CORRECTED - UPDATE 2-Dillard's quarterly loss narrower than view

(Reuters Estimates corrects quarterly loss comparisons, removing reference to items in paragraph 3)

* Q2 shr loss 36 cts vs Street's shr loss 56 cts

* Q2 sales down to $1.43 billion

* Shares unchanged at $9.99 (Adds stock activity, details on costs, background)

SEATTLE, Aug 17 (Reuters) - Dillard's Inc (DDS.N: Quote, Profile, Research) posted a smaller-than-expected quarterly loss on Monday as the department store operator cut costs and inventory to offset lower sales.

The company's second-quarter net loss was $26.7 million, or 36 cents per share, compared with a loss of $38.3 million, or 51 cents per share, a year earlier.

Analysts, on average, expected a loss of 56 cents a share, according to Reuters Estimates.

Sales fell about 11.2 percent to $1.43 billion. Merchandise sales in same stores declined 13 percent.

Dillard's closed one store in the quarter and has identified five other locations to close in 2009. Dillard's said it would close underperforming stores, where appropriate.