Abercrombie & Fitch same-store sales fall 10%

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Abercrombie & Fitch reported comparable sales and profit far below Wall Street expectations on Thursday, blaming a drop in store visits by shoppers, and the teen retailer said business will decline even more during the current back-to-school quarter.

The company said comparable sales, which include online sales and sales at stores open at least a year, fell 10 percent in the second quarter, ended Aug. 3. Analysts had expected a drop of just 2.5 percent.

Abercrombie also issued a weak profit forecast, and its shares tumbled 20 percent at one point Thursday. (Click here for the latest quote.)

The company and rivals Aeropostale and American Eagle Outfitters have struggled as young shoppers appear less interested in their logo-centric clothes and more eager to shop for electronics or go to chains like Zara, Forever 21 and H&M that offer greater variety in apparel more quickly.

"One generation of customers has moved on and the next generation doesn't see Abercrombie as cool," said Erik Gordon, a professor at the University of Michigan's Ross School of Business.

On the company's earnings conference call, CEO Mike Jeffries attributed much of its weakness to macro conditions.

"While the consumer seems to be recovering, that is less true of the young population," Jeffries said. "Youth spending has likely diverted to other categories. We expect these effects will abate at some point."

The drop in business in the second quarter was felt most acutely at Abercrombie's Hollister chain, its largest, where comparable sales fell 13 percent. At its name-sake chain, comparable sales were down 6 percent.

The company saw a bright spot in Asia. Comparable same-store sales were up 60 percent in China, Jeffries said.

In May, Abercrombie blamed poor sales in the first quarter on its inability to get enough merchandise on shelves fast enough, and forecast only a small decline for the second quarter.

Overall, revenue in the second quarter fell 1 percent to $945.7 million, well below the $996.2 million analysts expected. The one bright spot was international revenue, which rose 15 percent.

Abercrombie expects a profit of 40 cents to 45 cents a share for the third quarter, while analysts anticipated $1.06. The company said it would not give projections beyond that, citing uncertainty around recent customer traffic trends.

For the second quarter, the company said net income fell to $11.4 million, or 14 cents per share, from $17.1 million, or 20 cents per share, a year earlier.

Excluding items related to a project to lift profits, earnings were 16 cents per share, well below Wall Street forecasts for 28 cents.

Aeropostale is due to report quarterly results after the market close. American Eagle reported on Wednesday, issuing a weak forecast.

—By Reuters with CNBC.com.