• by Sarah Mahoney  @mahoney_sarah, June 4, 2009

So much for finding bottom: While most forecasters had predicted that retail sales would fall again in May, results came in worse than expected.

Excluding Wal-Mart Stores -- which recently decided to stop reporting its monthly results -- sales fell 4.2%, reports Retail Forward, a Columbus, Ohio-based consulting company, which tracks about 35 or so of the largest chains. That's considerably worse than the 2.3% decline in April, and the 1.9% gain in May of 2008. (Last May, sales got a bounce as consumers began to spend some of those $50 billion in government stimulus checks.)

The International Council of Shopping Centers (ICSC), which tracks a slightly different group in its index, says U.S. chain-store sales dropped 4.6%, primarily due to tough year-over-year comparison from last May.

Luxury retailers again suffered some of the steepest declines, with sales sinking 26.6% at Saks, 23.3% at Neiman Marcus, and 13.1% at Nordstrom. But mainstream department stores also had disappointing results: Sales slipped 12.1% at Bon-Ton, 12% at Dillard's, 9.1% at Macy's and 8.2% at J.C. Penney. The best performance among department stores came from Kohl's, where sales eased just 0.4%.

Once again, teen retailer Abercrombie & Fitch was among the biggest losers, with comparable-store sales falling 28%, but many of its competitors also struggled. Sales dropped 20.7% at Zumiez, 8.4% at Wet Seal, 7% at American Eagle Outfitters, and 6.4% at Hot Topic. Still, teens are spending plenty in some places. The Buckle, the Nebraska-based denim chain that manages to gain sales month after month, didn't disappoint -- with comparable-store sales jumping 13.4%. And at Aeropostale, sales surged 19%.

Discounters were also in the doldrums, with Target's comparable-store sales coming in at 6.1%, below its expectations. And even warehouse clubs had a crummy month -- sales declined 7% at Costco, and 6.8% at BJ's Wholesale Club.

Specialty retailers were not spared, either. Same-store sales came in 9% lower at the Children's Place, 7% at Limited Brands, which owns Victoria's Secret, and 6% at the Gap.

Experts do see promising signs of increased spending ahead. "Shoppers are showing signs of moderating their frugality of recent months," reports Retail Forward, which also conducts ShopperScape, an ongoing consumer sentiment survey. "If shoppers can sustain this positive momentum, then it should bear fruit for retail sales by the end of the year, if not the coming months."

ICSC is forecasting that the decline in June's comparable-store sales will be somewhat better than in May, in the 3% to 4% range.