Saks Inc. narrowed its second-quarter loss Tuesday thanks to strong comparable-store sales growth, gross margin rate expansion and expense leverage.

“Our second quarter comparable stores sales increase of 13.2 percent indicates that our customers are responding to our focused merchandise assortments as well as our customer service and marketing initiatives,” said Stephen Sadove, chief executive officer of Saks, in a statement. “We expanded our gross margin rate by 270 basis points for the quarter primarily as a result of reduced markdowns.”

For its second quarter ended Aug. 4, the high-end department store chain posted a net loss of $24.6 million, or 17 cents a diluted share, from a loss of $51.9 million, or 15 cents a diluted share in the year earlier period. The chain recorded a one-time charge of $4.3 million, or 3 cents a share, during the quarter. Net sales rose 13 percent to $694.1 million from $603.8 million in the same quarter last year.

Analysts had the company pegged to post a loss of 15 cents a share on revenue of $684.6 million.

For the balance of fiscal 2007, Saks expects same store sales growth of high-single digits and a “relatively flat” gross margin rate.

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