Sales bounce back

Wal-Mart Stores Inc., Macy's Inc. and retailers catering to teenagers reported August sales that topped analysts' estimates on purchases of clothing and electronics for the new school year.

Wal-Mart, the world's largest company by revenue, said U.S. sales at stores open at least a year increased 3.1 percent, after forecasting a gain of 1 percent to 2 percent. The chain slashed prices on 16,000 back-to-school items such as notebooks and staplers after customers cut back on visits.

Retailers such as Abercrombie & Fitch Co. benefited from back-to-school shopping, the industry's second-biggest sales period after the December holidays. Consumers, concerned about lower home values and higher borrowing costs, limited spending on non-necessities and hunted for discounts.

"Back to school is gaining characteristics of Christmas, when people wait for the last minute, looking for discounts," said Eric

Beder, a retail analyst at Brean Murray Carret & Co. in New York.

August U.S. retail sales advanced 2.9 percent based on results from 47 retailers, the International Council of Shopping Centers said. Results exceeded the New York-based trade group's forecast for a gain of as much as 2.5 percent. From February through August, same-store sales have risen 2.4 percent, slower than the 2.9 percent in 2006.

'Sluggish' spending

"The question is whether this is a one-time improvement or a sign of better sales for the rest of the year," said ICSC Chief Economist Michael Niemira. "It's more of a continuation of the underlying trend of sluggish consumer spending."

Separately, the Institute for Supply Management said its index of non-manufacturing businesses, including banks, builders and retailers, grew more than forecast in August, confirming the Federal Reserve's view that the impact of the credit-market rout is 'limited" outside of housing.

Almost two-thirds of retailers beat sales expectations, according to Retail Metrics Inc., a research firm based in Swampscott, Massachusetts.

Target, the second-largest U.S. discount chain, said comparable-store sales climbed 6.1 percent. Analysts estimated 5 percent.

Macy's

Macy's, the second-largest U.S. department store chain, reported a 2.4 percent gain, beating the estimate for unchanged sales.

J.C. Penney Penny

J.C. Penney, the third-largest chain, said yesterday comparable-store sales dipped 4 percent, a smaller drop than analysts estimated.

Gap Inc.

Gap Inc., the largest U.S. clothing retailer, reported a drop of 1 percent, beating the analyst estimate for a decline of 1.9 percent. Limited Brands Inc., owner of the Victoria's Secret lingerie chain, rose 1 percent.

Costco

Costco Wholesale Corp., the largest U.S. warehouse retail chain, yesterday reported an August same-store sales gain of 2 percent, less than the 5.3 percent average analyst estimate.