CHICAGO (Reuters) - Wal-Mart Stores Inc posted its fifth-consecutive quarterly drop in US same-store sales and said it would focus on curbing expenses to help boost profits this year as consumer sentiment remains soft.

The world's largest retailer posted a higher-than-expected quarterly profit and raised its full-year forecast yesterday, helped by cost cuts and international growth.

But analysts questioned how much longer the company could count on cost cuts to fuel profits while US sales struggled.

"Even though they raised guidance for the full year, how much more operating expenses can they cut?" Wall Street Strategies analyst Brian Sozzi said.

Wal-Mart said its strategy of offering short-term steep discounts on thousands of products in its US stores failed to lift sales as much as expected. In July, it shifted back to a focus on what it calls "everyday low prices" to lure shoppers instead.

"The slow economic recovery will continue to affect our customers, and we expect they will remain cautious about spending," Wal-Mart chief executive Mike Duke said in a statement.

The weak economic recovery was underscored by US Commerce Department data showing weaker-than-expected housing starts. Permits for future home construction fell to their lowest level in more than a year.

Wal-Mart said it will take time to see improvements in US same-store sales and forecast a decline of two percent to an increase of 1 percent in that measure in the third quarter.

Chief financial officer Tom Schoewe said Wal-Mart raised its full-year profit forecast based on its strong operating performance in the first half of the year, adding that it would continue to curb expenses going forward.

Wal-Mart's profit was $3.60 billion, or 97 cents a share, in the second quarter ended July 31. Analysts on average forecast 96 cents, according to Thomson Reuters.