Saks profit misses estimates
ATLANTA (Reuters) - Upscale retailer Saks Inc SKS.N reported quarterly profit on Tuesday that missed Wall Street estimates as promotions helped draw shoppers, but pressured gross margin, and its shares fell more than 6 percent.
Earnings rose to $18.3 million, or 13 cents a share, for the first quarter that ended May 3, compared with $11 million, or 7 cents a share, a year earlier. Results for the prior year included charges of $17.6 million, or 12 cents a share, tied to a company downsizing and other items.
Analysts expected profit of 17 cents a share, according to Reuters Estimates.
The operator of Saks Fifth Avenue stores said sales rose about 9 percent to $862.4 million. Sales at stores open at least a year, or same-store sales, rose 8.4 percent.
But gross margin contracted to 38.2 percent from 41.1 percent a year earlier, hurt by increased promotional activity and clearance markdowns.
Saks is renovating stores and expanding commission programs for its workers, but all retailers face a challenging environment as rising gasoline and fuel prices lead consumers to curb their spending.
Saks' shares sank more than 6 percent, or 93 cents, to $13.20 in morning New York Stock Exchange trading.
(Reporting by Karen Jacobs, editing by Maureen Bavdek)
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