UPDATE 2-DSW Q4 loss wider than estimates

* Q4 loss/shr $0.17 vs est. -$0.12

* Rev up 5 pct

* Sees FY09 capex of about $35 mln

* Sees mid-single digit drop in 2009 same-store sales

*Shares down more than 5 percent

(Recasts, adds conf call details)

March 25 (Reuters) - Footwear retailer DSW Inc (DSW.N) posted a wider-than-expected quarterly loss, hurt in part by higher costs, and said it would not provide an annual earnings outlook given the uncertainty in the U.S. economy.

Shoe and apparel companies have been hurt by shoppers cutting back in spending to concentrate on staples, or look for deep discounts when they buy non-essentials.

"Like most retailers, traffic was down during the quarter," Chief Financial Officer Douglas Probst said in a conference call with analysts, but added that selling average unit retail rose as the company did not have to discount as deeply as last year.

Same-store sales, a key measure of retail health, fell 7.2 percent during the quarter, compared with a fall of 1.7 percent last year.

For fiscal 2009, the company expects a mid-single digit drop in same-store sales and plans to open about 10 new DSW stores compared with 41 new stores in 2008.

During the quarter, selling, general and administrative rate increased 240 basis points to 24 percent, Probst said, while gross profit rate dropped 130 basis points to 20.6 percent.

For 2009, the Columbus, Ohio-based company, sees capital expenditures of about $35 million, down from $81 million in 2008.

The company, which doesn't expect to see much change in current shopping trends in Spring, also said it has built its inventory plans around the expected comp decrease, so as to further protect merchandise margins.

Merchandise margin rate for the year rose a 100 basis points over last year, Probst said.

The Columbus, Ohio-based company, which sells branded footwear for men and women at a discount, posted a net loss of $7.5 million, or 17 cents a share, compared with a profit of $1.1 million, or 2 cents a share, a year earlier.

Revenue for the quarter was $348.2 million. Same-store sales fell 5.9 percent. Cost of sales rose 6 percent to $276.3 million.

Analysts were expecting a loss of 12 cents a share, before special items, on revenue of $349.3 million, according to Reuters Estimates.

DSW shares were down 5.6 percent at $9.41 Wednesday on the New York Stock Exchange. (Reporting by Nivedita Bhattacharjee and Amitha Rajan in Bangalore; Editing by Jarshad Kakkrakandy)