July 12 (Bloomberg) -- June sales at Wal-Mart Stores Inc. and Costco Wholesale Corp. rose more than analysts estimated after consumers increased spending on groceries and electronics.

Macy's Inc., the second-largest U.S. department store chain, said sales at stores open at least a year declined 2.7 percent, more than analysts predicted. J.C. Penney Co. same- store sales fell 1.5 percent, beating analysts' estimates.

Consumers shopped at discount locations such as Wal-Mart and Target Corp., while cutting back on purchases at department stores such as Kohl's Corp. Sales rose at some apparel retailers including Abercrombie & Fitch Co. after the companies lowered prices to clear summer merchandise and make room for back-to- school displays.

``Consumers may be economizing a bit and may be attracted to discounters,'' said David Abella, who helps manage $2.4 billion at Rochdale Investment Management in New York. ``The same shopper may be limiting purchases at middle-market retailers.''

Wal-Mart, the world's biggest retailer, said sales rose 2.4 percent. Its shares gained $1.15 to $48.83 as of 4:02 p.m. in New York Stock Exchange composite trading. Costco added $1.02 to $61.74. J.C. Penney jumped $4.30, or 6 percent, to $75.46 for the biggest advance in 13 months. Macy's lost $1.16 to $39.25.

ICSC Sales

June sales at U.S. retailers rose 2.4 percent, based on results from 50 chains, the International Council of Shopping Centers said today, exceeding its forecast for a gain of as much as 2 percent. It marked the slowest June increase in four years, according to the ICSC.

U.S. retail sales from February to June climbed at about half the pace of 2006 as energy costs rose and home prices dropped. Consumers didn't make as many non-essential purchases this month, said ICSC chief economist Michael Niemira.

The consumer has ``seen a litany of bad news in an economic sense,'' said Eric Beder, an analyst at Brean Murray Carret & Co. in New York. ``It's starting to affect the psyche of the consumer, who normally, is more than happy to spend money.''

U.S. home prices will drop 1.4 percent this year, the National Association of Realtors said yesterday. Gasoline prices have climbed 38 percent since January.

Goldman Sachs Group Inc. said its index of June sales, which tracks about 30 retailers, rose 2.1 percent, exceeding the company's estimate for an increase of 1.4 percent.

Department Stores

Department store sales fell 2.5 percent, while specialty retailers dipped 0.5 percent, according to the ICSC. Wholesale clubs' such as Costco gained 6.3 percent, discounters rose 2.1 percent and teen retailers 2.9 percent, it said.

Forty-seven percent of retailers reported sales that beat estimates, while 51 percent missed, according to Retail Metrics LLC, a research firm based in Swampscott, Massachusetts.

Wal-Mart's sales gain exceeded its forecast for an increase of as much as 2 percent and topped analysts' estimates for an increase of 0.8 percent, Retail Metrics said. Sales of groceries, flat-panel televisions and computers rose, while home goods and apparel were weak, it said. Wal-Mart predicted same- store sales this month will increase 1 percent to 2 percent.

Costco, the largest U.S. warehouse club, said June same- store climbed 6 percent, exceeding the estimate of 5.9 percent. Target, the second-largest U.S. discount chain, said sales gained 3.3 percent, matching estimates. BJ's Wholesale Club Inc., TJX Cos. and Ross Stores Inc. beat analysts' predictions.

Macy's Lowers Forecast

Macy's, formerly Federated Department Stores Inc., lowered its profit forecast for the second quarter. June sales fell more than the estimate for a decline of 1.7 percent.

The drop in sales at J.C. Penney, the third-largest department-store chain, was smaller than the estimate for a 3.1 percent decline. Sales of children's and women's performed well, while furniture and fine jewelry lagged behind, it said.

Kohl's, the fourth-largest U.S. department-store company, said sales fell 4.9 percent, a bigger drop than the 2.3 percent loss analysts predicted, according to Retail Metrics.

``The number one problem is that traffic is down,'' said Richard Hastings, a retail analyst at Smyth-Bernard Sands LLC in Charlotte, North Carolina. ``That created a bigger problem for department stores.''

Back to School

Many retailers discount merchandise in June to clear out excess clothing, leaving shelf space for backpacks and new jeans, dresses and T-shirts for students heading back to school. June results from teen retailers should ``bode well'' heading into the ``very important'' back-to-school selling season, Retail Metrics' Ken Perkins wrote today in a report.

Abercrombie & Fitch, a clothing retailer for teens and college students, said same-store sales gained 2 percent, topping the analysts' predictions. The shares climbed 8.2 percent to $75.08 for the biggest gain in 11 months. Same-store sales at Zumiez Inc., which sells sporting goods apparel to teens, surged 14 percent, sending the shares up 9.7 percent.

Gap Inc., the biggest U.S. clothing retailer, said June sales fell 5 percent, trailing the estimate for a decline of 4.1 percent. Sales also dropped at women's apparel retailers Ann Taylor Stores Corp. and Bebe Stores Inc. Limited Brands Inc., owner of the Victoria's Secret lingerie chain, said same-store sales rose 3 percent, trailing estimates.

Sears Holdings Corp., the biggest U.S. department-store company, doesn't release monthly results. It reported July 10 that second-quarter profit may decline by as much as 46 percent. The company said this week said same-store sales fell 4 percent at Sears locations and 3.9 percent at the company's Kmart chain for the first nine weeks of the second quarter.

Same-store sales are an industry benchmark because they exclude results from new or closed locations.

To contact the reporter on this story: Heather Burke in New York at hburke2@bloomberg.net.

Last Updated: July 12, 2007 16:37 EDT