UPDATE 1-Zale 3rd-qtr sales up but expects loss

(Recasts and adds outlook, CEO comment)

NEW YORK, May 8 (Reuters) - Zale Corp (ZLC.N) posted a 5.8-percent increase in third-quarter same-store sales, boosted by markdowns, but said it expected a loss in the period as gross margins were hurt by those markdowns.

Total sales for the quarter, which ended on Apr. 30, rose 6.3 percent to $477 million.

"Sales were fueled primarily by an aggressive clearance strategy that exceeded our expectations with $55 million of inventory liquidated in the third quarter," Chief Executive Neal Goldberg said in a statement.

Zale expects a loss in the range of 40 cents to 45 cents a share from continuing operations in the third quarter, as the promotional activity in the quarter pressured gross margins.

The company expects heightened promotions to hurt gross margins further in the fourth quarter. (Reporting by Aarthi Sivaraman; Editing by Derek Caney)