UPDATE 4-Kroger's sales forecast misses Street, shares slide

(Adds analyst comment, context on price competition)

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 8 percent to $20.96 in midday trading after the company also said it would no longer provide longer-term forecasts, due to the "dynamic operating environment."

The disappointing report came as Kroger, which operates some 2,800 stores across the United States, discounted heavily to fend off competition from Wal-Mart Stores Inc, discounters Lidl and Aldi and the newly merged Amazon.com and Whole Foods Market.

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.

Amazon.com's $13.7 billion purchase of Whole Foods has sent shivers through the grocery industry, on worries that the online retail giant could upend the fresh food business in the way it did with books and electronics.

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.

"We expect the pricing environment to remain very competitive in 2017," Moody's Vice President Mickey Chadha said in an email.

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

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.

Chief Financial Officer Michael Schlotman told investors that Kroger'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' forecast for a 0.4 percent increase, according to Consensus Metrix.

Sales climbed 3.9 percent to $27.60 billion, edging past analysts' $27.49 billion estimate. (Reporting by Vibhuti Sharma in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Sai Sachin Ravikumar and Phil Berlowitz)