May 6 (Reuters) - Bebe Stores Inc (BEBE.O) posted a bigger-than-expected quarterly loss, but sales at the women's apparel retailer topped as new merchandise and fresher designs brought customers back to stores.

www.bebe.com

Brisbane, California-based Bebe had fallen out of favor with its target audience because of fashion missteps. However, the company worked on its merchandise and last quarter it saw a rise in younger customers.

For the third quarter, the pricey retailer posted a loss of $5.5 million, or 6 cents a share, compared with $5.0 million last year.

Sales fell 10 percent to $114.4 million, an improvement over last quarter's drop of 22 percent.

Analysts, on average, were looking at a loss of 2 cents a share, on revenue of $109.6 million.

For the fourth quarter, the company expects to post a loss of 2 cents a share to a profit of 4 cents a share, while analysts were looking at earnings of 2 cents a share.

Bebe shares were up slightly at $7.64 after the bell. They had closed at $7.55 Thursday 6 May on Nasdaq. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Jarshad Kakkrakandy)