Top U.S. retailers are on pace to report better-than-expected sales gains for June after bargains lured shoppers contending with a wobbly economy.
The first set of results, including a 14 percent gain in sales at stores open at least a year at Costco Wholesale Corp
Analysts expected the 25 chains in Thomson Reuters' monthly sales tally to post a 4.9 percent rise in June same-store sales, compared with a year-earlier increase of 3.1 percent.
Yet consumers remained under pressure last month from high food and gasoline prices, and leading retailers found themselves offering deals to get them to shop, which could pressure quarterly margins.
Stores will probably have to keep offering discounts as they kick off the important back-to-school season.
While consumers showed a willingness to spend, July is where consumers can pull back and think about where they can get bargains, said David Bassuk, a managing director at consulting firm AlixPartners.
The first 10 companies that posted June sales for which Wall Street had estimates, including drugstore Walgreen Co
Limited Brands Inc
Retailers such as Target Corp
Consumer confidence took a hit in June as shoppers fretted about high unemployment, prompting many to open their purses and wallets only tentatively.
The economy has changed (my shopping habits) big-time, said Karen Anderson, a 41-year-old stay-at-home mother from Frankfort, Illinois. I definitely wait for sales.
Easing gas prices, strong Father's Day sales and warm weather that accelerated purchases of summer clothing probably helped overall results, Retail Metrics said on Wednesday.
Discount chains, especially those that sell gasoline at lower prices, are likely to show the biggest sales gains.
Excluding gasoline sales, Costco's same-store sales rose 8 percent. Analysts expect BJ's Wholesale Club Inc
At the other end of the price spectrum, Wall Street expects Saks and Nordstrom Inc
(Additional reporting by Jessica Wohl and Eunju Lie in Chicago; Editing by Lisa Von Ahn)