Warnaco Inc. posted slight sales increases and a strong net income gain in the third quarter as the company’s Swimwear Group, which includes Speedo, Ocean Pacific, and other designer brand swimwear, offset lackluster sales in the other divisions.

Revenues for the Swimwear Group grew 21.5% to $37.5 million from $30.9 million during the third quarter of 2004. This strong sales growth did not translate to the bottom line; however, as the division’s operating loss widened 34.5% to a loss of $13.0 million from last year’s loss of $9.7 million, affected primarily by the internal integration of the core OP business. Speedo net revenues increased 9.3%, while designer net revenues more than doubled.

Total WRNC net revenues were up about 1.0% to $327.7 million for Q3. Gross margins rose 280 basis points to 34.4% of sales and net income jumped 331% to $6.9 million, or 15 cents per diluted share.