Women's clothing company Bernard Chaus Inc on Thursday posted a sharp rise in third quarter net profit despite lower sales at it benefited from increased operating efficiencies, lower costs and improved margins.

The New York-based firm, whose labels include Josephine Chaus Collection and Josephine Chaus Sport, reported net income of $2.1 million, or seven cents a share, up 19.4 per cent from $1.8m, or six cents a share, in the year-ago period.

Sales for the 13 week period slipped to $41m from $43.6m in 2002 with the latest results including an initial contribution from the company's acquisition in December of certain assets of SL Danielle.

"Chaus delivered a solid third quarter performance, building on the positive momentum we have achieved this year," said Josephine Chaus, chairwoman and CEO.

"While the retail environment has remained very challenging, we have managed our business carefully and consistently increased profitability versus year-ago results.

"This progress is clearly evident in the improvement we have seen in gross margin to 25.3 per cent in the quarter up from 21.3 per cent in the respective third quarter period in fiscal 2002."