expected 18 top retail chains to report a modest
2.4 percent in June same-store sales, according to the Thomson
Reuters same-store sales index -- far less than the 7.7 percent
gain a year earlier. The estimate excluded the Walgreen Co
and Rite Aid Corp drugstore chains.
Macy's Inc and TJX Cos Inc also reported early
Thursday. Kohl's Corp and Saks Inc were due to
report later in the day.
A steady stream of weak economic reports, stubbornly high
unemployment and a volatile stock market have weighed on
shoppers. The Thomson Reuters/University of Michigan's consumer
sentiment index tumbled to 73.2 in June from 79.3 in May.
The U.S. manufacturing sector grew in June at its most
sluggish rate in 18 months as the pace of output, hiring and new
orders all slowed, the Markit U.S. Manufacturing Purchasing
Managers Index showed on Monday.
After retailers posted good results earlier in the spring,
several analysts said warm weather may have spurred people to
buy summers clothes earlier, simply shifting sales from later
months like June.
The International Council of Shopping Centers (ICSC) on
Tuesday trimmed its forecast for June same-store sales to a rise
of 1 percent to 1.5 percent from an earlier forecast of 1.5
percent to 2 percent. It cited severe storms in late June that
left millions in the mid-Atlantic without power.
(Reporting By Phil Wahba in New York; editing by Jeffrey