But the problem goes beyond the sticker shock. Analysts like Lisa M. Walters, a principal at Retail Eye Partners, say Jeffries has also been a step behind fashion trends this year. "Fashion changed in the teen space," she says, shifting to more detailed, dressy items, "and they didn't change their fashions."

Jeffries, who declined to comment, is now taking action. Abercrombie has marked down items such as jeans and outerwear by 30% to 40%, trumpeting the discounts with e-mails to customers and clearance signs in store windows. "We are reacting to the current environment," he told investors in the Nov. 13 earnings call. Jeffries said he also plans to add lower-priced clothing, especially at Hollister, and has brought in trendier dresses and tops.