Wal-Mart quarterly profit rises 7 percent : US Business

NEW YORK (Reuters) - Wal-Mart Stores Inc , the world's largest retailer, reported a 7 percent rise in quarterly profit on Tuesday as discounts drew U.S. shoppers looking for bargains on necessities like food and pharmacy items.

Net income rose to $3.02 billion, or 76 cents per share, in the first quarter ended on April 30, from $2.83 billion, or 68 cents per share, a year earlier.

The results matched the analysts' average forecast, according to Reuters Estimates.

Consumers are seeking out Wal-Mart's low prices, especially for basic items like groceries, shampoo and cleaning supplies, as the U.S. economy falters and prices of food and fuel soar.

The economic downturn comes as Wal-Mart has gotten back to the basics, trumpeting its low prices and slowing its aggressive expansion plans, to improve results at its existing U.S. stores.

At the end of January, Wal-Mart slashed prices on thousands of items by up to 30 percent to win sales from cash-strapped U.S. shoppers.

In the quarter, net sales rose 10 percent to $94.12 billion. Sales at U.S. stores open at least a year, a key retail gauge known as same-store sales, rose 2.9 percent.

For the second-quarter, Wal-Mart forecast earnings per share of 78 cents to 81 cents. Analysts on average are expecting 81 cents.

Wal-Mart shares have jumped 22 percent this year, while smaller rival Target Corp is up almost 7 percent and the Standard and Poor's Retail Index <.RLX> is down 1 percent.

(Reporting by Nicole Maestri; Editing by Lisa Von Ahn)

(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.