Many teen retailers reported a decline in a key sales comparison in November, as strong sales after Thanksgiving were not enough to offset a weak start to the month.
American Eagle Outfitters Inc. was one of the better performers in the sector. It reported sales in stores open at least one year fell 2 percent, compared with the 1.9 percent analysts were expecting.
Stifel Nicolaus analyst Richard Jaffe said in a note to investors that planned promotions, such as offering hoodies for $20, helped increase traffic.
"Markdowns were well controlled leading to increased merchandise margins for the month," he added.
Shares of American Eagle rose 45 cents, or 3 percent to $15.70 during midday trading. The stock has traded between $8.31 and $19.86 over the past year.
Meanwhile, Abercrombie & Fitch reported sales in stores open at least one year fell 17 percent, a bigger miss than the 9.3 percent analysts expected. The company has lost market share to lower-priced rivals such as Aeropostale amid the recession.
Shares fell $2.88, or 7.2 percent, to $37.02 during midday trading. The stock has traded between $16.95 and $42.31 over the past year.
Aeropostale Inc. shares slid as well, after the teen apparel retailer offered a disappointing fourth-quarter outlook.
Several analysts worried that the company's winning streak may be waning.
"How much longer can it last," asked Jefferies & Co. analyst Randal J. Konik said in a note to investors.
"Sales and margins compar(isons) are going to get tougher, and key competitors American Eagle and Abercrombie are lowering prices to compete better."
He was one of several analysts to cut the stock's target price, reducing his to $35 from $49.
Shares fell $3.69, or 11.3 percent, to $29.01 during midday trading. The stock has traded between $16.17 and $44.85 over the past year.