UPDATE 1-Lululemon Athletica forecasts holiday quarter profit below estimates, shares fall

(Adds background, fourth-quarter revenue forecast)

Dec 11 (Reuters) - Lululemon Athletica Inc forecast profit for the all-important holiday quarter largely below analysts' expectations on Wednesday, sending the apparel maker's shares down 5% in extended trading.

The company has been offering heavier discounts on its apparel and accessories as competition in the athleisure space heats up with brands such as Sweden's H&M offering similar products at cheaper prices, in addition to pressure from sportswear leader Nike Inc.

Lululemon had 46% of its apparel on sale on its U.S. website during the third quarter, compared with last year's 39%, according to brokerage UBS. Morgan Stanley's discount tracker also found that the company's mark-down levels climbed in September.

Lululemon expects to earn between $2.10 and $2.13 per share in the fourth quarter. Analysts on average had expected the company to earn $2.13 per share.

It forecast fourth-quarter revenue to between $1.32 billion and $1.33 billion, also largely below Wall Street estimates.

Total comparable sales rose 17% on a constant currency basis in the third quarter ended Nov. 3. Analysts had estimated a rise of 14.39%, according to IBES data from Refinitiv.

Lululemon said its gross profit in the third quarter was hit by an increase in costs related to its distribution centers and also from a strong dollar.

The company's shares have nearly doubled this year, through Wednesday's close. (Reporting by Praveen Paramasivam and Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila)