Wal-Mart's comparable sales hurt by falling food prices

Wal-Mart Stores Inc on Thursday reported lower-than-expected quarterly sales at established U.S. stores, hurt by declining food prices and unseasonably warm weather, and its shares fell nearly 3 percent.

Investors shrugged off earnings that slightly exceeded analysts' estimates. Wal-Mart, the world's largest retailer, also raised the low end of its fiscal-year profit forecast, in line with Target Corp and other rivals that expressed optimism ahead of the holiday shopping season.

"Food deflation continues to be challenging," Chief Financial Officer Brett Biggs told Reuters.

Deflation has been strong for products like eggs, an important category for a food retailer, he said.

Wal-Mart said sales at U.S. stores open at least a year rose 1.2 percent, excluding fuel price fluctuations, in the third quarter ended on Oct. 31. That is weaker than market expectations of a 1.3 percent rise, according to research firm Consensus Metrix.

Net income attributable to Wal-Mart fell to $3.03 billion, or 98 cents per share, from $3.3 billion, or $1.03 per share, a year earlier. Analysts on average expected 96 cents per share, according to Thomson Reuters I/B/E/S.

Net sales rose 0.5 percent to $117.2 billion.

Online sales increased 20.6 percent, accelerating from the previous quarter. That business added 50 basis points to third-quarter comparable sales, its biggest contribution to date.

To try to narrow the gap with online leader Amazon.com Inc and increase its dominance in retailing, Wal-Mart has invested heavily in e-commerce, acquiring startup Jet.com in August for $3 billion.

"The U.S. (e-commerce) results were stronger than those in our key international markets, driven by our marketplace offering ... as well as a contribution from Jet.com," Chief Executive Officer Doug McMillon said.

At Wednesday's close, Wal-Mart's shares were up more than 16 percent since the start of the year.

(Reporting by Nandita Bose in Chicago; Editing by Lisa Von Ahn)