UPDATE 1-Brazil retailer CBD to invest 733 mln reais in '08

(Recasts, adds EBITDA margin, background)

SAO PAULO, May 14 (Reuters) - Brazilian retailer CBD PCAR4.SA said on Wednesday it would invest 733 million reais ($438.9 million) this year, less than the 1.2 billion reais it spent in 2007, as it seeks to cut costs and boost profits.

The company (CBD.N), better known by its flagship supermarket chain Pao de Acucar, also said it expects gross sales to surpass 20 billion reais in 2008, up from 17.6 billion reais last year.

EBITDA (earnings before interest, taxes, depreciation and amortization) margin, a measure of profitability, should rise to between 7.5 percent and 8 percent in 2008 from 6.9 percent last year, the company said in its annual guidance report.

The forecasts are the first under Claudio Galeazzi, who was brought in as chief executive in December to revitalize the group in the face of stiff competition from French retailer Carrefour (CARR.PA) and U.S.-based Wal-Mart Stores Inc (WMT.N).

Wal-Mart, the world's biggest retailer, plans to invest 1.2 billion reais in Brazil this year to build 36 new outlets and a distribution center. Carrefour, which overtook CBD last year as Brazil's top retailer, plans to spend 1 billion reais a year in the country through 2010. ($1=1.67 reais) (Reporting by Tais Fuoco, Writing by Todd Benson; Editing by Derek Caney)