CHICAGO (Reuters) - Elizabeth Arden Inc (RDEN.O) posted a narrower-than-expected quarterly loss as sales rose in domestic and international markets and gross margins improved.

Elizabeth Arden

The cosmetics maker also raised its profit and cash flow expectations for its fiscal year, which ends in June, and kept its sales forecast.

Arden lost $3.9 million, or 14 cents per share, in its fiscal third quarter that ended on March 31, versus a loss of $3.7 million, or 13 cents per share, a year earlier.

Excluding restructuring and other expenses, Arden posted a loss of 11 cents per share. Sales rose 6.7 percent to $217 million.

Analysts expected an adjusted loss of 15 cents per share on $215.21 million in sales, according to Thomson Reuters I/B/E/S.

The sales growth was led by Elizabeth Arden branded products as well as Juicy Couture and Britney Spears fragrances, Chairman and Chief Executive E. Scott Beattie said in a statement.

Arden did not give details on sales at U.S. department stores in its report. Last week, larger rival Estee Lauder Cos Inc (EL.N) said weakness at those stores could dampen cosmetics sales in the near term and gave a higher profit forecast that fell short of Wall Street's expectations.

Arden has been reducing inventory and taking other steps to improve its results. It said third-quarter gross margins improved by 440 basis points and inventories declined 24 percent.

The company now expects fiscal-year earnings of 69 to 76 cents per share, up from January's forecast of 63 to 73 cents. It still expects sales to rise 2.5 percent to 3.5 percent. Analysts are calling for fiscal year earnings of 71 cents per share.

Arden expects fiscal-year cash flow from operations of $90 million to $100 million, up from its prior target of $70 million to $75 million.

(Reporting by Jessica Wohl; Editing by Derek Caney and Maureen Bavdek)