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TOKYO, Apr 27 (Reuters) Wal-Mart Stores Inc.'s Japanese unit posted a smaller quarterly operating loss on Thursday thanks to strong sales, especially at its renovated stores, and kept its full-year outlook unchanged.

Seiyu Ltd., 53 percent owned by the world's biggest retailer, said better seasonal promotions helped its same-store sales grow 2.1 percent in the three months ended March, the first quarter under its new Wal-Mart-dominant management.

Those sales showed a year-on-year rise for five consecutive months from November 2005, boosted also by unusually cold winter weather that encouraged consumers to buy heavy clothing and heaters.

Seiyu also added six stores to its 24-hour operations list in the quarter, helping increase customer traffic by 2.4 percent.

Seiyu said its group operating loss totalled 2.8 billion yen ($24 million) for the three months ended in March, against a 4.9 billion yen loss a year earlier. Sales were 229.66 billion yen, down 2 percent due to the disposal of several subsidiaries.

Its net loss for the quarter came to 52.85 billion yen, weighed down by 47.5 billion yen of asset write-down charges.

For the current year to December, it reiterated its operating profit estimate of 6.6 billion yen, in line with market expectations, on 966 billion yen in sales. It expects a fifth straight year of net losses this year at 54.5 billion yen.

Seiyu, which operates some 400 stores in Japan, expects its same-store sales to show their first year-on-year rise in 14 years in 2006.

Store renovations have been helping to attract customers, it said, and sales at these outlets are increasing at an average of 10 percent from a year earlier. Seiyu plans to remodel 65 existing stores in 2006, four times more than in 2005.

Japan's economic growth and a recovery in consumer spending that propelled other retailers' earnings were another factor behind Seiyu's brisk sales.

Most Japanese retailers, including giants Aeon Co. and Seven&I Holdings Co., forecast profit growth this business year, boosted in part by acquisitions of smaller players and new store openings.

Shares in Seiyu fell 6.5 percent in the January-March period, a steeper drop than the Tokyo Stock Exchange's retailer subindex IRETL, which fell 3.8 percent.

Before the announcement, the stock closed up 2.5 percent at 286 yen, while the subindex ended down 0.3 percent.

($1=114.73 Yen) REUTERS CS SSC1452