Women’s clothing company Bernard Chaus Inc on Wednesday reported it swung to a profit in the first quarter despite lower sales as it enjoyed improvements in its gross margins and lower operating costs.

The New York-based company, whose brands include Josephine Chaus Collection and Josephine Chaus Studio, posted a net profit of $1.6 million compared to a net loss of $582,000 in the year-ago period. Revenues fell to $34.8m from $39.5m.

"We are very pleased that the solid progress we made in fiscal 2002 is carrying over into our new fiscal year," said Josephine Chaus, chairwoman and CEO.

"As evidenced by the significant increase in our gross margin to 27.2 per cent from 20.9 per cent in last year's first quarter, we are operating more efficiently and that is directly translating into increased profits.

"While the second quarter is historically our weakest period, we are on track at this time to report a significant improvement in results versus last year's second quarter."