French Connection said strong demand for winter-warmers helped halt sales declines, but it warned conditions remain "inconsistent".
The group, which has 73 stores in the UK, reported flat like-for-like revenues in its UK and Europe division in the 16 weeks to November 20, compared with a 9.5% drop in the first half of its financial year.
French Connection said the improvement came as autumnal weather boosted sales of coats and knitwear.
But shares in the retailer fell more than 6% as French Connection said it was still on course to make a full-year loss amid volatile trading.
Freddie George, retail analyst at Seymour Pierce, slashed his full-year forecast for the group, pencilling in a pre-tax loss of £4.5 million against previous expectations for a loss of £3 million.
He added: "Although it will be a long haul to get the company back on the recovery track and we do not now expect the company to break even until 2015 at the earliest, we believe the business does have value."
The group is overhauling its UK business following a review earlier this year. It said changes made so far in stores had led to higher retail sales volumes and would now be rolled out across the entire estate.
The group is looking to sell its under-performing stores, but it warned this process has been slow as demand for retail space remains weak.
In North America, retail trading in the quarter was also broadly flat on last year, while wholesale revenue has continued to grow on the other side of the Atlantic.
Meanwhile, its joint ventures in Asia continue to reflect the retail market slowdown in China and Hong Kong, resulting in a small reduction in profit levels.