Abercrombie full-price strategy proving a hard sell

On Thursday, Abercrombie warned its fourth-quarter profit would fall significantly short of its own forecasts after reporting December same-store sales fell 24 percent.

That made the company the worst sales performer in December out of 35 companies whose results are tracked by Thomson Reuters.

SHARES AMONG MOST BATTERED

The New Albany, Ohio-based company has posted double-digit same-store sales declines since August, including a 28 percent drop in November at the start of the holiday shopping season.

Abercrombie's shares trade close to $21, down from a high of more than $82 hit in February.

They are also down 70 percent from a year ago, compared with declines of 44 percent at American Eagle Outfitters and 25 percent at Aeropostale.

"It's certainly hurting them in the short term, as you can tell," said Ken Perkins, president of retail research firm Retail Metrics.

Chief Executive Mike Jeffries, on a November conference call with analysts, defended the company's stance. He said promotions would not be used to drive sales and markdowns would be used only to clear through end-of-season items.

"It is clear to us that the short-term relief provided by the use of promotions is more than offset by the damage inflicted on the brand in the long-term," he said. "Promotions are a short-term solution with dreadful long-term effects."