• Q3 losses narrowed to US$214,000
  • Sales were up 10.5% to $121m
  • Gross margin rose to 38.7% from 36.8%

US clothing retailer Bebe Stores said it expects fourth-quarter earnings to fall after seeing weaker comparable store sales growth and lower merchandise margins.

The company is forecasting same-store sales growth in the low single digit range, as it faces tough comparisons with the same period last year. It expects net income from continuing operations to be $0.02-0.04 per share compared to $0.06 per share last time.

The forecast came as the company said third-quarter losses narrowed to US$214,000, against $2.6m in the prior year. Sales from continuing operations were up 10.5% to $121m, while comparable-store sales increased 7.2%.

Gross margin from continuing operations increased to 38.7% from 36.8% in the same period of the prior year.