Women's clothing maker Movie Star Inc says it is "extremely disappointed" with its performance so far this year, despite a 20.4 per cent rise in third-quarter sales.

Financial third-quarter 2005 net sales rose 20.4 per cent to $14.7 million from $12.2m in the same period last year, due to the addition of the lower margin Sidney Bernstein & Son division (SB&S), which was acquired in August 2004.

Third-quarter net loss, however, totalled $761,000 compared to a net loss of $636,000 the year before.

For the financial nine-month period, net sales rose 16.9 per cent to $50.5m from $43.2m a year ago, while nine-month net loss totalled $1.1m compared to a net income of $634,000 in the same period last year.

Mel Knigin, president and chief executive officer, said: "although net sales in the third quarter improved over the same period last year, the fiscal 2004 third quarter did not have the benefit of sales from the SB&S division. Our struggle with gross margin continued into the third quarter and was the main contributor in the decline in profitability."

Knigin continued: "looking at our current open order position and shipments to date for the fourth quarter, we expect the continued softness in sales for our core Movie Star business to continue into the fourth quarter. As a result of the lower sales, we expect to record a loss in the fourth quarter."

Move Star Inc produces and sells ladies apparel, including sleepwear, robes, leisurewear, and daywear.