Wal-Mart sales per customer fall because prices keep falling, too

Those everyday low prices took a bite out of its sales, but Wal-Mart Stores (WMT) still managed to post a winning third quarter. Profits were up thanks to cost-cutting, even as falling prices for food and electronics shrank sales receipts.

Wal-Mart managed to beat Wall Street's expectations with income of $3.25 billion, or 84 cents per share, better than analysts' forecasts of 81 cents. Income for the quarter ended Oct. 31 was up 3.5% above the same time last year, and sales were up 1.1%, but comparable-store sales were down 0.8%.

Management had expected better sales growth and blamed the lower numbers on deflation in the food and electronics aisles. Analysts had been warning that Wal-Mart's low-price strategy would take its toll on earnings.