Sales at Woodward & Lothrop Inc., stores increased in the third quarter, but not enough to overcome the increase in interest rates, Chairman Edwin K. Hoffman said yesterday. The Washington retailer was left with a 13.8 percent slump in its earnings for the period ended Oct. 31.

"While sales increases for August and September were on plan, the rate of sales increases decreased in October, and into November," Hoffman said yesterday. He also blamed lower profits on the impact of inflation on the department store company's fixed expenses.

For the latest three-month period, Woodies' sales rose 8 percent to $82.3 million from $76.2 million for the third quarter of 1980. But earnings for the latest period were down from $2.13 million (87 cents a share) in 1980 to $1.84 million (75 cents) this year.

For the first nine months, Woodies' sales increased 10.2 percent to $228.4 million from $207.2 million in 1980. Earnings for the three quarters climbed 11.4 percent to $4.12 million ($1.67) from $3.7 million ($1.50) for the same period of 1980.

Besides citing the higher sales figures to account for Woodies' better performance earlier this year, Hoffman pointed out that interest expenses jumped 32.8 percent for the nine months and 29.7 percent for the third quarter alone over figures for those periods last year.

Indicating how the company would hold the line against sliding sales and escalating interest costs, Hoffman said, "We continue to control inventory and expenses, in particular payroll expense."

In other earnings reports yesterday, two utilities serving the Washington region posted gains in October.

Washington Gas Light Co. said earnings for the 12 months ended Oct. 31 rose to $17.9 million ($3.18) from $13.05 million (2.36) in 1980. For the same reporting periods, WGL's revenues grew to $525 million from $428.4 million. The company attributed the improvement to higher retail rates, more customers and colder weather last winter.

Baltimore Gas & Electric Co., reporting figures for the 10 months ended Oct. 31, had earnings of $131.72 million ($3.31) compared with $121.42 million ($3.20) last year. Revenues were $1.172 billion compared with $1.014 billion for 1980.

For the past 12 months, BG&E earned $149.7 million ($3.75) compared with $134.3 million ($3.50) in 1980 on revenues of $1.384 billion in 1981 and $1.187 billion in 1980. BG&E also declared a regular quarterly dividend of 67 cents a share on common stock, payable Jan. 2 to owners of record Dec. 10.

James River Corp. of Richmond reported earnings for its second quarter ended Oct. 25 of $7 million (65 cents) compared with $3.2 million for the same period last year. During the second quarter last year the company had a charge of $1.3 million from settlement of an antitrust suit, making the final net $1.8 million (23 cents) last year. Sales were $203.3 million in the latest quarter compared with $91.4 million.

For the first six months the company reported net income of $11.3 million (98 cents) compared with operating income of $5 million (64 cents) last year. The company had a $2.9 million extraordinary charge from settlement of an antitrust suit last year, making the final net $2.1 million (24 cents). Sales were $381.3 million compared with $169.3 million.

Computer Entry Systems Corp., a computer products firm in Silver Spring, reported third-quarter net income of $410,490 (13 cents) compared with $277,585 (10 cents). Revenues were $2 million, compared with $1.6 million in 1980. For the nine months ended Sept. 30, net income was $1.1 million (35 cents) compared with $734,488 (26 cents). Revenues were $5.9 million for 1981 compared with $4.2 million.