UPDATE 1-Kohl's July sales down 10.4 pct; shares dip

NEW YORK, Aug 7 (Reuters) - Kohl's Corp (KSS.N) said on Thursday that July sales at stores open at least a year fell a worse-than-expected 10.4 percent, hurt by lower inventories, and the mid-priced department store chain's shares fell 2.5 percent in premarket trade.

Analysts on average were expecting Kohl's sales to fall 7 percent for the month, according to Thomson Reuters Estimates.

Kohl's, based in Menomonee Falls, Wisconsin, said total sales for the four weeks ended Aug. 2 fell 2.4 percent to $1.03 billion.

"July was a month of driven by clearance sales of spring and summer merchandise," said Larry Montgomery, Kohl's chief executive officer. "Our inventory levels in these clearance and transitional categories were significantly lower than last year, affecting sales results, but leading to improved gross margins."

"We enter the fall season well-positioned and able to react quickly to any improvement in sales trends," Montgomery said, adding that the company is comfortable with the current First Call consensus earnings estimate of 73 cents per share for the fiscal second quarter.

According to Reuters Estimates, analysts on average are expecting 72 cents per share.

Kohl's shares fell to $43.72 in premarket trade on Thursday after closing at $44.83 on Wednesday on the New York Stock Exchange. (Reporting by Martinne Geller, editing by Dave Zimmerman)