* Saks sees holiday quarter comparable sales flat
* Third-quarter adj EPS 12 cts, in line with Street view
* Third-quarter margin hurt by "modest" jump in discounting
* Saks shares down 1.2 percent
By Phil Wahba
Nov 13 (Reuters) - Saks Inc said on Tuesday it expects Superstorm Sandy to take a toll on business in the holiday quarter, wiping out gains in same-store sales during the period.
The storm , which affected stores that account for more than half of S aks' s ales, struck the New Jersey coast on Oct. 29, ki lling at least 121 p eople and causing fl ooding, power outages and gasoline shortages in the Mid-Atlantic states.
Saks' flagship store on Manhattan's Fifth Avenue, which generates about one-fifth of company-wide sales, was boarded up and closed for two days. In total, eleven of its 45 department stores were closed because of Sandy for between a day and a week.
But Chief Executive Steve Sadove reassured analysts that the luxury chain was already recovering from the storm even though sales were still depressed two weeks later.
"You're not going to see a long-term effect from the hurricane," Sadove said.
Saks said it expects sales at stores open at least a year, or same-store sales, to be flat because of Sandy.
Executives on a call said the storm had caused some disruption to the supply chain, including delays in getting merchandise into stores, and that Saks would extend a sales event by a few days, compromising its gross profit in the current quarter.
Shares were down 1.2 percent at $9.76 after falling as low as $9.28 earlier in the session.
The company's sales rose 3 percent to $713.2 million in its fiscal third quarter, ended Oct. 27, below the $726.1 million analysts were expecting, according to Thomson Reuters I/B/E/S. Sales at stores open at least year rose 3.3 percent, short of the company's own forecasts.
Saks, which also operates 64 lower priced Saks Off Fifth stores, is far more exposed to the Northeast region than are rivals Nordstrom Inc or Neiman Marcus.
In addition to the Sandy-related slowdown, Saks is having to contend with some hesitation among luxury shoppers to spend.
During the third quarter, Saks sales and profits were hurt by what it called a "modest" spike in promotions, which lowered its gross profit margin by 0.3 point to 43.9 percent of sales.
Discounts could signal shoppers were a bit more hesitant to buy luxury items, forcing the chain to offer bargains to clear shelves to stock them with winter items.
"This isn't going gangbusters," Morningstar analyst Paul Swinand, said of luxury sales.
Swinand said high-end shoppers were more likely than others to be aware of the potential threat to the U.S. economy from the so-called fiscal cliff. That refers to the possibility of tax cuts not being extended next year, coupled with government spending reductions.
The retailer reported net income of $22.6 million, or 14 cents per share, up from $17.8 million, or 11 cents per share, a year earlier.
Excluding the reversal of a federal income tax reserve, Saks earned 12 cents per share, in line with analyst estimates.
Saks' cautious holiday quarter echoes muted forecasts in recent weeks from retailers across a wide spectrum.
TJX Cos Inc on Tuesday said it expects same-store sales during the holiday quarter to be flat to up 2 percent, while the midpoint of Michael Kors Holdings Inc's profit forecast for the quarter was below analyst estimates.
Ralph Lauren Corp recently cut its full-year sales forecast, while department store operators Kohl's Corp and Macy's Inc each gave holiday quarter profit forecasts that missed analyst expectations.