Retailer Saks ( SKS) swung to a profit in the first quarter, its year-ago number reflecting a goodwill charge. Before the items, earnings fell from a year ago and were a penny short of analysts' forecast, reflecting lower same-store sales.

The company earned $14.4 million, or 10 cents a share, in the quarter ended May 3, compared with a prior-year loss of $25.4 million, or 17 cents a share. There was a 1-cent gain in the latest quarter and a 32-cent charge in the year-ago period.

Excluding the items, the company earned $12.6 million, or 9 cents a share, compared with $21.9 million, or 15 cents a share, in the comparable-year quarter. Analysts expected the company to earn 10 cents a share.

"We were disappointed in the company's first quarter performance as a consolidated comparable store sales decline of 3.4% and the associated 20 basis point deterioration in our gross margin rate led to a year-over-year decline in earnings," said R. Brad Martin, chief executive of Birmingham, Ala.-based Saks.

Total sales were down 3.1% to $1.38 billion. Saks department store group comparable sales fell 2.9%, while Saks Fifth Avenue Enterprises comparable store sales decreased 4.1%.

Looking to the second quarter, the company said: "We believe that there will be continued sales and gross margin rate pressure in the second quarter of 2003. We are cautiously optimistic regarding some improvement in sales and operating performance trends in the second half of 2003." Analysts expect the company to lose 16 cents a share. Saks lost 14 cents a share in the second quarter last year.

Shares of Saks were recently up about 1% to $8.72 in mid-morning trading.

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