Contemporary women's wear retailer Bebe Stores Inc has swung to a third quarter loss after sales slumped 15.8%, and said it expects revenues to drop again in the quarter ahead.

Net loss for the third quarter was $5.0m, or $0.06 per share, compared to a profit of $8.3m, or $0.09 per share, in the same period last year.

This year's quarter includes $.02 per share for impairment charges and fixed asset write-offs related to underperforming stores and store closures.

Sales in the three months to 4 April tumbled to $127.7m from $151.7m last time, while same store sales dropped 23.5%.

Gross margin as a percentage of sales fell to 37.8% from 43.8% on unfavourable occupancy leverage and higher markdowns.

For the fourth quarter the company expects comparable store sales to be in the range of negative mid teens to low twenties, and earnings per share in the range of $0.02 to $0.10 per share. This compares with $0.18 per share a year ago.

Bebe Stores operates 308 Bebe, Bebe Sport, bbsp and 2b bebe stores.