Wal-Mart is taking a cautious view of the rest of the year

But the US-based stores giant disappointed retail analysts by falling short of their earnings forecasts.

Wal-Mart's chief executive also warned analysts they risked taking an over-optimistic view of consumer spending trends.

Wal-Mart's shares slipped 3% in morning trading on US stock markets after its earnings report.

Cautious shoppers

"I don't think consumer spending is slowing, but I also don't see the strength that many of you in the investment community appear to see," said Wal-Mart chief executive Lee Scott.

And he warned that US shoppers remain frugal in their spending habit.

"We're still seeing a cautious customer who is buying at opening price points and who is timing their expenditures around the receipt of their pay checks," said Mr Scott.

Wal-Mart reported sales worth $62.5bn in the third quarter of 2003, up from $55.2bn year-earlier.

Sales trends were generally healthy: up 6.1% in US stores that have been open for at least a year, and 8% in Sam's Clubs, the firm's bulk purchase warehouses.

However, Wal-Mart's earnings per share disappointed analysts who had pencilled in 47 cents per share, according to a poll by Thomson First Call.

The retailer missed this target, posting earnings per share of 46 cents.

Mr Scott said analysts had set their forecasts unrealistically high, ignoring the retailer's guidance.

Wal-Mart has about 3,500 stores in the US, and 1,300 abroad.