The inflated cost of cotton and the weak European economy resulted in dismal first-quarter results for Abercrombie & Fitch (NYSE:ANF). During morning trading, ANF shares plunged more than 11%.

On Wednesday, the casual apparel retailer reported a profit of about $3 million (3 cents per share), which is a fierce drop from last year’s results of $25 million (28 cents per share). However, revenues of $921 million were up about 10% from last year. Still, revenue results came in far below the Street’s expectations of around $952 million.

Mike Jeffries, Abercrombie & Fitch CEO and chairman, pins some of the blame for the lackluster results on sluggish sales in European markets.

“While we are disappointed that European sales trends remain challenging in a very difficult macroeconomic environment, we are largely satisfied with our overall performance for the quarter in that context,” Jeffries said in a press release.

The CEO then went on to explain why the company’s outlook may not be as bleak as it seems.

“Our U.S. business, including direct-to-consumer, increased 4% on a comparable basis, on top of a strong performance last year.  Our international business comped negatively, but the economics remain strong and we delivered overall international sales growth of 42% including a strong performance in direct-to-consumer.”

Jeffries also indicated that exorbitant rises in cotton costs hurt the company’s Q1 results. He said the brunt of those issues are now behind the company.

Abercrombie also increased its existing stock repurchase program by 10 million shares, raising the number of authorized shares available to 12.9 million.