Saks Inc. announced Tuesday its third-quarter net income plummeted 51 percent from the same period a year ago, but revenue increased and the company's overall performance beat Wall Street expectations.

Saks, the New York department store chain most famous for its locations on Fifth Avenue, said its net income for the period ending Oct. 29 was $17.8 million, or $0.11 per share. That fell far from $36.3 million, or $0.20 per share, last year, when the quarter included a gain of $26.7 million, $0.14 per share, related to tax reserves.

Excluding the year-ago tax reserves-related gain, Saks would have recorded a net income of $9.7 million, or $0.06 per share.

The company's revenue was up 5 percent to $692.3 million from $658.8 million a year ago. Analysts surveyed by FactSet had predicted $690.6 million in revenue, according to The Associated Press.

We continue to be optimistic about the future of luxury retailing in general and for Saks Fifth Avenue in particular, Saks chairman and CEO Stephen Sadove said in a statement released by the company. And we believe Saks is well-positioned for additional operating margin improvement over time.

At stores that have been open for at least a year, revenue increased at a similar, 5.8-percent clip. Saks Direct saw the biggest jump in these numbers -- 24 percent.

Looking ahead, Saks said it expected those strong numbers at stores open at least a year to continue. The company forecasted a mid-to-high single-digit percentage increase in the fourth quarter that, includes the holiday shopping season.

Our 5.8% comparable store sales increase for the third quarter was achieved in spite of further reductions in our promotional activity, Sadove said. I am especially pleased with our 160 basis point improvement in our third quarter gross margin rate.

There are currently 46 Sakes Fifth Avenue stores and 60 other locations.

Off the earnings report, shares of Saks climbed almost 2 percent to $10.40 as of 12:30 p.m. ET.