Wal-Mart Stores posted better-than-expected quarterly profit on Tuesday as penny-pinching U.S. shoppers scoured its discount stores for low prices on necessities like food to offset tough economic conditions.

We know that the economy remains a critical factor in this new fiscal year, said Lee Scott, CEO of the world's largest retailer, in a statement. Customers were more cautious in their spending in January.

For the first quarter, it forecast sales at its U.S. stores open at least a year, a key retail gauge known as same-store sales, to be flat to up 2 percent, citing the challenging economic environment.

Net income rose 4 percent to $4.096 billion, or $1.02 per share, for its fiscal fourth quarter ended January 31, from $3.94 billion, or 95 cents per share, a year earlier.

The most recent quarter's results included charges of 3 cents per share for dropped real estate projects and a restructuring charge for its Japanese operations, and a 1 cent per share benefit from the sale of certain real estate properties.

Excluding the items, Wal-Mart reported earnings of $1.04 per share, above analysts' average estimate of $1.02 per share, according to Reuters Estimates.

WORKING TO GET SALES ON TRACK

Wal-Mart spent most of last fiscal year working to improve sales at its U.S. stores after efforts in 2006 to downplay its discount roots and stock of cheap but trendy clothes and home goods backfired with its shoppers, who were looking for basic merchandise.

Last year, it cleared out the poor selling merchandise and then cut prices earlier than ever for the holiday season, hoping to win back sales from its lower-income shoppers, who are feeling the pinch of higher food and fuel costs, and the downturn in the housing market.

Sales for the quarter rose to $106.27 billion from $98.09 billion. Sales in its international division jumped almost 19 percent to $27.01 billion, while sales in its discount stores rose 5 percent to $67.43 billion.

Sales at its U.S. stores open at least a year rose 1.7 percent in the quarter, compared with a rise of 1.6 percent a year ago, as shoppers headed to its stores for groceries, health care items and electronics.

Same-store sales at its namesake discount stores rose 1.6 percent, while they advanced 2.5 percent at its Sam's Club warehouse divisions.

It said customer traffic continued to decline in its U.S. stores, but at a slower rate in the fourth quarter than at the beginning of the year.

Sales in its struggling apparel business are improving, and it said it is working to add more brand names and licensed products to its stores. The retailer is hoping to improve sales in its home category by the second half of the fiscal year.

PLANNING FOR THE FISCAL YEAR

While its results were stronger than Wall Street was expecting, Wal-Mart said this year's economic environment and inflationary pressures will present challenges.

For the current fiscal year, which began February 1, it warned that fuel costs could be a potential headwind if they continue to rise beyond projections.

It also said that it continues to monitor inflationary pressures in dairy, meat and bread in its core food business.

For the first-quarter, it forecast earnings of 70 to 74 cents per share. Analysts, on average, have been expecting earnings of 73 cents per share for the first quarter.

For the full-year it expects earnings of $3.30 per share to $3.43 per share, compared with analysts' expectation for earnings of $3.42.

(Reporting by Nicole Maestri; Editing by Derek Caney and Gerald E. McCormick)

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