Abercrombie & Fitch Co. posted a decline in quarterly sales and gave a more cautious outlook for the year, as the apparel retailer struggled to attract shoppers to its mall-based outlets.

Shares of Abercrombie, which had risen 20% over the past year, fell 11% to $20.37 in premarket trading Tuesday.

Sales at stores open at least a year are expected to "remain challenging" through the second half of the year, the company said. In May, the company expected "better results" in the back of the year following assortment changes and other investments.

Executive Chairman Arthur Martinez cited "traffic headwinds in the domestic mall business" and a "significant drop-off" in tourism. "We do not see those headwinds materially changing in the next few months," he said in an interview.

The New Albany, Ohio, company said sales at stores open at least a year fell 4% in the fiscal second quarter ended July 30, matching the first quarter decline and the results in the same period last year. Analysts had expected a 4.2% decline.

The company's Hollister brand, which has been a bright spot in past quarters, lost steam. Hollister sales at stores open at least a year fell 2%, while that metric fell 7% at Abercrombie.

The company's namesake brand released a new assortment in recent months, reflecting a different look from its highly sexualized image of previous years. The clothing, however, still features denim and other basics—a market with many ailing competitors.

"What will set us apart is the quality we invest in the product, the patterns we use, particularly in the tops business, and the value for money," said Mr. Martinez.

Total revenue fell 4% to $783.2 million for the quarter. The company's net loss was $13.1 million, or 19 cents a share, compared with $0.8 million, or 1 cent, a year ago. Analysts had expected a loss of 20 cents a share on $783 million of revenue, according to FactSet.

Mr. Martinez said the company is continuing to hold the line on promotions. "We took our foot off the gas on discounting in the second quarter," he said. "We believe it is right for the brand."

One source of improvement was its digital performance. Direct-to-consumer sales grew to approximately 23% of total company sales for the second quarter, compared with 21% last year. Mr. Martinez attributed the increase to progress made on website design and omnichannel initiatives.

The company also recently expanded its reach across the web by entering into a wholesale agreement with Zalando SE, an online fashion retailer based in Europe. Last week, Abercrombie and Hollister products were made available to the site's 18 million active customers. "It's about creating ubiquity for the brand," said Mr. Martinez.

Write to Khadeeja Safdar at khadeeja.safdar@wsj.com

(END) Dow Jones Newswires

August 30, 2016 08:05 ET (12:05 GMT)