By Anne D’Innocenzo

| The Associated Press

New York • Walmart Stores Inc.’s business offers valuable insight into how Americans are reacting in the slow economic recovery: They will spend, but only if they believe they’re getting the lowest prices.

The world’s largest retailer guaranteed holiday shoppers they’d get the lowest prices on merchandise. As a result, bargain-hungry shoppers flocked to Walmart in the fourth quarter, helping it to record its first increase in store traffic in at least two years.

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"Core customers remain cautious about their finances," said Mike Duke, Walmart’s president and chief executive, in a statement.

The new consumer behavior is likely to have an impact on companies of all shapes and sizes as they struggle with how to lure shoppers with low prices without cutting them so much that it erodes profits.

Walmart said Tuesday that revenue at its namesake stores open at least a year in the U.S. rose 1.5 percent in the quarter, slightly below the 1.6 percent gain analysts expected. Overall, it’s U.S. business had a 2.1 percent increase in revenue at stores opened at least a year, including a 5.4 percent rise at Sam’s Clubs.

Net sales, excluding membership fees from its Sam’s Club division, rose 5.9 percent to $122.28 billion.

While sales rose, margins fell. Overall gross margin was 24.3 percent in the quarter, down from 23.9 percent in the year-ago quarter.

The discounter, based in Bentonville, Ark., said net income was $5.16 billion, or $1.50 per share in the three months ended Jan. 31. That compares with $6.05 billion, or $1.70 per share, in the year ago period.

Macy’s, the second biggest U.S. department store chain, posted fourth-quarter profit that beat analysts’ estimates after using promotions to lure shoppers during the holiday season without cutting prices too deeply. It reported net income in the three months ended Jan. 28 rose 12 percent to $745 million, or $1.74 a share, from $667 million, or $1.55, a year earlier.

And Home Depot Inc., the world’s largest home-improvement retailer, reported fourth-quarter profit that also exceeded expectations as warmer weather helped spur an increase in residential spending. Net income in the quarter ended Jan. 29 increased 32 percent to $774 million, or 50 cents a share, from $587 million, or 36 cents, a year earlier.