* Q3 cont ops loss/shr $0.11 vs est loss/shr $0.08
* Q3 sales $227.9 mln vs $231.89 mln
* Expects to achieve profitability in Q4
* Expects gross margins to "significantly improve" in Q4
* Shares rise 8 pct
Nov 19 (Reuters) - Women's apparel chain New York & Co Inc (NWY.N) posted weaker-than-expected third-quarter results, but said it expects to be profitable in the holiday quarter.
Shares of the company rose 8 percent in morning trade on Thursday.
"In October, we experienced the start of what we hope is a turnaround ... and this momentum has continued into the first two weeks of November," Chief Executive Richard Crystal said in a statement.
The company, which caters to working women with moderate incomes, also said it expects better gross margins in the fourth quarter on tightened inventory and costs.
During the third quarter, New York & Co said customers reacted well to its fall merchandise assortment, despite controlled promotional activity, letting merchandise margins improve by 110 basis points during the quarter.
It posted a net loss from continued operations of $6.3 million, or 11 cents a share, compared with $8 million, or 13 cents a share in the year-ago quarter.
Revenue fell 9 percent to $227.9 million.
Analysts on average were expecting a loss of 8 cents a share, on rev of $231.89 million.
The company said the third-quarter results met its expectations and reflected a sequential improvement in comparable store sales trend.
Shares of the company were up 7 percent at $4.00 in morning trade on the New York Stock Exchange, after touching a high of $4.04 earlier. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Gopakumar Warrier)