UPDATE 3-Costco warns on 2nd qtr results; shares fall

* January same-store sales fell 2 percent

* Sees Q2 EPS below First Call consensus of 70 cents

* Says will not provide earnings forecasts

* Shares fall 6.8 pct, Wal-Mart down 1.9 pct (Adds CFO comments, updates share price)

By Nicole Maestri

NEW YORK, Feb 4 (Reuters) - Costco Wholesale Corp (COST.O) warned that quarterly earnings would be well below Wall Street estimates after it cut prices in the holiday season, and said it would not give earnings forecasts for the fiscal year, pushing shares down 6.8 percent.

The largest U.S. warehouse club also said on Wednesday that January sales at stores open at least a year, or same-store sales, fell 2 percent.

"It is increasingly difficult, with everything going on, to provide guidance that we don't have to then change," said Chief Financial Officer Richard Galanti on a conference call.

Galanti said the U.S. economy has "kind of hit a bottom," but it could get a little worse or stay depressed for many months, if not a year. The retailer has instituted a hiring freeze at its central and regional administrative offices.

The warning rattled Costco's competitors with shares of Sam's Club owner Wal-Mart Stores Inc (WMT.N) down almost 2 percent and BJ's Wholesale Club Inc (BJ.N) down 4.2 percent. Costco fell $3.03 to $43.09 in early afternoon trading.

"You do hate to see a Costco come out and say they're not going to give guidance," said Gary Bradshaw, portfolio manager at the Hodges Funds, which owns Costco shares. "It tells you that everybody is hunkering down and we may be in a prolonged period" of recession.

The warehouse club operator said profit for the second quarter ending Feb. 15 is expected to be "substantially below" the First Call consensus of 70 cents a share.

Analysts on average were expecting earnings of 71 cents a share, before special items, according to Reuters Estimates.

Six analysts polled by Thomson Reuters research were expecting the company's same-store sales to decline 3.7 percent in January.

FIGHT TO WIN MARKET SHARE

Costco has won customers by offering unexpected items, like Burberry handbags, alongside typical warehouse club goods, such as bulk-sized packages of toilet paper and crates of fresh fruit. As a U.S. recession squeezed budgets, shoppers have come to its clubs for low prices on food, and last year, customers flocked to its gas stations for cheap fuel.