June 4 (Bloomberg) -- Target Corp. said sales at stores open at least a year fell 6.1 percent in May, more than analysts’ estimates, after customers made fewer and smaller purchases and cut spending on clothing and home goods.

The sales “were somewhat below our expectations,” Gregg Steinhafel, chairman and chief executive officer at Target, said in a statement today. The Minneapolis-based retailer predicted sales this month would drop by a percentage in the mid single digits.

RetailMetrics LLC, a Swampscott, Massachusetts-based researcher, predicted a 3.7 percent decline for May.

Same-store sales fell by an average of 4.6 percent at 32 U.S. retail chains last month, according to the International Council of Shopping Centers. Retailers including Macy’s Inc., Costco Wholesale Corp. and Saks Inc. reported steeper declines than analysts estimated as rising unemployment spurred consumers to cut spending.

Target fell 2 cents to $40.95 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have advanced 19 percent this year.

Jeffrey Klinefelter, an analyst at Piper Jaffray Cos., said today in a telephone interview that Target’s clothing sales, which the company said fell by a percentage in the “high single digits,” was a “modest improvement” from the declines that ranged in double-digit percentages in recent quarters.

“There certainly are some signs of encouragement,” Klinefelter said.

‘Toughest Years’

Sales of groceries and other basics outpaced clothing and home goods, Target said on a recorded conference call today.

“Target has the advantage over department stores of having commodity products in their stores to drive consistent traffic,” Klinefelter said, who is based in Minneapolis and rates the shares “neutral”.

Target weathered “one of the toughest years in its history” in 2008 and is “encouraged by early signs of improvement,” Steinhafel said at the company’s annual shareholder meeting in Wisconsin last week.

At that meeting, Target prevailed over hedge-fund manager William Ackman in a shareholder vote over the board’s membership. Ackman had nominated himself and four other outside directors to Target’s board. Shareholders instead re-elected Target’s slate of four candidates and capped the board size at 12 rather than the 13 proposed by Ackman.

Two department store chains, J.C. Penney Co. and Kohl’s Corp., posted smaller-than-expected declines last month. Kohl’s cited improved sales in accessories, shoes and home goods and J.C. Penney said women’s clothing was its strongest category.

“It’s clearly possible that Kohl’s and Penney’s may be pulling share from both the traditional department stores and from discounters,” Klinefelter said.

To contact the reporters on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net

Last Updated: June 4, 2009 16:15 EDT