New York, August 5--Wal-Mart Stores Inc. and other top U.S. retailers on Thursday reported July sales that largely met muted expectations, helped by early back-to-school shopping for computers, clothing and bedding.
Many chain stores, including Wal-Mart, had given cautious forecasts for the month because last year's July sales were inflated by child tax credits, making it more difficult for retailers to show strong year-over-year improvement. Retailers have also warned that steep gasoline prices are likely to curb consumer spending this summer.
With just three months left before the U.S. presidential election, analysts and politicians alike are watching consumer spending closely. Disappointing June retail sales raised concerns about the health of the U.S. economy, but auto sales rebounded in July and analysts expect retailers to show some improvement as well.
Analysts on average expect retailers to show a 3.2 percent increase in July same-store sales, according to research firm Thomson First Call. In June, same-store sales rose just 2.8 percent, missing expectations for a 4.2 percent increase.
Wal-Mart, the world's biggest retailer, reported a 3.2 percent increase in July sales at its stores open at least a year, slightly better than Wall Street had expected, but much of the strength came from its Sam's Club warehouse stores instead of its namesake discount stores, which account for the bulk of its sales and profits.
The retailer said back-to-school sales were off to a good start, with bedding and clothing among the top-selling categories. Warmer July weather in parts of the United States also spurred sales of summer merchandise, which had been weak in June.
July is typically a month of clearance sales to make room for fall merchandise, and early back-to-school shopping. Clothing stores have reported mixed July demand so far, particularly in the notoriously fickle teen-oriented market.
Among earnings surprises were Pier 1 Imports Inc, which warned that second-quarter earnings could be half of what Wall Street had expected after July sales declined 1.3 percent.
The home furnishings retailer said customer response to its July clearance sale was "inconsistent," and it cut prices even further to make room for fall merchandise.
