Wal-Mart same-store sales beat expectations in May

ROGERS, Arkansas (Reuters) - Wal-Mart Stores Inc (WMT.N) on Thursday reported a better-than-expected rise in May sales at U.S. stores open at least a year, boosted by demand for items like groceries, medicines, flat-panel televisions and computers.

Shares of the world's largest retailer hit a four-year high. This was its strongest monthly sales performance since March 2007, when it got a boost from Easter holiday sales.

Wal-Mart also said shoppers had cashed about $350 million worth of tax rebate checks in its stores.

"There's no way for us to know how much of that $350 million has been spent in the store," Chief Financial Officer Tom Schoewe told reporters in Rogers, Arkansas, the day before Wal-Mart's annual shareholders meeting. But he said: "It's clear there was a positive influence from that."

The rebates are part of Washington's $152 billion 2008 economic stimulus package, and about 130 million households are receiving some $100 billion in cash to spend.

To entice shoppers to use their rebate dollars in its stores, Wal-Mart is offering to cash the checks and cutting prices on staple goods such as cereal and lunch meat.

For June, Wal-Mart expects U.S. same-store sales to rise 2 percent to 4 percent.

Its shares were up 3.4 percent to $59.63 in morning New York Stock Exchange trading after rising as high as $59.76.

MAY SALES BEAT EXPECTATIONS

The 3.9 percent rise in May U.S. same-store sales, which excludes gasoline sales, was above the analysts' average estimate of 1.6 percent, according to Thomson Reuters data. Wal-Mart's own forecast was for sales to be flat to up 2 percent.

Same-store sales at the company's namesake discount stores rose 4 percent in May, and advanced 3.6 percent at its Sam's Club warehouse division.

Net sales in the month ended May 30 rose 9.8 percent to $31.04 billion.

Wal-Mart's home products section showed its first same-store sales increase in more than two years. After a string of disappointing sales, the company has been working to improve the department's results with new products and renovations.

Schoewe said that with the sharp increase in gas prices, Wal-Mart customers are apparently spending more time at home and are buying items for use there.

"Our customer is clearly under pressure when it comes to higher gas prices, higher food prices," he said.

"Basic" items like food are making up a big portion of what customers are buying during their trips to a Wal-Mart, Schoewe said.

Despite high gas prices, he said that for the May reporting period, customer traffic in the company's stores rose. (Reporting by Aarthi Sivaraman in New York and Nicole Maestri in Arkansas; Editing by Derek Caney, John Wallace and Lisa Von Ahn)