Wal-Mart Stores Inc. said yesterday that third-quarter profit rose 11.5 percent, a positive omen for the holiday season following lackluster monthly sales.

Target Corp., which also reported quarterly profit, once again outpaced Wal-Mart's growth, while on the other end of the spectrum, luxury department store chain Saks Inc. saw strong results as well.

Wal-Mart has been fighting fluctuations in gas prices and poor performance of its hip Metro 7 women's clothing line in many stores. It has aggressively slashed prices on toys, electronics and home appliances in an attempt to bolster sales before the holiday shopping season, which accounts for roughly 20 percent of the retail industry's sales.

Analyst Patricia Edwards of Wentworth, Hauser & Violich said Wal-Mart's performance was slightly better than expected. The retailer's extensive price reductions have not eaten into its profit too much and seem to be driving shoppers to its stores, she said.

"I think you have to cut them a little bit of slack," Edwards said. "At least it looks like they have a plan at this point."

Wal-Mart's profit in the three months ended Oct. 31 was $2.65 billion, up from $2.37 billion in the comparable period last year. Revenue rose 12 percent, to $84.47 billion.

Sales at U.S. stores open at least a year, a key measure in retail known as comparable-store sales, increased 1.5 percent at Wal-Mart locations and 1.8 percent at the retailer's Sam's Club wholesale division.

Wal-Mart's price cuts have helped set an intensely competitive tone for the holiday shopping season. Some of Wal-Mart's rivals have been scrambling to keep up with its promotions.

J.P. Morgan analyst Stephen C. Chick wrote in a research note yesterday that Circuit City would likely be hurt by falling prices of consumer electronics, particularly flat-screen TVs. Wal-Mart is selling a 26-inch Panasonic high-definition flat-screen television for $898 on its Web site. Circuit City Stores Inc. recently reduced its price on the same TV to $899.99 from $1,099.

Yet Wal-Mart has not been able to shake its main rival, Target. In a conference call with analysts yesterday, Target's president, Gregg W. Steinhafel, pledged to match Wal-Mart's prices in markets where they compete.

Target's profit jumped 16 percent in the third quarter, to $506 million from $435 million. Revenue was up 11 percent, to $13.57 billion. Officials attributed the growth to strong comparable-store sales growth of 4.6 percent, new store openings and its credit card operations.

Meanwhile, department stores have been staging a comeback after years of sluggish sales growth, with luxury retailers leading the way. Saks posted a third-quarter profit of $6.2 million, a vast improvement from earnings of $225,000 in the corresponding period last year. Revenue increased 8 percent, to $697 million. During the quarter, the company sold off several divisions, including the Parisian chain.

Home Depot Inc. said yesterday that third-quarter earnings were down 3 percent, to $1.49 billion. Revenue increased 11 percent to $23.09 billion, but comparable-store sales were down 5.1 percent. The company blamed weakness in the housing market and a general economic slowdown.