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Sep 3, 2009
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Costco and Limited beat August sales estimates

By
Reuters
Published
Sep 3, 2009

By Brad Dorfman

CHICAGO (Reuters) - U.S. retailers reported August sales that showed some signs that the economic downturn was easing, but a late Labor Day holiday and muted consumer enthusiasm weighed on results in the key back-to-school season.



Consumers still focused on essentials and saving money as they face uncertain job prospects, ravaged retirement savings and lower home prices, a trend that could continue to weigh on retailers in the all-important winter holiday season.

Results from Costco Wholesale Corp, the largest retailer that still reports monthly sales, beat analysts' estimates. It posted only a 2 percent decline in sales at stores open at least a year, rather than the expected 5.7 percent drop analysts expected, according to Thomson Reuters data.

Food and sundries were the best sellers, while consumers continued to hold back on discretionary spending, the retailer said.

Limited Brands Inc same-store sales fell 4 percent, but bested the analysts' average estimate of a 5.9 percent decline.

Walgreen kicked off the results, reporting a mere 1.9 percent same-store sales increase on Wednesday 2 September, missing analysts' estimates, as consumers continued to cut back on general merchandise.

Costco, Walgreen and Target Corp are the three largest retailers that now report monthly sales after industry leader Wal-Mart Stores Inc decided earlier this year to only report them on a quarterly basis.

The absence of Wal-Mart data means the economic view that monthly sales data provides is less complete.

But analysts still watch the reports, not only as a scorecard for individual companies, but also as a barometer of spending by consumers, which accounts for roughly 70 percent of U.S. economic activity.

The sales view is distorted by the shift of the U.S. Labor Day holiday -- which falls on the first Monday in September -- to September 7 in 2009 from September 1 in 2008. That shift means seven more pre-Labor Day selling days, including the entire holiday weekend, will be in the September sales reporting month this year. Last year, the Saturday of Labor Day weekend fell in August.

But some of the impact from the later Labor Day was muted by a shift of some states' sales tax "holidays" into August from July, analysts said.

(Reporting by Brad Dorfman; Editing by Lisa Von Ahn)

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