Major discount retailers in the U.S. posted better-than-expected results for June on Thursday morning as consumers searched for bargains amid weakening economic conditions. Specialty retailers, however, saw weaker numbers.
Meanwhile, the prospect for back-to-school season, usually the second-biggest shopping period of the year, appears bleak for stores other than large discounters, according to Street analysts.
Tantalizing promotional offers from stores, federal rebate checks and a welcome summer after a cool May helped drive up same-store sales, amid soaring food and oil prices.
Nonetheless, consumers were generally more prudent about what they spend money on, restricting it to groceries and essentials such as gasoline, rather than splurging on clothes or furniture.
Discounters and wholesale club operators including Wal-Mart Stores (WMT), BJ's Wholesale Club (BJ), Target (TGT) and Costco Wholesale (COST) reported better-than-expected figures as shoppers searched for deals in an attempt to save money.
Wal-Mart reported an 11.5% increase in net sales for the month of June. The monthly comparable store sales in the U.S. grew 5.8% without fuel, and 6.4% with fuel. This was over twice the growth recorded in the same period last year. Looking ahead, the company raised its earnings outlook for the second quarter citing improved sales results in the period.
Costco also announced an increase in its same store sales for June. Total company comparable sales for the month grew 9%, with a 9% increase in the U.S. division. The company noted that the U.S. comparable sales figure included the effect of gasoline price inflation, with the average price per gallon of gasoline up 38% for the five-week month of June, as compared to the same month a year earlier. The international division saw 11% growth in the month. Net sales for June climbed 12% from the same period last year to $7.14 billion.
Target reported a 0.4% increase in comparable store sales for June. Net retail sales for the period increased 6.6% to $5.84 billion. Kohl's, a family-focused specialty department store, reported 2.3% growth in same store sales for June.
BJ's reported same-store sales soaring above 14.5%, beating analysts' estimates of 10.9%, as sales of both merchandise and gasoline rose sharply.
Nevertheless, for some retailers, stimulus checks and sunny skies were not enough to boost sales.
Specialty retailer Gap Inc.(GPS), reported a 7% slump in its comparable store sales for the month of June, impacted by negative results in all of its divisions. Net sales for the month were down 2%.
Fellow retailer, Limited Brands Inc. (LTD), also reported a 9% decline in the comparable store sales for the month of June. Net sales also declined to $1.022 billion from $1.205 billion in the prior year period.
Mall-based specialty retailer Zumiez Inc.(ZUMZ) Wednesday reported a 3.4% decrease in comparable sales, down from an increase of 13.7% in the prior-year month. Nordstrom Inc. (JWN), the luxury fashion retailer, reported an 18.6% decline in same-store sales as it shifted mid year sales guidance forward a month.
The Reuters/University of Michigan preliminary index of consumer sentiment for the month of June revealed that consumer confidence has dropped to the lowest level in 28 years, to 56.4 in June from 59.8 in May. As the rebate spending wanes, expectations are that consumer spending will slowdown even further.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.