Retailers’ sales little changed as luxury, discounters gain

U.S. retailers’ June same-store sales about matched analysts’ estimates, with luxury chains such as Saks Inc. and discounters like TJX Cos. topping expectations and stores targeting middle-income consumers trailing projections.

Same-store sales at the more than 20 companies tracked by Retail Metrics Inc. rose 0.3%, compared with the 1% average estimate of analysts surveyed by the research firm. The results follow a 7.2% increase last year.

Consumers have been spooked by the unemployment rate staying above 8%, sending many to discount chains such as TJX, which posted a 7% sales gain. At the same time, luxury consumers have continued to spend with the stock market still up for the year.

The Standard & Poor’s 500 Retailing Index gained as the broader index declined.

“The high-end consumer has faired particularly well throughout this recovery,” said Ken Perkins, president of Swampscott, Mass.-based Retail Metrics. “On the low end, a lot of middle-income consumers have traded down.”

TJX, which owns discount stores T.J. Maxx and Marshalls, beat analysts’ average estimate for a 3.7% sales increase. The Framingham, Mass.-based company said profit this year may be as much as $2.39 a share, up from a previous forecast for a maximum of $2.37.

Same-store sales at Limited Brands Inc., the parent company of Victoria’s Secret, gained 7%, beating the average estimate of 2.6%. Sales at New York-based Saks rose 6%, topping the 4.2% average estimate.

Sales at Target Corp. rose 2.1%, falling short of the average projection for a 2.8% gain from analysts surveyed by Retail Metrics. Macy’s Inc., the second-biggest U.S. department-store chain, posted a 1.2% increase in same-store sales, missing the 2.3% estimate.

Macy’s said in a statement today that the “stagnant” economy and reduced spending from tourists hurt sales.

“Consumer confidence and other macroeconomic indicators have been falling,” said Keith Jelinek, a director in the retail practice at AlixPartners. “This consumer’s psyche says, ‘I’m not going to spend.’”

Most chains count locations open at least a year to tabulate same-store sales. The revenue is a key indicator of a retailer’s growth because new and closed sites are excluded.

June’s results may be a sign that retailers will have to discount more than expected to draw shoppers for the important back-to-school shopping season, Perkins said.

“They have to have a reason to spend,” Perkins said. “If they are given a reason to spend, they do come out and buy.”