The teen retailer also said it had gotten off to a strong start to the holiday season, with a 10% rise in same-store sales on the two days following Thanksgiving. Aeropostale said it expects earnings to come in at $1.20 to $1.24 for the key fourth quarter.

Aeropostale said same-store sales, or sales at stores open at least a year, rose 7% in the four weeks ended Nov. 28, with total net sales rising 14%, to $228 million. The same-store sales missed the 7.7% average increase analysts expected.

Sales at U.S. stores open at least a year rose 3 percent at Aeropostale, the U.S. teen retailer with more than 900 stores, trailing the 14 percent average of analysts' estimates compiled by Retail Metrics Inc. Comparable-store sales at American Eagle fell 5 percent, missing a 2 percent projected gain. Sales at Limited, the owner of the Victoria's Secret chain, dropped 4 percent, more than the 3.1 percent estimated decline.

October is a transitional month between the two largest selling seasons of the year: back-to-school and Christmas. U.S. retailers use the month to clear out fall merchandise and make room for holiday floor sets, according to Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics. "The teen apparel space was the biggest disappointment," Perkins said today in a telephone interview.

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Aeropostale, based in New York, fell $5.21, or 14 percent, to $32.82 at 11:29 a.m. in New York Stock Exchange composite trading. Pittsburgh-based American Eagle dropped $2.02, or 11 percent, to $15.84. Limited, of Columbus, Ohio, lost 8 cents to $17.70. Some department stores fared better than the specialty retailers. TJX Cos. and Ross Stores Inc., which both sell designer goods at discounted prices, reported sales gains. Chains including Saks Inc. and Nordstrom Inc. reported sales that topped estimates.

Net income fell to 14 cents a share from 29 cents a year earlier, the Pittsburgh-based company said today in a statement. The retailer said Aug. 6 that earnings would be 16 cents. Profit excluding a tax benefit was 12 cents a share. Analysts predicted 15 cents, the average of estimates compiled by Bloomberg.

Sales at stores open at least a year dropped 10 percent in the three months ended Aug. 1, the company reiterated. Aeropostale Inc., the mall-based teen retailer that sells clothes at low prices, reported last week that comparable-store sales advanced 12 percent in that period as young shoppers sought bargains.

Aeropostale Inc.'s recent sales growth is a function of fashion, not pricing. That's the message that Julian Geiger, chairman and chief executive officer of the New York-based teen specialty store chain, delivered in remarks following an upbeat annual meeting at its headquarters Thursday. "Lots and lots of people are talking price point," he told WWD. "In my mind that is secondary. The young customer is very smart." Aeropostale's core customers — who average between the ages of 14 and 17 — are also "turned off" by brands they see as "arrogant and fake."

The same genuine feeling that lifted the chain to sales of $1.89 billion last year — as well as to same-store sales increases of 19 percent in May and 20 percent in April — is expected to help the company's new P.S. concept, aimed at seven- to 12-year-olds, establish a niche in children's wear. Geiger expects to expand P.S. into a 500-store chain over the course of 10 years and, in the more immediate future, anticipates Aeropostale growing to 1,100 units from 914.

This spring, spending by teenagers, a closely studied but rarely understood segment of the population, is off by 14 percent, a direct reflection of the economy, according to a report this month by the investment bank Piper Jaffray. And that is having a profound effect on an already unraveling mall culture, where deep discounters and stores known for heavy promotions are suddenly the popular destinations and aspirational brands are struggling to fit in.

Teenagers are noticing. "Labels are becoming less and less of a priority for people throughout my school," said Chelsea Orcutt, 17, a senior at the Mount Saint Mary Academy near Buffalo, where the Walden Galleria shopping center includes all of the above-mentioned stores, plus many more options for teenagers who favor a sunny West Coast surfer style or those who prefer a goth ensemble to highlight their black nail polish and lipstick. Ms. Orcutt, a bit less casual in her personal style, favors Macy's, Old Navy and American Eagle, which, she pointed out, keep teen budgets in mind.

"Labels and designer purses -- I'm not seeing them as frequently," said Ms. Orcutt, who had participated in a survey on teen spending for the Hearst Magazines network of Web sites and was approached to speak about the subject for this article. When asked why that might be, she replied, without hesitation, "because of the crisis."

During years of rampant consumerism, where teenagers shopped was often more closely tied to what was happening in the pages of US Weekly or InStyle than their families' financial circumstances. Empires like Abercrombie & Fitch were built on the premise that their products, even $80 jeans and $30 T-shirts with provocative graphics, would be perceived as luxury items if they were sold in the right way. But as teenagers' priorities rapidly shift away from brands they now perceive as too expensive, the pecking order of mall stores has changed.

Needham & Co analyst Christine Chen said some investors cashed in gains, while others might have been initially wary of Aeropostale's first-quarter outlook, which included charges from the closure of its small "Jimmy 'Z" chain.

Aeropostale, whose stylized "A" graces the T-shirts of many a teenage American boy and girl, has taken market share from rivals at its main chain of some 900 stores as teens and their price-conscious parents gravitate to lower-cost casual fashions in a deepening recession.

Hoping to capitalize on that bargain-hunting, Aeropostale plans to launch a new children's store, P.S. from Aeropostale, in June, with an online launch soon after. The new chain will target kids of ages 7 to 12 and its first stores will open in the New York City area.