Saks Inc. (NYSE: SKS) reported Tuesday a 66% increase in first-quarter earnings, compared with weak year-ago results. Staples Inc. (NASDAQ: SPLS), on the other hand, posted only a 1.5% increase in its first-quarter profit, compared to small profit declines the previous two quarters.

New York-based Saks, the operator of luxury chain Saks Fifth Avenue, said it earned $18.27 million, or 13 cents per share, for the three months ended May 3, up from $11.04 million, or 7 cents per share, in the year-ago period. Revenues rose to $862.35 million, compared with $792.75 million in the year-ago period. Analysts surveyed by Thomson Financial expected higher profits of 17 cents per share on lower revenue of $840 million.

The company said same-store sales rose 8.4% percent in the quarter. Like many retailers, Saks warned that the challenging economic environment will continue for the rest of the year.

Shares dropped 93 cents, or 6.6%, to $13.20 Tuesday, but rebounded 12 cents in after-hours trading.

Strong sales to corporate customers helped Staples net income rise to $212.3 million, or 30 cents per share, in the three months ended May 3, up from $209.1 million, or 29 cents per share, a year earlier. That matched the consensus estimate of analysts surveyed by Thomson Financial.

Framingham, Mass.-based Staples said its sales rose 6% in the first quarter to $4.88 billion, topping the analysts' forecast of $4.83 billion. For the second quarter, Staples says it expects flat earnings per share growth.

Staples reaffirmed its full-year profit and sales forecasts, saying it still sees no quick turnaround in the U.S. office products industry.

Staples shares rose 4 cents Tuesday, and an additional 7 cents in after-hours trading, to $23.68.

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