NEW YORK (
) -- Don't go screaming Armageddon just yet.
, unexpectedly falling 1.2% in May, but this doesn't necessarily signal a double-dip in the economy, analysts say.
"We always take this report with a grain of salt since it generally is a week behind retail same-store sales reports, giving us a pretty good leading indicator as to the relative strength of this data point," Janney Capital Markets analyst David Strasser wrote in a note. "The market still tends to fixate on it, however, as if the comparable sales day never happened."
The core number, which excludes autos, building materials and gasoline receipts, was nearly flat. "Given all the comments from retail management, the guidance and what we are seeing in the malls, this number could have been worse within the core," Wall Street Strategies analyst Brian Sozzi said. "Also, the flat core number was up against a strong 4.98% increase a year ago, which in a way makes it look better."
Total sales, which missed the consensus forecast of a 0.2% increase, were dragged down the most by autos and building materials.
Year-over-year numbers also continue to show promise, with sales up 6.9% for the period.
"I am not so shocked," Kevin Regan of FTI Consulting said. "This is still not a sign we are in serious trouble.
Chairman Ben Bernanke already said this is a fragile economy. We already knew sales were soft. It has already been widely known that this is going to be a long, drawn out recovery."
Even though sales were not as robust as seen over the past several months, some sectors reported noteworthy upticks.
Sales at furniture and home-furnishing stores increased 1%, sporting goods, hobby, book and music store sales rose 0.4% and electronics and appliance stores sales grew 0.6%. Internet retail sales were also encouraging, climbing 2%.
"The takeaway we get from a broader perspective is that retail sales remain somewhat volatile and we really will not have a great read on the consumer until we get to the back-to-school season," Strasser wrote. The real data point as to where consumer spending is headed won't come until August and September, he added.
Still, June is expected to be a solid month, as the later Memorial Day holiday pushed some sales out of May and into June. The month should also receive a boost from Father's Day and promotions ahead of the back-to-school season.
Investors should use the market's recent weakness and doubt over a consumer recovery as an opportunity to gobble up shares of retailers, according to analysts. Since April 26, the S&P Retail Index is down 12.5%.
Analysts are eying footwear retailers such as
Sozzi also called out
as a stock to watch. "I happen to think they will be getting some nice inventory buys later this year considering how everyone has loaded up," he said.
Retail stocks are currently a mixed bag Friday, with some big winners and losers.
is surging 9.9% to $15.40 after reporting improved sales and margins in the first quarter, while
is soaring 16.6% to $1.83.
American Eagle Outfitters
is also among the day's gainers, up 4.6% to $13.26.
is losing 9.1% to $1.40, while
shares saw a 2.3% drop to $29.27.
-Reported by Jeanine Poggi in New York.
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