The company's chairman and chief executive, Stephen Marks, said the 12 months to 31 January had allowed him to enter the current year with "renewed confidence" despite the crisis gripping much of the high street.
French Connection reported an underlying operating loss of £0.6m in its last financial year - an improvement on the £3.1m figure in 2016.
It was aided, the company said, by the closure of 11 loss-making stores which helped like-for-like sales climb 0.8% in the UK and Europe.
Mr Marks pointed to tight control on costs helping offset tough trading conditions - two elements that have contributed to the collapse of Toys R Us UK and Maplin in recent weeks.
Shoppers' budgets in its biggest market have been squeezed by Brexit-linked inflation at a time when wage growth has failed to keep pace.
The company, which made its name selling FCUK-branded clothing, had already been struggling against a wealth of online competitors.
But Mr Marks said he believed French Connection was well-placed to weather the continuing pressures.
"We have made considerable progress across the group over the last year and I enter the new financial year with renewed confidence off the back of that success.
"Our goal has been to return the group to profitability and I believe we are very close to achieving that aim, given the momentum that we are currently seeing within the business.
"While it is clear that the retail market in which we are operating in the UK is unlikely to improve in the near future,
we have clear visibility on the benefits we will obtain from the ongoing portfolio rationalisation.
"In addition the reaction to our collections and strength of our wholesale orders both for the spring and winter seasons further underpins the performance going forward.
"Although we are only early into the year, I believe we are in a very strong position to make significant progress again."