Clothing retailer Le Chateau Inc reversed last year's losses by posting a small first quarter profit.

The Montreal-based business, which has about 160 stores across Canada and four in the New York City area, earned $343,000 for the three months to 27 April compared with a loss of $555,000 for the same period the previous year.

Sales increased nearly 12 per cent to just under $43 million from $38.4 million last year.