ATLANTA 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)