UPDATE 1-Oil-Dri says expects lower sales to largest customer

* Says changes to impact fiscal 2010 sales and income

* Says 2010 earnings to be lower than past few years

June 12 (Reuters) - Cat litter maker Oil-Dri Corp of America (ODC.N) said it expects to lose branded cat litter sales and related profitability with its largest customer, which will impact its fiscal 2010 sales and net income.

The company said its largest customer had decided to market its own brand in its stores.

"As a result, Oil-Dri expects to maintain distribution of branded cat litter products only in those markets where its brands fit this customer's strategy but will lose distribution where they do not," the company said in a statement.

Oil-Dri added lower sales of its brands will not materially affect its current fiscal year ending July 31, as the changes will go into effect in August.

"We believe that these changes will have a materially negative impact on fiscal 2010 sales and net income," Chief Executive Daniel Jaffee however said.

Jaffee also said Oil-Dri's fiscal 2010 earnings will be below what the company has reported in the past couple of years.

Shares of Oil-Dri closed at $18.76 Friday on the New York Stock Exchange. They fell 7 percent to $17.40 after market-close.

For the alerts, please double click [ID:nWNAB9446] (Reporting by Arup Roychoudhury in Bangalore; Editing by Jarshad Kakkrakandy) (arup.roychoudhury@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: arup.roychoudhury.reuters.com@reuters.net))