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NEW YORK -(Dow Jones)- Consumers largely spent May seeking discounts and buying in bulk, with Wal-Mart Stores Inc. (NYSE:WMT) (WMT) benefitting from the $350 million in tax rebate checks consumers received. However, the company didn't disclose how much of that went into Wal-Mart's (NYSE:WMT) stores.

But Wal-Mart (NYSE:WMT) was just about the only retailer to talk about the U.S. government's stimulus package, and analysts are mixed about how many of the remaining rebate dollars will end up in retailers' coffers.

Wal-Mart's (NYSE:WMT) good fortune "bodes well for future trends, especially with more discretionary names," said Goldman Sachs retail analyst Adrianne Shapira. " Physical checks have only begun to arrive and I suspect follow-on spending will begin to snowball through July's end."

But Janet Hoffman, managing partner with the North American retail practice of Accenture Ltd. (NYSE:ACN) (ACN), feels consumers are still more in "duck and cover" mode.

"People are being selective about where they choose to spend," Hoffman said. " If they had taken their stimulus dollars and gotten out there we would have seen even better results than we did" for May same-store-sales.

Instead of being very discretionary about things, "Consumers are more inclined to use (the money) to buffer the rising cost of groceries and gas," Hoffman said. "As I look forward, I don't see anything that will change current trends. I think well see buying from the mass merchants, like Wal-Mart (NYSE:WMT) , and the apparel companies will continue to struggle."

That was generally the case in May, where deep discounters like Wal-Mart (NYSE:WMT) and Family Dollar Stores Inc. (NYSE:FDO) (FDO) tended to beat analysts' sales projections.

Goldman's Shapira expects Wal-Mart (NYSE:WMT) to raise its second quarter earnings estimate given its May showing and the company's solid June's projection. "Some degree of upward revision is inevitable," she said.

The announcement could be made as soon as the company's annual meeting on Friday, but more likely will come the second month of the quarter, in this case July, when Wal-Mart (NYSE:WMT) typically makes such adjustments, Shapira said.

Costco Wholesale Corp. (NASDAQ-NMS:COST) (COST) and BJ's Wholesale Club Inc. (NYSE:BJ) (BJ) also fared well as consumers brought down costs by purchasing in bulk.

But department stores like Dillard's Inc. (NYSE:DDS) (DDS) and Stein Mart Inc. (NASDAQ-NMS:SMRT) (SMRT), along with apparel concerns such as Gap Inc. (NYSE:GPS) (GPS) struggled.

Even some department stores that beat expectations actually saw sales fall. Kohl's Corp. (NYSE:KSS) (KSS), for instance, posted a 7.2% drop when an 8% decline had been projected.

To be sure, May same-store-sales did beat expectations on an overall level - rising 2.8% when 1.4% was the consensus.

But analysts had set their sights low and consumers were very selective about where they spent their money, appearing to seek out the best possible values at lower-cost stores.

"I think consumers, after really clamping down earlier in the year, have better adjusted to the credit crunch and higher gas prices and started to step in a little bit," said Russell Jones, director with the retail practice of AlixPartners.

Wal-Mart (NYSE:WMT) was a beneficiary, with sales rising 3.9% in May, well ahead of the company's forecast for 1.6%.

" Wal-Mart (NYSE:WMT) was in a position to see a lot of people come in to cash their rebate checks because their customers are generally lower income and need this kind of service," Jones said.

But overall, "I look at the numbers and think it could still be a tough year for many retailers," Jones said. "There are still some negatives out there that point to a weak economy and a number of merchants are not demonstrating clear value to consumers."

Indeed, when you back out heavily-weighted Wal-Mart's (NYSE:WMT) contribution to the sales scale, the growth figure for May goes from a 2.8% rise to a 1.6% gain.

That growth is still occurring "is encouraging, but it's still well below last year's monthly average of 2.6% and suggests that consumer spending is still under pressure even with the stimulus checks," said Ken Perkins, president of Retail Metrics.

Right now, retail stocks are finishing out a solid session, despite some analysts' admonitions that investors use the strength to take profits because conditions are still so uncertain.

Wal-Mart (NYSE:WMT) shares are up 3.7% to $59.81 while Kohl's (NYSE:KSS) is up 1.3% to $46.82. Shares of J.C. Penney Co. (NYSE:JCP) (JCP), which posted 4.4% sales decline, has risen 3% to $40.56.

The broad Standard & Poor's Retail Index is illustrating the almost blanket buying, showing a 1.4% gain.

-By Karen Talley, Dow Jones Newswires; 201-938-5106; karen.talley@dowjones.com

    (END) Dow Jones Newswires   06-05-08 1609   Copyright (c) 2008 Dow Jones & Company, Inc.