CORRECTED - UPDATE 3-Mexico's Soriana net down, but sales push stock up

(Corrects stock change, last paragraph) (Adds CFO comments, outlook, byline, updates stock quotes)

By Cyntia Barrera Diaz

MEXICO CITY, July 17 (Reuters) - Soriana, Mexico's No. 2 retailer, on Thursday said second-quarter profit fell 27 percent, hit by rising expenses from a recent acquisition and an advertising campaign that boosted sales sharply.

Soriana (SORIANAB.MX), headquartered in the northern city of Monterrey, earned 503 million pesos ($49 million) in the April-to-June period, compared with 689 million pesos a year earlier.

Quarterly operating expenses, excluding depreciation and amortization, jumped 65 percent to 3.052 billion pesos, hurting the bottom line.

Last year Soriana bought 198 stores from smaller rival Gigante (GIGANTE.MX) in a $1.35 billion deal.

The acquisition better positioned the company to compete against leader Wal-Mart de Mexico (WALMEXV.MX) and gave Soriana access to the coveted Mexico City market, where it had a limited exposure before the deal.

"This increase is explained by considering in our results the diverse expenses resulting from the integration of the Gigante units ... and a new special investment in advertisement as part of our strategy to enter the new markets," the company said.

ADVERTS GALORE

Chief Financial Officer Aurelio Adan told analysts on a conference call that the advertising investment to position Soriana could last for two or three more months more and would impact third-quarter results, too.

Soriana's second-quarter net sales rose nearly 51 percent to 22.773 billion pesos.

"This growth was driven by the important commercial efforts done throughout the quarter and particularly during the month of June," Soriana said.

Adan said Soriana maintained its full-year forecast of sales growth of 50 percent.

Soriana launched a nationwide campaign last month aimed at gaining customers in new territories where it had increased its presence with the acquisition of the Gigante stores.

The company is spearheading its marketing drive with a loyalty card where clients gain points for every purchase they make and use them toward future shopping, including exclusive products from catalogs.

Adan said the loyalty program -- a unique offer among top Mexican retailers -- is yielding good results and over 60 percent of sales in cities like Guadalajara, Tijuana and the capital are based on the loyalty card that customers use at least once a week.

"This percentage is increasing every week," Adan said. "We expect to finish the year at least having 80 percent going through the loyalty program."

Soriana shares were 39 centavos higher, or 1.11 percent, at 35.40 pesos in late afternoon trading after soaring more than 4 percent earlier in the session.

($1 = 10.3070 as of end of June) (Editing by Gary Hill)