NEW YORK - Sales at U.S. retailers increased less than expected in April as the benefit of tax refunds began running out. A retail shares index had its biggest drop since January.
The Standard & Poor's 500 retailing index, which has 30 members, fell 2.1 percent.
Wal-Mart Stores Inc.'s shares fell $1.28 yesterday to close at $54.58; Sears, Roebuck and Co. lost $1.92 to $38.08; and May Department Stores Co. lost $1.14 to close at $24.70.
Sales at stores open at least a year rose 4.4 percent when compared with April 2003, according to the International Council of Shopping Centers. The gain was the same at Wal-Mart, the world's largest retailer. Retailers' gains slipped from March, when sales rose 7 percent.
April's sales increase was less than the 5 percent gain predicted by the shopping center group, which said the miss was the biggest since November.
April sales also were hurt by Easter occurring earlier than last year, investors said. Rising gasoline and food prices and concerns about increased interest rates also may have caused consumers to trim spending, they said.
"Across the board it was weaker than expected," said Patrick Adams, president of Choice Investment Management, which has shares of Kohl's Corp. and Bed, Bath & Beyond Inc. among its $100 million in assets under management.
Sales may rise about 4.5 percent in May, said Michael P. Niemira, the shopping center group's chief economist. "The story is still good," he said. "It's just not as good."
A drop in mortgage refinancing also may hurt consumer spending, according to a Goldman Sachs research report.
Demand at discount chains such as Wal-Mart was weaker than at merchants that cater to higher-income shoppers, such as Nordstrom Inc. and Saks Inc. Retailers controlled inventory, avoiding profit-eroding discounts as shoppers sought spring sandals and dresses, cropped pants for women and men's stain-resistant pants.
Sales at upscale retailers may have risen as higher-income shoppers benefited from tax cuts. Nordstrom's April sales surged 10 percent, and Neiman Marcus Group Inc.'s sales climbed 14 percent.
Gap Inc., the largest U.S. clothing chain, said its same-store sales rose 3 percent as it introduced summer fashions featuring skirts for women and striped men's shirts. First-quarter net income was as much as 32 cents a share, a nickel more than analysts expected.
Federated Department Stores Inc., the owner of Macy's and Bloomingdale's, said its sales rose 5.4 percent. Sales increased 7.6 percent at Saks, the owner of Saks Fifth Avenue and regional department stores.
Wal-Mart's 3.6 percent gain at its discount stores was the smallest increase since June, but the company's Sam's Club results rose 8.3 percent. Wal-Mart said May sales will rise 4 percent to 6 percent.
Sales at Kohl's declined 4.6 percent, the biggest decline in more than a year.
Target Corp., which owns Mervyn's and Marshall Field's, said its sales rose 4.9 percent, helped by a 6.2 percent gain at Target's discount stores. Mervyn's sales declined 6.6 percent. The No. 2 U.S. discount chain expects its May sales to rise 4 percent to 6 percent.
Sears, Roebuck & Co., the largest U.S. department-store chain, said its April sales fell 1.8 percent. Sales at May Department Stores, which owns Hecht's and Filene's, fell 7.5 percent.