U.S. Retailers Report Sluggish Sales Growth : Economy: Target and Los Angeles-based Broadway Stores posted surprisingly strong gains during seasonal lull.

There were signs of life in California, but U.S. retailers on Thursday reported generally lackluster sales growth for July as consumer spending slowed during the traditional vacation-season lull.

Some retailers with a strong California presence were among the companies that performed better in July--another sign that the state economy may be improving slightly.

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July is traditionally a clearance period when retailers try to sell remaining summer merchandise. The Salomon Bros. retail index of industrywide sales posted a modest 3.9% increase over July, 1993.

But analysts said one reason for the small gains was that many retailers maintained smaller inventories going into July and engaged in less discounting. Thus, the stores’ financial results were somewhat better than the percentage comparisons suggest.

Los Angeles-based Broadway Stores and Dayton Hudson Corp. of Minneapolis--operator of the Target and Mervyn’s chains--had unexpectedly strong sales during the month.

Broadway Stores had an 8.5% increase in same-store sales--revenue from stores open at least 12 months--as apparel and home furnishings sold well. Same-store sales provide the best year-to-year comparison because the figures exclude stores that have recently opened.

“July was a strong month for our stores, both in terms of same-store sales and total sales,” said Broadway Stores President David L. Dworkin. “These sales results have put us in a very good position as we enter the back-to-school season.”

Same-store sales at Dayton Hudson rose a surprising 6.8%. The same yardstick at Mervyn’s rose only 1% in July, but Target sales climbed 9% during the period. Of the 584 Target stores nationwide, 118 are in California.

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At Kmart, which retail economist Kurt Barnard said still suffers from “unattractive” stores, same-store sales fell 0.1%. But Sears had a sales increase of 5.2% and J.C. Penney recorded a 6% rise. Sales at May Department Stores, operator of the Robinsons-May chain, rose 3%. And Federated Department Stores had a 3.2% rise in same-store sales.

Meanwhile, specialty apparel chains continued to struggle because of what Monroe Greenstein, an analyst at Lazard Freres in New York, described as “no strong fashion trends.”

Limited Inc. reported an 8% drop and Gap Inc. had only a 1% rise in same-store sales.