Poor weather in early May and a still-cautious consumer translated into a mixed bag for retailers in May, underscoring the fragile state of the economic recovery.
Based the results from the 28 retailers tracked by Thomson Reuters, sales at stores open at least a year rose 2.5 percent, just shy of the 2.6 percent that Wall Street predicted.
The results were especially disappointing given that estimates had been trending lower ahead of the sales reports as analysts adjusted for comments made by retailers in earnings conference calls and reports on store traffic trends.
Results were particularly weak in the West, which may not bode well for the sector, according to Wall Street Strategies analyst Brian Sozzi.
The "retail recession began in the West, then led the recovery, and now appears to have softened for the second consecutive month depending on the retailer looked upon," Sozzi said.
Several trends impacted results. The month began with some unseasonable weather, and the timing of the Memorial Day calendar shifted some sales into June.
But factors do not explain away all of the lackluster performance.
In its press release, Target CEO Gregg Steinhafel suggested that the trends were consistent with their expectations regarding the economic recovery.
"Our recent experience reinforces our belief that we will continue to experience volatility in the pace of economic recovery," Steinhafel said.
Target said its same-store sales for the month fell short of its own estimates, although the company outpaced average analysts' estimates for the period.
According to Eric Beder, a retail analyst at Brean Murray, Carret, retailers will need to work very hard in June to achieve their targeted earnings for the quarter.
Beder added that investors should focus on retailers that have "strong inventory integrity" because they will be the ones who will be able to successful navigate these choppy waters.
Among the discounters, Costco Wholesale was expected to report the strongest monthly increase, with sales expected to rise 7.3 percent, excluding gas sales, Thomson Reuters said. However, the warehouse club store reported sales rose only 5 percent, excluding gas sales.
Among the department stores, Nordstrom was expected to report the strongest year-over-year same-store sales growth, but its 3.7 percent increase in same-store sales fell short of the 4.8 percent gain Thomson Reuters was predicting.
Retailers of teen apparel should see the weakest sales among the retailers reporting monthly sales. Hot Topic was expected to post the biggest decline in same-store sales with an 8.3 percent drop, but its actual performance proved even worse. Same-store sales fell 9.0 percent.
Although the monthly sales reports will be closely watched for their insights into consumer spending, the reports aren't the gauge they used to be as many retailers, including Wal-Mart Stores , the world's largest retailer no longer report monthly sales results.
To see estimates and results for May's retail sales, see the table below: