World's largest retailer, Wal-Mart Stores Inc has reported a lower than expected sales in the third quarter of the year as buyers in the key US market were affected by high prices of gasoline and unemployment while the store traffic continued to fall in China.

The company said that its sales in the quarter increased 3.4 per cent to $113.20 billion. However, analysts were expecting sales of about $114.96 billion, according to a survey by Thomson Reuters I/B/E/S. the company's sales fell due to lower prices of some food and electronics items. Its performance was also affected by slower growth of the Sam's Club unit.

The retailing giant also said that it generated an income of $3.64 billion or $1.08 per share during the third quarter of the year till October, 2012 compared to $3.34 billion, or 97 cents per share reported in the same quarter of the previous year. The retailer said that US sales this month has been better than expected, which is a good sign ahead of the crucial holiday season.

Wal-Mart shares fell 3.6 per cent at $68.73 on Thursday on the New York Stock Exchange.