(Adds comments, details on online performance, food performance, shares)
CHICAGO, Nov 16 (Reuters) - Wal-Mart Stores Inc, the world's largest retailer, reported better-than-expected quarterly sales at established U.S. stores on Thursday, boosted by hurricane-related purchases and soaring online sales, sending its shares up 4.4 percent.
The retailer has recorded more than three straight years of comparable sales growth, despite slow demand and a tough retail environment that has hurt brick-and-mortar rivals.
"We have momentum and it is encouraging to see customers reacting to our store and e-commerce initiatives," Chief Executive Officer Doug McMillon said.
Excluding special items, earnings per share came to $1 in the third quarter ended Oct. 31, exceeding the average analyst estimate of 97 cents, according to Thomson Reuters I/B/E/S.
The company's heavy investments in e-commerce have come at a price as profits fell. Wal-Mart's operating income fell 6.9 percent to $4.76 billion. Operating margins slipped to 3.9 percent from 4.4 percent in the same period a year earlier.
Sales at U.S. stores open at least a year rose 2.7 percent, excluding fuel price fluctuations. That is stronger than market expectations for a rise of 1.7 percent, according to Consensus Metrix. Hurricane-related sales, which included strong food sales, contributed 30 to 50 basis points to overall comparisons, the company said, with 100 basis points equaling 1 percent.
Earlier this year, devastating Hurricanes Harvey and Irma spurred demand at retailers for prevention and recovery materials along with food and grocery items.
Online sales soared 50 percent during the quarter, exceeding growth rates in the industry, but slower than the previous quarter's 60 percent rise. It added 80 basis points to the third-quarter comparable sales gain, boosted by its acquisition of e-commerce startup Jet.com for $3.3 billion last year.
"Walmart's online performance continues to validate its substantial investments in this critical channel," said Moody's retail analyst Charlie O'Shea.
Wal-Mart has been aggressively investing in e-commerce in the past year and now sells more than 60 million items online. It offers free two-day shipping without membership fees to compete against Amazon and discounts for picking up online purchases. Wal-Mart has acquired several online startups to attract more millennial customers.
Wal-Mart also raised its full-year profit forecast. It now expects earnings per share of $4.38 to $4.46 for the fiscal year versus its previous outlook of $4.30 to $4.40.
On Wednesday, rival Target Corp's holiday quarter profit forecast fell short of analysts' expectations, sending its shares down 10 percent.
Quarterly net income dropped to $1.75 billion from $3.03 billion a year earlier due to a loss related to debt extinguishment and exiting properties in internal markets.
Wal-Mart also said it was close to settling a years-long foreign-bribery probe and recorded a $283 million accrual charge in the quarter related to a settlement as talks with the U.S. Justice Department have progressed.
Shares of Wal-Mart traded at $93.80 before the market opened, up from Wednesday's close of $89.83. It has risen over 30 percent so far this year. (Reporting by Nandita Bose in Chicago; Editing by Jeffrey Benkoe)