UPDATE 1-Saks posts higher December same-store sales

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ATLANTA, Jan 10 (Reuters) - Upscale retailer Saks Inc (SKS.N: Quote, Profile, Research, Stock Buzz) reported a surprise increase in December sales at stores open at least a year on strength in fine jewelry, shoes and outerwear.

The company said same-store sales rose 0.8 percent. Analysts were expecting a 2.2 percent decline, according to Reuters Estimates.

The operator of Saks Fifth Avenue and Off 5th stores said it had faced more challenges in terms of competition and macroeconomic trends. As in its third quarter, which ended on Nov. 3, customers have continued to shift more of their spending to promotional events.

A change in the retail calendar shifted some sales into the prior month. For November, Saks posted a 25.7 percent rise in same-store sales.

Saks, which has been renovating stores and focusing on well-to-do customers, said same-store sales had increased 10.2 percent for the combined November-December period. It said it still expected high-single-digit percentage growth in same-store sales for the fourth quarter.

The weakest performer in December was women's clothing, including modern collections, sportswear and large sizes, Saks said.

Total sales for the five weeks ended Jan. 5 rose 0.8 percent to $447.7 million.

Separately, holding company Prudential Financial (PRU.N: Quote, Profile, Research, Stock Buzz) disclosed in a federal filing on Thursday that it owned a passive stake of 15.57 million shares, or 11 percent, in Saks.

Saks shares were up 59 cents, or 3.4 percent, to $17.82 in afternoon New York Stock Exchange trade. (Reporting by Karen Jacobs; Editing by Lisa Von Ahn)