Retailers' August same-store sales are coming in better than expected in the early going, with companies like Costco Wholesale Corp. (COST), Limited Inc. (LTD) and teen retailer Buckle Inc. (BKE) beating modest expectations on easy year-ago comparisons.

Still, the biggest in the group, like Target Corp. (TGT) and department stores like J.C. Penney Co. (JCP) have not yet been heard from.

Those that have issued figures for the important back-to-school buying month are beating estimates by considerable amounts in many cases.

Costco Wholesale Corp. (COST) posted a 5% rise in same-store sales when a 3.6% gain was expected. The warehouse club did even better when factoring in higher prices at its gas pumps and gains from stronger foreign currencies. On that basis, same-store sales rose 7%, when analysts were looking for 4.2%. The retailer's international operations were up 11%, compared with a 6% rise in the U.S.

Limited Brands Inc. (LTD), which owned Victoria's Secret and Bath & Body Works, posted a 10% rise in same-store sales when a 7.3% gain was projected.

Teen retailers, which were expected to be the most vulnerable to missing projections are so far largely beating them, including Buckle, Hot Topic Inc. (HOTT) and Zumiez Inc. (ZUMZ).

"Things have been so poor in terms of the economy and even the stock market and that really pulled expectations down," said Stephen Hoch, marketing professor at the University of Pennsylvania's Wharton School. "Also, last year was a very bad year, so that makes the numbers look that much better."

In essence, "We're treading water on the retail front, and it was thought that we couldn't even do that," Hoch said.

All told, the 30 retailers tracked by Thomson Reuters are expected to post same-store sales growth of 2.5% for August, after a 2.9% drop last year and a 2.7% rise in July.

While none of the large department stores have been heard from, a couple of regionals have missed numbers, including Stage Stores Inc. (SSI) and Bon-Ton Stores.

Nonetheless, Stage Stores Chief Executive Andy Hall, commented, "While today's macroeconomic environment has created a cautious consumer sentiment, our back-to-school performance met our expectations."

Bon-Ton was more restrained. Vice Chairman Tony Buccina said August sales were impacted by the hottest weather in the retailer's markets since 1995. Reduced levels of summer clearance inventory further challenged sales, Buccina said. "Both of these factors, we believe, suppressed back-to-school sales and early fall demand for apparel."

Bon-Ton's best performing areas were intimate apparel, hard home, shoes, cosmetics and jewelry. Weaker areas were outerwear, juniors, children's, and ladies' and men's sportswear.

The month appears to have started off decently for big retailers, with their comments generally upbeat early on. "Our sales performance is right in-line" with August guidance, Target Corp. (TGT) Chief Financial Officer Douglas Scovanner said on Aug. 18 during a conference call to discuss second quarter results. "The start of back-to-school has been very encouraging," Macy's Chief Financial Officer Karen Hoguet said on Aug. 11.

But a spate of factors led to muted expectations. Shoppers received a spate of poor economic news during the month, weathered extremely hot temperatures that took their minds off of the fall school start, and knew they had an extra week to wait for sales because Labor Day falls in September this year.

-By Karen Talley, Dow Jones Newswires; 212-416-2196; karen.talley@dowjones.com
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