Saks Posts Profit on Sale of Regional Stores

Saks Inc., the luxury retailer under a federal probe, posted a fiscal second-quarter profit of $8.19 million after selling its southern department stores.

Net income of 6 cents a share contrasted with a net loss of $25.3 million, or 18 cents, a year earlier, Birmingham, Ala.-based Saks said. Sales in the period ended July 30 fell 2.6% to $1.32 billion after the store divestitures.

Total profit was helped by a gain of 52 cents a share from the $622-million sale of the McRae’s and Proffitt’s stores.

Excluding the gain from the sale of the stores and other items, the company said it lost 34 cents a share. On that basis Saks was expected to post a loss of 20 cents a share, according to Thomson Financial.

Sales at the company’s regional chains were flat in the quarter, while its Saks Fifth Avenue unit recorded a wider loss on increased discounts and a reduction in markdown payments from vendors. Saks’ markdown collections are the subject of probes by federal regulators.

Shares of Saks rose 33 centsto $16.93.