Broadway Reports Higher Sales, Smaller Loss : Retailing: Chain’s second-quarter results point to improvement in California’s economy.

Broadway Stores Inc. reported better-than-expected second-quarter results Tuesday, saying sales rose and losses narrowed during the period--another sign that the California economy may be improving slightly.

The Los Angeles-based retailer--operator of the Broadway department store chain--reported a loss of $12.9 million for the 13-week period ended July 30. In contrast, the company recorded a loss of $42.5 million for the same period of 1993.

The company had operating earnings--income before interest and taxes--of $10.6 million for the quarter, contrasted with an operating loss of $20.8 million for the same period last year.

Same-store sales--revenue from stores open at least 12 months--were $457 million, a 1.2% increase over the same period a year ago. Men’s apparel and cosmetics were among the strongest areas, but sales of women’s apparel also increased, the company said.

“Despite the continuing difficult economic climate, we are optimistic that the significant strides we made this quarter . . . will enable the company to achieve substantial overall improvement in our fiscal 1994 performance,” said David Dworkin, Broadway’s chief executive.

In addition to an improving California economy, Broadway’s performance reflects positive consumer reaction to the retailer’s store remodeling program and marketing changes, said Ira Hersch, an analyst at Fourteen Research. Broadway has reduced the number of sales promotions in favor of lower everyday prices on more items.

“The company is still marking prices down excessively to generate sales, but they’re heading in the right direction,” Hersch said. Ed Johnson, an analyst at Johnson Redbook in New York, also cited the quarterly results as evidence of a gradual resurgence at the company. “Store remodeling can be disruptive, but their sales are improving despite that work,” said Johnson, who predicted that the company will post a profit in the fourth quarter.

The retailer last reported a quarterly profit for the 13 weeks ended Jan. 30, 1993. It had a net income of $27.8 million during that period. The company reported a net loss of $18 million for the 13 weeks ended Jan. 29, 1994, but would have had net income if not for a $20-million charge for costs associated with the Jan. 17 Northridge earthquake.