Abercrombie & Fitch Co. (ANF) swung to a fiscal third-quarter loss as the teen-apparel retailer recorded charges related to the restructuring of its intimate apparel brand, along with another sharp drop in same-store sales.

"Our results for the third quarter reflect weakness in top-line performance, which we expect to continue in the fourth quarter," Chief Executive Mike Jeffries said.

Earlier this month, Abercrombie said it expected a low double-digit decrease in same-store sales for the fourth quarter and significant gross margin erosion as the company clears out excess inventory.

Abercrombie has been working to turn around weakness it showed in previous quarters as its fashions failed to resonate with teens and young adults. The company has been grappling with disappointing sales at home and abroad, inventory challenges and an increase in markdowns.

At Abercrombie's first meeting with analysts in more than 2.5 years roughly two weeks ago, the company detailed its plans to improve profits following a long-term strategic review and said it will offer larger sizes, more colors and styles online, in addition to considering expanding other product categories like shoes and accessories through third-party collaborations as it tries to win back teens who have defected to trendier fast-fashion retailers like Swedish retailer Hennes & Mauritz AB (HM-B.SK), known as H&M, and Forever 21 Inc.

The company has also been closing stores in an effort to improve margins in the U.S, and earlier this month unveiled a restructuring plan for its intimate apparel brand Gilly Hicks, saying it plans to close all of its stand-alone Gilly Hicks stores in the coming months.

Overall, Abercrombie reported a loss of $15.6 million, or 20 cents a share, compared with a year-earlier profit of $84 million, or $1.02 a share. Stripping out charges related to restructuring plans for Gilly Hicks, other store asset impairment charges, and charges related to the company's profit-improvement initiative, adjusted per-share earnings for the latest quarter were 52 cents.

Abercrombie earlier this month had forecast per-share earnings at the higher end of its downbeat August guidance of 40 cents to 45 cents a share.

Gross margin narrowed to 63% from 64.3%.

The company recently reported net sales fell 12% to $1.03 billion, below the $1.07 billion expected by analysts at that time. Total same-store sales for the quarter, including direct-to-consumer sales, dropped 14%, with U.S. same-store sales decreasing 14% and international same-store sales dropping 15%. Within the quarter, same-store sales were weakest in August and September, the company said Thursday.

Results for the 2012 quarter were restated to reflect a shift in the company's accounting method.

By brand, same-store sales including direct-to-consumer fell 13% for Abercrombie & Fitch, 4% for abercrombie kids and 16% for Hollister Co.

Abercrombie reiterated its recently reduced earnings outlook for the year.

Shares fell 2.5% to $34.10 in recent light premarket trading. Through Wednesday's close, the stock had fallen 27% since the start of the year.

Write to Anna Prior at anna.prior@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Abercrombie and Fitch (NYSE:ANF)
Historical Stock Chart
From Aug 2024 to Sep 2024 Click Here for more Abercrombie and Fitch Charts.
Abercrombie and Fitch (NYSE:ANF)
Historical Stock Chart
From Sep 2023 to Sep 2024 Click Here for more Abercrombie and Fitch Charts.