NEW YORK (Reuters) - Upscale department store operator Saks Inc (SKS.N) reported a quarterly profit on Tuesday 17 November, beating Wall Street expectations for a loss, and its shares rose 5.5 percent.

Prada handbags at Saks Fifth Avenue - Photo: www.skasfifthavenue.com

Saks said it kept a tight rein on inventories and expenses to manage a sharp decline in demand for luxury goods. But it also said that some merchandise categories such as women's designer sportswear and jewelry began to show improved sales trends.

Saks swung to a net profit of $1.9 million, or 1 cent a share in the third quarter ended October 31, from a loss of $43.7 million, or 32 cents a share, a year earlier. Analysts had forecast a loss per share of 11 cents, according to Thomson Reuters I/B/E/S.

Saks, which sells luxury brands such as Marc Jacobs, Versace and Oscar de la Renta, reported overall sales fell 8.5 percent to $631.4 million in the third quarter. It also reported same store sales were down 10.1 percent during the quarter.

Saks said last week that same store sales in October had risen 0.7 percent.

Consolidated inventories as of October 31 were down 21.4 percent to $799.1 million compared to a year earlier.

Saks said it estimated fourth-quarter sales would be down "in the high single digits."

(Reporting by Phil Wahba, editing by Dave Zimmerman)