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UPDATE 3-Kroger's sales forecast misses Street, shares slide

(Adds conference call commentary)

Sept 8 (Reuters) - Kroger Co on Friday reported lower quarterly earnings as price cuts hit its bottom line, and the biggest U.S. supermarket company forecast comparable-store sales below Wall Street estimates.

Shares of Kroger, which have skidded 38 percent so far this year, tumbled nearly 6 percent to $21.47 in morning New York Stock Exchange trading.

The disappointing forecast came as Kroger, which operates some 2,800 stores across the United States, discounted heavily to fend off competition from Wal-Mart Stores Inc and other retailers.

Kroger said it expects sales at stores open for at least a year to rise 0.5 percent to 1 percent, excluding fuel, for the remainder of the year. Analysts on average were expecting a 1.2 percent increase in comparable-store sales in the third quarter and 1.7 percent in the fourth quarter, according to Consensus Metrix.

U.S. grocers and retailers have struggled in the face of intensifying competition from Amazon.com Inc as more people shop online. Amazon's purchase of upscale grocer Whole Foods Market has added to concerns that retailers would be forced to cut prices more aggressively to hold on to customers.

Amazon last month lowered prices on some Whole Foods groceries including avocados and beef. Kroger has also slashed prices on staples such as milk and eggs, analysts have said.

To combat competition from the web, Kroger Chief Executive Officer Rodney McMullen said on a conference call that Kroger is testing delivery at 150 stores and will have online ordering and curbside pickup by the end of the year at more than 1,000 stores.

Kroger's net earnings fell 7.8 percent to $353 million or 39 cents per share in the second quarter ended Aug. 12, matching analysts' average expectation on a per-share basis, according to Thomson Reuters I/B/E/S.

Michael Schlotman, Kroger's chief financial officer, told investors that the company's results continue to be pressured by healthcare and pension costs that some rivals do not face.

Excluding fuel, sales at Kroger stores open for at least a year rose 0.7 percent in the quarter, beating analysts' estimates of a 0.4 percent increase, according to Consensus Metrix.

Sales climbed 3.9 percent to $27.60 billion, edging past analysts' estimates of $27.49 billion.

Kroger also said it would no longer provide longer-term forecasts, given what it called a "dynamic operating environment." (Reporting by Vibhuti Sharma in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Sai Sachin Ravikumar and Phil Berlowitz)