Target, other key national retailers post big gains

Spurred by Mother's Day and Memorial Day sales, shoppers took to the stores in May, including the cheap-chic retailer Target.

The Minneapolis-based discounter's same-store sales increased 4.4 percent for the four-week period ended May 6, results that solidly beat analysts' estimates.

Analysts tracked by Thomson Reuters expected Target to report a 3.5 percent increase in stores open at least a year, a key measure of a retailer's health. Results also were at the high end of Target's own expectations for the four weeks ended May 26.

Target said its results were fueled by strong sales of food, clothing and health and beauty items.

Other retailers, including department store chain Macy's Inc. and mall stalwart Limited Brands Inc., all posted bigger-than-expected gains from a year ago, an indication that Americans may be loosening their purse strings. This comes in the wake of bright new styles, warm weather and various promotions last month.

But the increased spending still comes in an uncertain economic environment.

"The pent-up demand is continuing to pour out a little," said Ken Perkins, president of Retail Metrics, a research firm. "I wouldn't say it's happening in droves. But consumers are updating their wardrobes."

"Given the good comps some retailers were up against from last May, results were encouraging," said Nancy Liu, a retail strategist at the New York consulting firm Kurt Salmon. But she "remains cautious about the speed of recovery and consumers' willingness to spend broadly. The fragile consumer continues to look for value, which contributed to the better-than-expected performance of the discount/off-price retailers."

In a statement, Target CEO Gregg Steinhafel attributed the discounter's results to "the power of our brand, the resilience of our strategy and the strength of our talented team."

Food sales increased in the low double digits, while apparel and health and beauty items "grew faster than the company average," Target said. However, home items and other hardlines "decreased slightly."

Target said net retail sales for the month were $5 billion, an increase of 5 percent from $4.8 billion for the four weeks ended May 28, 2011.

The average size of each shopper's transaction increased, as did sales in every region of the country, Target said.

Limited Brands, the Ohio-based parent company of Victoria's Secret and Bath & Body Works, said its sales were up 6 percent, which topped the 4.7 percent analysts expected. TJX Companies Inc., which owns discount store T.J. Maxx and Marshalls, said its sales rose 8 percent, easily topping the 5.3 percent analysts had forecast. The Framingham, Mass.-based company said shopper traffic was up significantly.

Costco Wholesale Corp. said revenue at stores open at least a year was up 4 percent. That was shy of the 4.3 percent analysts expected, but lower gas prices and unfavorable currency exchange rates dragged down the number. And Macy's, which runs Bloomingdale's and its namesake department stores, reported its results on Wednesday. The Cincinnati-based company said its revamped offerings pushed up the measurement 4.2 percent, which was higher than the 4 percent Wall Street expected.

The Associated Press contributed to this report. Janet Moore • 612-673-7752