The costs cuts on everything from labour to transportation helped the company fund “rollbacks” on prices for thousands of items in recent weeks, as it tries to hold onto customers pressured by high unemployment and rising gas prices.
Expenses rose 3.9 per cent during the quarter, but that was well below a 5.9 per cent increase in sales, helped by international markets like Brazil, China and Mexico. Sales at its US discount stores open at least a year fell a worse-than-expected 1.4 per cent.
The company reported earnings of $3.32bn (£2.3bn), or 88 cents a share, for the fiscal first quarter ending 30 April. That compares with $3.03bn, or 77 cents a share, a year earlier and came in ahead of the 85 cents per share expected by analysts.
Meanwhile its British arm Asda posted a drop in quarterly underlying sales for the first time in four years yesterday, after being hit by lower food price inflation.
Asda chairman Andy Bond said he expected conditions to remain tough for some time. Sales at stores open at least a year fell 0.3 per cent, excluding petrol and VAT sales tax, in the first three months of the year. That was down from a rise of 4.6 per cent in the final quarter of 2009, and the first fall since early 2006.