Shares of Abercrombie & Fitch (ANF) tumbled almost 7% in Wednesday pre-market trading after the youth-oriented apparel retailer said it would shut down a chain of shops selling its lingerie brand.
The company will close every location in its Gilly Hicks chain. Gilly Hicks’s apparel will be sold at its Hollister outlets going forward. Abercrombie will take a charge of between $90 million and $100 million during the third quarter due to the store closings, Reuters notes.
During the third quarter, Abercrombie said same-store sales dropped by 14%. Overall sales declined to $1.03 billion, down 12% from the same period last year. That fell short of the $1.07 billion in sales Wall Street was looking for.
Abercrombie also cut its earnings guidance for the year. It had previously said it expected an annual profit between $3.15 and $3.25 per share. Now it estimates full-year earnings at a range of just $1.40 to $1.50 a share.
The company’s shares have seen their value slide in recent months due to shifting clothing tastes among teens.