Apparel and accessories retailer Wet Seal has narrowed its third-quarter loss, boosted by improved sales and profit margins.

Quarterly loss totalled US$6.5m compared to $24.2m in the same period last year, on a 17% year-on-year net sales rise to $129.3m.

Operating quarter totalled $0.3m in the quarter - the company's first quarterly positive operating income since the second quarter of 2002.

Net sales for the 13 weeks ended 29 October rose 16.7% to $16.7m compared to sales of $110.8m a year ago, encouraged by a 46.6% jump in same-store sales.

Chief executive Joel Waller said: "We continue to make excellent progress in repositioning our merchandise assortment and our competitive posture, as well as in achieving acceptable levels of financial performance.

"As we go forward, we are satisfied that we are once again in a position to begin to open new locations to drive growth in sales and profits and to deliver value to our shareholders."

The Company anticipates significant non-cash stock compensation charges in the fourth quarter, including about $7.0m associated with performance shares granted to Michael Gold and $0.5m associated with stock grants to its board of directors and employees.