The world's biggest retailer, Wal-Mart, has reported rising quarterly profits after a solid holiday season.

For the three months to 31 January, Wal-Mart turned in a net income of $5.2bn (£3.3bn), up 3.4% compared with the same period in the previous year.

But the results did not match market expectations and its shares closed down more than 4% in New York.

Sales at its British arm, Asda, were up just 1%, a slowdown from the third quarter, when sales rose 1.3%.

Asda has a slightly different quarter from its parent company. It reports on the three months to 7 January.

Premium products

Wal-Mart has been lowering prices to tempt shoppers.

In its quarterly report, Wal-Mart's chief executive, Mike Duke, said the strategy is working.

"Our price leadership is making a difference across the United States, as many families are settling into a new normal," he said.

"Core customers remain cautious about their finances, and they rely on Wal-Mart's every day low price promise to help them manage through today's economic challenges."

But that growth has come at a cost. The company's profit margin fell in the fourth quarter because of discounting.

While overall sales growth at Asda was slow, the company's online business is booming. Sales were up 20% in the fourth quarter.

The company also said its new premium products, including the Leiths range of food, is selling well.

Wal-Mart has been expanding overseas with last year's purchase of South Africa's Massmart.

It is also planning to raise its stake in the Chinese internet retailer Yihaodian to 51%.

Source :bbc.co.uk