A visual from Abercrombie's new marketing campaign.

Turnaround plans in the third quarter got much harder for Abercrombie & Fitch Co.

The retailer missed Wall Street’s adjusted earnings per share consensus estimate by 19 cents, as well as revenue expectations by $8.9 million.

Investors weren’t happy, sending shares down 12.5 percent in early-morning trading on the Big Board. The shares were trading in the $14.80 range at 10:13 a.m.

Abercrombie on Friday posted net income of just $7.9 million, or 12 cents a diluted share, versus net income of $41.9 million, or 60 cents, a year ago. On an adjusted basis excluding one-time gains, EPS was 2 cents. Net sales slipped 6.5 percent to $821.7 million from $878.6 million, with total comparable-store sales down 6 percent. For the quarter, they were flat at Hollister, but down 14 percent at Abercrombie.

Wall Street was expecting 21 cents on revenues of $830.6 million.

Arthur Martinez, executive chairman, said, “As expected, our third quarter was challenging. While Hollister improved sequentially, it was less than offset by disappointing performance in A&F. On a total company basis, conversion trends remained positive across both channels and the direct-to-consumer business grew domestically and internationally. In addition, we remained disciplined as expense and inventory were well controlled.”

Martinez said the comparable sales trend improved at Hollister throughout the quarter and he said the company expects that to continue in the fourth quarter.

At the core Abercrombie & Fitch business, flagship and tourist locations “continued to be a major headwind. In addition, chain-store traffic patterns remained negative,” the executive chairman said. He explained that the weakness was compounded by underperformance of seasonal categories, which led to pressure on gross margin. He said that the company expects the business to remain challenging through the balance of the fiscal year.

The company said direct-to-consumer and omnichannel sales grew to 23 percent of total company net sales for the quarter, versus 21 percent in the same year-ago quarter.

Separately, the company will close its A&F flagship in Seoul in January. And at the end of the third quarter, the company said it exercised a lease kick-out option for its A&F flagship in Hong Kong. It expects to incur a lease termination charge of $16 million in the fourth quarter.

For the fourth quarter, the company said it expects comps to be challenging, but “modestly improved” from the third quarter.

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