Wal-Mart Stores Inc said sales at its existing U.S. stores fell during the holiday quarter and forecast results for the current quarter that could miss Wall Street estimates.

The results cast new doubt on Wal-Mart's ability to grow in the United States as the worst of the recession passes and consumer spending thaws. The company's shares fell 1.9 percent in early trading.

The world's largest retailer acknowledged that its U.S. operations will still grapple with weak sales, predicting same-store sales, excluding fuel, will be flat, within a range of up 1 percent to down 1 percent in the current first quarter.

U.S. sales will be more challenging in the first quarter, as Walmart U.S. cycles through strong year-over-year comparisons and deflation, Wal-Mart Chief Executive Mike Duke said. We remain focused on growing top-line sales and expect improvement in the United States as the year progresses.

Eduardo Castro-Wright, head of the company's U.S. operations, said Walmart customers remained focused on high unemployment levels, a factor that could be weighing on sales.

Concern about unemployment remains much higher than last year, he said.

But Wal-Mart's rivals, such as department store operator Macy's Inc , have seen increased sales as consumer confidence picks up slightly. That has kept investors asking whether Wal-Mart would succeed in holding on to new shoppers who looked to it for bargains in the downturn.

Wal-Mart's profit for the fourth quarter that ended January 31 rose to $4.63 billion, or $1.21 per share, from $3.79 billion, or 96 cents per share, a year earlier.

Earnings per share, excluding a charge of 4 cents per share for restructuring and a tax benefit of 10 cents a share, were $1.17, ahead of a Wall Street forecast for $1.12 per share.

Sales in the quarter rose 4.6 percent to $112.82 billion, below a Wall Street view for $114.36 billion.

WALMART HOLIDAY SAME-STORE SALES DROP

Total U.S. same-store sales fell 1.6 percent, with sales rising 0.7 percent at its Sam's Club warehouse division but falling 2 percent in its Walmart stores. It had forecast U.S. same-store sales to be flat, plus-or-minus 1 percent.

Wal-Mart attributed some of the decline to its program to overhaul stores, which it said disrupted traffic during the fourth quarter. Total retail industry sales rose 1.1 percent during the November-December period, according to the National Retail Federation.

In a research note, Robert W. Baird & Co analyst Peter Benedict reiterated his outperform rating on the stock, saying he expected sales trends to improve as the year progresses.

For the first quarter, Wal-Mart expects earnings per share from continuing operations to range from 81 cents to 85 cents. Analysts were expecting 85 cents.

For its fiscal year 2011, Wal-Mart forecast earnings per share of $3.90 to $4.00. Analysts had forecast $3.97 per share.

Separately, Wal-Mart's Asda chain posted its lowest quarterly sales growth in about two years, citing too heavy a focus on limited-time price promotions. Asda is the No. 2 grocer in Britain.

Wal-Mart shares fell about $1.04, or 1.9 percent, to $53.02 in early New York Stock Exchange trading.

(Reporting by Nicole Maestri; Additional reporting by Michele Gershberg; editing by John Wallace and Maureen Bavdek)

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