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What: Shares of Abercrombie & Fitch Co. (NYSE:ANF) were taken to the cleaners today after the teen apparel retailer turned in a disappointing second-quarter earnings report.

So what: Comparable sales fell 7% at namesake Abercrombie stores and 2% at its sister chain Hollister, accounting for a 4% drop in overall comps. The company also stepped back from an earlier forecast of positive same-store sales growth this year. Total revenue also fell 4%, to $783.2 million, in line with estimates, while the company reported an adjusted per-share loss of $0.25, $0.05 worse than estimates.

CEO Arthur Martinez said that flagship and tourist locations accounted for the majority of comparable-sales declines, and said declining traffic "remained a significant headwind" in the quarter. Despite the current challenges, Martinez was optimistic, saying, "We are focusing on the right priorities and we expect to see traction in our business as we introduce new product and invest in marketing to drive awareness and relevance for our brands."

Now what: Like other teen apparel retailers and the overall apparel sector, Abercrombie has struggled in recent years. The company has been in the midst of a brand revamp, moving away from logoed clothing and sexy advertising, and that has produced mixed results. 

Abercrombie updated its full-year guidance, saying comparable sales would remain challenging through the second half of the year, and that it would close up to 60 stores in the U.S. through the end of the year as leases expire. The company did not update its EPS guidance, but analysts expect full-year profit to fall from $1.12 to $0.81. After today's report, that projection could easily go lower.

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