UPDATE 2-Bebe Stores posts wider-than-expected Q1 loss

* Q1 loss at $0.05/shr vs est $0.02/shr

* Q1 rev at $125.7 mln vs est $129.1 mln

* Shares down more than 5 pct (Adds conference call details, updates stock activity)

Nov 5 (Reuters) - Women's apparel retailer Bebe Stores Inc (BEBE.O) posted a wider-than-expected quarterly loss, as higher markdowns squeezed gross margins.

Like many others, the retailer has undertaken a number of cost-cutting measures to counter slumping sales, which were down 30 percent this quarter.

On a conference call with analysts, a company executive said Bebe continues to see mall traffic dwindle, specially at Bebe Sport stores.

"These results are a combination of disappointing sell through in back-to-school...in addition to the label change which began to take place in September," she said.

Earlier in July, the retailer had said it plans to convert its existing Bebe Sport stores into PH8, a new retail concept, in November.

First-quarter net loss was $4.2 million, or 5 cents a share, compared with a profit of $11.2 million, or 12 cents per share, year ago.

Analysts on average were expecting earnings of 2 cents a share on revenue of $129.1 million, according to Thomson Reuters I/B/E/S.

Gross margins fell to 36.7 percent in the first-quarter, compared with 44.9 percent a year ago, the company said in a statement.

Shares of the Brisbane, California-based retailer were down 10 cents in trading after the bell. They closed at $6.53 Thursday on Nasdaq. (Reporting by Shobhana Chadha in Bangalore; Editing by Anil D'Silva)