Saks Surprises with Q3 Profits

Luxury retailer Saks Inc. eked out a profit for the first time in six quarters, even though its sales fell, by trimming expenses and scaling back on promotions and clearance discounts, the company reported Tuesday.

The retailer, which hadn’t turned a quarterly profit since the first quarter of 2008, earned $1.9 million, or 1 cent per share, in the three months that ended Oct. 31.

That compares with a loss of $43.7 million, or 32 cents per share, a year earlier when it closed its Club Libby Lu chain to focus on its namesake department stores.

Revenue fell 8.5 percent to $631.4 million from $690.3 million a year earlier, and sales at stores open more than a year declined 10.1 percent.

Saks said its Manhattan flagship store did much better than earlier this year, but sales at the Fifth Avenue store, which had been doing worse than the company as a whole, were still weak.

Among the items that sold better in the third quarter were women’s designer sportswear, outerwear and jewelry.

Analysts surveyed by Thomson Reuters, who usually exclude one-time items, forecast a loss of 11 cents per share on revenue of $625.6 million.

Selling, general and administrative expenses declined by $18 million, more than the company expected.

Saks expects sales at stores open at least a year to decline in the high-single digits for the fourth quarter and in the mid-double digits for the full year.

Shares of the company rose 45 cents, or 7 percent, to $6.85 in morning trading Tuesday.

11/17/2009 10:10 AM BETSY VERECKEY, AP Business Writer NEW YORK