Luxury chain swings to profit

Luxury retail chain Saks Inc. reported an unexpected fiscal third-quarter profit, its first in more than a year, after it reduced inventories and expenses to counter a sales drop.

Net income was $1.93 million, or 1 cent a share, in the quarter ended Oct. 31, compared with a loss of $43.7 million, or 32 cents, a year earlier, New York-based Saks said.

Revenue declined 8.5% to $631.4 million. Sales at stores open at least a year fell 10%.

Revenue has dropped as consumers crimped luxury spending amid job losses and lower home values. Saks cut inventories 21% during the quarter and reduced selling, general and administrative expenses 10% to $162.6 million.

Saks shares rose 26 cents, or 4.1%, to $6.67.