UPDATE 3-Payroll taxes, gas prices take bite out of Wal-Mart's U.S. Sales

* Profit $1.67/share tops Street view $1.57/share

* Dividend raised 18 percent

* Walmart U.S. sales up 1 pct, seen flat in current qtr

* Shares gain more than 1 percent early

CHICAGO/BOCA RATON, Fla., Feb 21 (Reuters) - Wal-Mart Stores Inc said on Thursday that U.S. sales weakness persisted into early February, as Americans absorbed the impact of higher payroll taxes and gasoline prices, along with slow tax refunds that put some spending on hold.

The weakness came even as the world's largest retailer reported a bigger-than-expected profit increase, which was helped by a lower-than-anticipated tax rate. Wal-Mart also raised its dividend payout.

Wal-Mart's shares rose 1.6 percent to $70.38 in early trading.

Walmart U.S., Wal-Mart's largest unit by far, has had a slow start to February, which Walmart U.S. Chief Executive Bill Simon attributed largely to a delay in income tax refunds. The company expects sales at Walmart U.S. stores open at least a year, or same-store sales, to be about flat during the current first quarter. A year earlier, such sales rose 2.6 percent.

"I think Wal-Mart is quite well positioned actually," Stewart Samuel, a senior analyst with food and grocery researcher IGD, said. "If there is any sort of trading down, Wal-Mart will benefit from that."

Efforts such as extending its layaway program and matching competitors' prices attracted shoppers during the competitive holiday season, but Walmart U.S. same-store sales rose just 1 percent in the fourth quarter. The company had forecast an increase of 1 percent to 3 percent, and analysts, on average, had anticipated a 1.5 percent gain.

A year earlier, Walmart U.S. same-store sales rose 1.5 percent.

"We are confident that our low prices will continue to resonate, as families adjust to a reduced paycheck and increased gas prices," CEO Simon said in a statement.

The results from Wal-Mart are the latest sign of pressure on U.S. consumers due to the Jan. 1 expiration of a 2 percent cut in payroll taxes, a delay in income tax refund payments and a 30 cent increase in gasoline prices this year through last week.

Consumer sentiment for lower-income individuals fell for a third straight month in January to its lowest level since November 2011, according to University of Michigan data.

"Wal-Mart is a proxy for the broader U.S. consumer. We have been hearing that February is off to a slow start and this adds to that view," Joseph Feldman, a senior retail analyst at Telsey Advisory Group, said.

But the company has also been focusing hard on its strategy of offering low prices and the economic pressure could help it in the long run, some analysts said.

Wal-Mart said its biggest unit gained market share in major categories of food, consumables, health and wellness and over-the-counter medications, as well as in entertainment and toys, which are big sellers during the holiday period. It cited data from Nielsen and the NPD Group.

FORECASTS PROFIT GROWTH

Wal-Mart earned $5.61 billion, or $1.67 per share, from continuing operations in the fiscal fourth quarter, up from $5.19 billion, or $1.51 per share a year earlier.

Wal-Mart had forecast a profit of $1.53 to $1.58 per share from continuing operations, and analysts expected it to earn $1.57 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 3.9 percent to $127.92 billion.

The company forecast first-quarter earnings per share of $1.11 to $1.16, up from $1.09 a year earlier.

It also forecast fiscal-year earnings per share of $5.20 to $5.40, including about 9 cents in increased costs for its e-commerce operations. It earned $5.02 per share in fiscal 2013.

Wal-Mart spent $157 million last year on its own probe of alleged bribery allegations in Mexico, Brazil, China and India. A New York Times article in April 2012 unveiled alleged bribery at the major Mexican unit.

The company said its forecast includes about $40 million to $45 million in first-quarter costs related to foreign corrupt practices act and compliance matters.

Wal-Mart said its fiscal year 2014 dividend would be $1.88 per share, up from $1.59 per share in fiscal 2013.

Wal-Mart saw traffic weaken in a majority of international markets in the fourth quarter. Consumers in China were shifting to weekly stock-up trips from daily shopping, while convenience shoppers in Brazil, Canada and Mexico shopped less and bought fewer items. Sales growth also slowed at its British Asda unit.