UPDATE 3-H&R Block Q1 loss wider than expected, shares dip

* Q1 loss from cont ops $0.39 vs est $0.37

* Sees lower tax returns filed for coming season

* Sees closing 300 traditional stores

* Stock falls 3 pct (Adds analysts' comments, background; updates stock activity)

By Anurag Kotoky and Brenton Cordeiro

BANGALORE, Sept 4 (Reuters) - H&R Block Inc (HRB.N) posted a wider-than-expected quarterly loss on Friday, hurt by higher expenses in tax services segment, and said it expects tax returns filed to fall about 1 to 2 percent in the coming tax season.

Shares of the largest U.S. tax preparer fell 3 percent.

The Kansas City, Missouri-based company said it would close about 300 traditional offices prior to the tax season and added it has no plans to open a "significant" number of new stores this year.

"I think the employment rates are driving lower returns... Only when you see an improvement in the job picture, you will see an improvement in tax returns filed," Northcoast Res analyst Kartik Mehta said.

U.S. job losses were the smallest in a year last month but the unemployment rate unexpectedly jumped to a 26-year high, according to data on Friday that showed the labor market limping toward health. [ID:nN04159609] H&R Block is working on the specifics of its pricing strategy, and would offer some targeted price value schemes for the client segment most affected by the global economic meltdown, a company official said on a conference call with analysts.

"The things that they talked about sound good but it all comes down to execution," Stephens Inc analyst David Burtzlaff said by phone.

The company did not execute its plans to attract more clients last year and lost market share, hence there are still some concerns given past performance, the analyst said.

H&R Block provides tax return preparation services in person, and online through its TaxCut software.

TaxCut competes with bigger tax software rival Intuit Inc's (INTU.O) TurboTax, which held 79 percent of the retail unit market share for personal computer software in last year's tax season.

H&R Block chairman Richard Breeden, who once chaired the U.S. Securities and Exchange Commission, has refocused the company on tax preparation after taking charge in 2007, shedding a money-losing subprime mortgage unit and a securities brokerage and reducing mortgage exposure at its H&R Block Bank unit.

On Thursday, smaller rival Jackson Hewitt Tax Service Inc (JTX.N) said it could be forced to revisit pricing as its bank partners look to restructure certain refund programs, and posted a seasonal quarterly loss. [ID:nBNG543291]