(Reuters) - Wal-Mart Stores Inc's U.S. business continues to struggle even though rising food and gasoline costs should be driving customers to the chain, showing that the company must do more to finally turn around a two-year decline in same-store sales.

The world's largest retailer's breadth offset the impact of the U.S. slump, as strong international sales, cost-cutting and share repurchases helped it post a better-than-expected 3.8 percent rise in quarterly profit.

Wal-Mart's core U.S. shoppers are still stretched and have concerns about rising gas, energy and food prices, as well as employment issues. At the same time, small business owners who shop at its Sam's Club warehouse stores remain concerned about the economy and their access to credit.

Wal-Mart's shares fell 1.2 percent to $55.39 in premarket trading.

U.S. same-store sales fell 1.1 percent, in line with the company's forecast of a drop of 2 percent to flat, and slightly better than the average 1.3 percent decline expected by analysts according to Thomson Reuters.

"We recognize we still have work to do and comp sales growth remains the greatest priority for me and the entire Walmart U.S. team," Wal-Mart Chief Executive Officer Mike Duke said in a recorded call.

U.S. PRESSURES PERSIST

While U.S. same-store sales were within guidance, such sales still fell, which "tells us other players continue to steal market share," said Wall Street Strategies analyst Brian Sozzi.

Wal-Mart continues to see a paycheck cycle, and shoppers kept choosing lower-priced items and some private-label goods, Walmart U.S. Chief Executive Bill Simon said.

Most of the decline in first-quarter U.S. same-store sales came from a drop in store traffic, while the average that shoppers spent increased. Same-store sales of groceries and health and wellness items increased.

Walmart is not doing a good enough job getting people who come in for groceries to also buy clothing at its stores, and weather hurt sales of outdoor goods, Simon said.

Wal-Mart is not alone feeling pressure from bad weather. Home improvement chains Home Depot Inc and Lowes Cos Inc experienced weak spring demand.

Wal-Mart earned $3.4 billion, or 98 cents per share, in the first quarter that ended on April 30, up from $3.3 billion, or 87 cents per share, a year earlier.

The company had forecast per-share earnings of 91 cents to 96 cents and the analysts' average estimate was 95 cents, according to Thomson Reuters I/B/E/S.

Sales rose 4.4 percent to $103.42 billion, topping Wall Street's average forecast of $102.93 billon.

International sales soared 11.5 percent. At Asda, its British arm, sales growth almost ground to a halt.

The company forecast second-quarter earnings of $1.05 to $1.10 per share, up from 97 cents a year earlier. It expects U.S. same-store sales to be down 1 percent to up 1 percent.

(Reporting by Jessica Wohl; Editing by Dave Zimmerman and Maureen Bavdek)

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