Wal-Mart Stores has reported a 12.3% net sales leap to US$79.613bn for the first quarter of 2007, attributed to “driving sales, reducing costs and improving inventory management”.

Net income for the quarter was $2.615bn, a 6.3% increase from $2.461bn in the 2006 comparable period. The disparity between sales and income growth was the result of increased fuel costs which drove down margins.

Earnings per share rose to $0.63, from $0.58.

Wal-Mart stores posted an operating income of $3.981bn, an increase of 20.4% compared the first quarter of fiscal 2006. The company’s Sam’s Club segment income increased 8.1% to $319m, while its international segment grew the least – climbing 6.9% to $713m for the first quarter.

Wal-Mart Stores president and chief executive officer Lee Scott said: “We are very pleased with our start to this fiscal year. We continued to have record sales and earnings and our inventory performance was the best we have seen in many quarters.”

For the second quarter of fiscal 2007, the retailer estimates earnings per share to come in between $0.70 and $0.74, and for fiscal 2007, the forecast continues to be $2.88 to $2.95.