May 8 (Bloomberg) -- Wal-Mart Stores Inc. and Costco Wholesale Corp. reported April sales that rose more than analysts estimated as U.S. consumers, contending with gasoline at a record $3.65 a gallon, sought discounts on clothing and food.

Wal-Mart, the world's largest retailer, said sales at stores open at least a year climbed 3.2 percent, beating its forecast and sending the shares higher. Industry sales climbed 3.6 percent, the most since March 2007, the International Council of Shopping Centers said.

Consumers facing four consecutive months of job losses headed for Wal-Mart and Costco instead of malls, hurting sales at Gap Inc. Saks Inc. sold clothes for as much as 40 percent off to draw shoppers. As customer expenses rise, stores may need to keep up promotions, said Britt Beemer, founder of America's Research Group.

``If you didn't have a sale, you didn't have customers,'' Beemer said in a telephone interview. ``Consumers are having a hard time dealing with inflation in both food and fuel.''

Target Corp., the second-largest U.S. discount retailer, said same-store sales rose 3.1 percent, missing analysts' estimates. The company said sales were ``slightly below'' its plans.

Sales at Costco and TJX Cos., the owner of the Marshalls chain, both advanced 8 percent. Department stores Nordstrom Inc. and J.C. Penney Co. posted declines.

Shares Rise

Wal-Mart climbed 33 cents to $57.16 at 4 p.m. in New York Stock Exchange composite trading. The retailer has increased 20 percent this year, the biggest gain in the Dow Jones Industrial Average. Costco dropped 88 cents to $71.20. The 30-member Standard & Poor's 500 Retailing Index fell 1.9 percent.

Same-store sales figures are derived from 35 chains and don't include sales of gasoline, the New York-based ICSC said. April growth exceeded the group's estimate of a gain of as much as 2 percent. Sales have climbed 1.7 percent from February through April.

Cooler weather in March and an earlier Easter holiday may have shifted some demand for spring clothes forward, said Michael Niemira, ICSC's chief economist. April also had one more shopping day than in 2007.

``The biggest part of the beat was cosmetic,'' Niemira said today in an interview. ``The economic headwinds continue to be an underlying drag on the trend pace of demand.''

Same-Store Sales

Fifty-five percent of retailers exceeded the estimates compiled by Retail Metrics LLC. Same-store sales are considered the best measure of a retailer's performance because they exclude locations that have recently opened or closed.

Wal-Mart, based in Bentonville, Arkansas, had forecast an increase of as much as 3 percent. Analysts, on average, estimated a 2 percent gain, according to Retail Metrics, a Swampscott, Massachusetts-based consulting firm.

Wal-Mart, which slashed prices as much as 30 percent in January, said customers are spending less before their paychecks arrive at the end of the month, signaling the economy is getting ``tougher.''

Consumers cut back on purchases of home goods and clothes they don't need as housing values declined in most of the U.S. Sara Lee Corp. and Kellogg Co. have boosted coffee and cereal prices as commodity costs surge.

Tax Rebates

President George W. Bush enacted a $168 billion economic growth plan, about $117 billion of which was in the form of rebates to taxpayers, in an attempt to avoid a recession. The payments started being sent electronically last week. Wal-Mart is cashing the checks for free and reducing shampoo, cereal and luncheon meat prices to compete with incentives by grocers.

``The rebates are only apt to trickle down to a select few retailers, such as off-pricers and value-oriented players, and even there it may not be much,'' John Morris, a retail analyst at Wachovia Corp., wrote today in a research note.

Investors have boosted shares of Wal-Mart and Big Lots Inc. as shoppers head to discount retailers. Even with signs that the economy is moving closer to a recession, retail stocks and shares of companies tied to discretionary spending are outpacing the broader U.S. stock market.

The S&P 500 Retailing Index has dropped 3.6 percent this year, while S&P's Consumer Discretionary Index has declined 1.7 percent. The S&P 500 has decreased 4.8 percent.

$4 Gasoline

``I've never seen numbers like this,'' said Beemer, who believes the U.S. has been in a recession since October. ``The numbers of consumers a day who are literally putting everything on hold right now and slowing down is incredible. Even as bad as it now, it's going to much worse when gas prices hit $4.''

Sales at 38 chains tracked by the ICSC in March totaled $70.4 billion, Niemira said, about 18 percent of the consumer spending recorded that month by the U.S. Commerce Department.

Consumer spending accounts for more than two-thirds of the U.S. economy.

``What we're seeing is a big shift from discretionary spending, eating out, those types of activities,'' Sarah Henry, an analyst with MFC Global Investment Management in Berwyn, Pennsylvania, said in a Bloomberg Television interview. MFC has $240 billion under management, including Wal-Mart shares.

Gap, the largest U.S. clothing retailer, said same-store sales dropped 6 percent. Limited Brands, owner of the Victoria's Secret chain, fell 5 percent.

BJ's Wholesale

BJ's Wholesale Club Inc., the third-largest U.S. warehouse club, and discounter Fred's Inc. both reported sales gains that beat analysts' estimates. TJX and Ross Stores Inc., which sell designer clothes at reduced prices, also exceeded projections.

Teen retailers' sales gained 6.4 percent, the ICSC said. Aeropostale Inc., which sells $10 polo shirts and $20 jeans, said sales surged 25 percent and increased its forecast. Abercrombie & Fitch Co. and American Eagle also increased.

Saks said its sales jumped 24 percent, helped by the acceleration of a spring-season clearance sale into April from May a year earlier. The promotions may hurt first-quarter profit, Saks said. Luxury retailer Neiman Marcus Group Inc. reported a 1.9 percent decline in sales.

``Retailers are marking down inventories, they are trying to get traffic into the store,'' said Sherif Mityas, a partner at A.T. Kearney Inc. in New York. ``While they are getting higher sales, they are going to be impacted on earnings.''

The U.S. has shed jobs every month this year through April. The losses and higher food and energy costs are boosting consumer concerns, with the Conference Board's confidence index for April falling to 62.3, a five-year low.

Sears Holdings Corp. and Macy's Inc., the two biggest U.S. department-store chains, don't report monthly same-store sales.

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

Last Updated: May 8, 2008 16:58 EDT