Department store shares fall on weak sales report

Shares of major department-store operators fell in afternoon trading Thursday following a weak May sales report which showed consumers continued to cut back spending amid the tough economy.

Overall, same-store sales for retailers fell 4.6 percent, worse than the 3 percent drop predicted, according to a Goldman Sachs/ICSC tally. Same-store sales, or sales at stores open at least a year, are an important retail performance indicator because they measure sales at existing locations rather than newly opened ones.

Department-store operators were among the hardest hit as shoppers kept their focus on necessities like food and health care products.

Cincinnati-based department-store operator Macy's Inc. said same-store sales slipped 9.1 percent, slightly better than the 9.3 percent drop Wall Street expected. But shares of the company fell 58 cents, or 4.3 percent, to $12.76 by late afternoon trading.

Dillards Inc. saw its same-store sales fall 12 percent, while analysts expected a narrower decline of 8 percent. The disappointing results helped drive shares down 77 cents, or 7.3 percent, to $9.60.

J.C. Penney Co. said its same-store sales decreased 8.2 percent, beating expectations of a 9.6 percent drop. Shares of the Texas-based company fell 95 cents, roughly 3.2 percent, to $29.13.