Wal-Mart Stores posted a better than expected 11.5 per cent rise in quarterly profit yesterday, helped by strength in its international business, and said deep discounts would drive better holiday sales.

Net income rose to $2.65 billion (€2.07 billion), or 63 cents per share, in the third quarter that ended October 31st, from $2.37 billion, or 57 cents per share, a year earlier.

Results in the latest period include a one cent per share insurance gain related to last year's hurricanes. Sales rose 12 per cent to $83.54 billion, with international sales up nearly 34 per cent.

Chief executive officer Lee Scott said holiday season price cuts should boost fourth-quarter demand.