Wal-Mart international operations core profit up 7.8 percent

LONDON (Reuters) - Wal-Mart Stores Inc posted a 7.8 percent rise in first-quarter operating income at its international businesses, excluding the impact of the stronger dollar, on a 9.1 percent rise in underlying sales.

The world's biggest retailer, which serves over 100 million shoppers a year from over 7,900 stores in 16 countries, said on Thursday international operating income at constant exchange rates was $1.13 billion in the three months ended April 30 on sales of $26.1 billion.

"In almost every country we grew the top line faster than the market despite the strong dollar and a recession that is even deeper in some countries than it is in the United States," said chief executive Mike Duke.

Including the impact of the stronger dollar, international operating income fell 16.2 percent to $880 million on an 11.1 percent drop in sales to $21.3 billion.

Wal-Mart, which employs more than 2 million people and makes just under a quarter of its sales outside the United States, said group earnings per share were broadly flat at 77 cents in the first quarter, in line with forecasts.

In the fourth quarter, international operating income rose 5.1 percent on sales up 9 percent at constant exchange rates.

Duke said Wal-Mart's Asda, Britain's second-biggest grocer, had a "stand out" first quarter.

Asda's like-for-like sales growth accelerated to 8.4 percent excluding fuel, up from 7.2 percent in the last quarter of 2008.

The performance topped a 3.4 percent rise in underlying sales reported by Tesco Plc, Britain's largest retailer, for the first six weeks of its new financial year, and a 6.2 percent increase posted by J Sainsbury Plc, Britain's third-largest grocer, for the 11 weeks to March 21.

Asda beat both its sales and profit targets for the quarter and grew profit ahead of sales.

Duke said although the economy in Mexico was "a real challenge," Wal-Mart continued to outperform the competition.

(Reporting by Mark Potter and James Davey, editing by Will Waterman and Dan Lalor)