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U.S. retailers post strong June sales

*The final splurge before the truth of slowing comes out in full force?...

U.S. retailers post strong June sales
Thursday July 7, 9:04 am ET

CHICAGO (Reuters) - U.S. shoppers snapped up summer clothing and air conditioners in June as a heat wave drove better-than-expected sales, retailers said on Thursday, calming concerns that steep energy prices slowed consumer spending.

Luxury chains continued their strong run while many teen retailers turned in double-digit sales growth. Discount chains, including Wal-Mart Stores Inc. (NYSE:WMT - News), which have been under pressure in recent months as soaring gasoline prices curbed discretionary spending, also showed surprisingly strong gains.

June is typically a month of clearance sales as retailers make room for back-to-school merchandise, but analysts said the strong summer demand meant many retailers kept discounts to a minimum. A few retailers raised quarterly earnings forecasts.

An unusually cool spring had left many stores overloaded with summer clothing and outdoor gear, but temperatures rose across much of the country in June, bolstering demand.

Merrill Lynch said weather-driven demand was up 3 percent for the month, following three consecutive months of falling demand, citing data gathered by its weather consultants, Planalytics.

Wal-Mart, the world's biggest retailer, confirmed that its June sales rose 4.5 percent at U.S. stores open at least a year, topping its forecast for a 2 percent to 4 percent gain. Analysts had expected just 3.7 percent growth, according to estimates compiled by Reuters.

But Wal-Mart also said expenses continued to pressure profits, and the stronger June sales probably would not be enough to push quarterly earnings above Wall Street forecasts.

Wal-Mart forecast a 3 percent to 5 percent increase in July sales at its stores open at least a year, also known as same-store sales. Last year, Wal-Mart's July same-store sales rose 3.2 percent.

Analysts were awaiting results from rival Target Corp. (NYSE:TGT - News), which said last week that its June sales were running ahead of forecasts.

Upscale department store Nordstrom Inc. (NYSE:JWN - News) reported an 8.1 percent jump in its June same-store sales, ahead of forecasts for a 7 percent increase.

Clothing retailer Limited Brands Inc. (NYSE:LTD - News) reported flat June sales at its stores open at least a year, beating analysts' expectations for a decline of 0.9 percent.

American Eagle Outfitters Inc. (NasdaqNM:AEOS - News) and Charming Shoppes Inc. (NasdaqNM:CHRS - News) both said quarterly profits would beat analysts' expectations thanks to strong June sales.


LINK: http://biz.yahoo.com/rb/050707/retail_sales.html?.v=2