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Aeropostale holiday sales fall, slashes 4Q outlook

NEW YORK (AP) -- Aeropostale's stock dropped more than 10 percent in premarket trading Thursday after the teen retailer reported that sales for the holiday shopping season declined. The chain slashed its fourth-quarter earnings forecast as well.

Sales from November through December can make up 40 percent of a retailer's revenue for the year, making it the most crucial period on the calendar.

Aeropostale's total revenue for the nine-week period ended Dec. 29 fell 6 percent to $645 million.

Revenue at stores open at least a year, including online results, dropped 8 percent. Excluding online sales, that revenue declined 9 percent.

Analyst follow comparable store sales closely because the figure strips away volatility that typically comes with newly opened or closed locations, providing a more accurate picture of a retailer's health.

CEO Thomas Johnson said that Aeropostale had a strong Black Friday weekend, but sales and traffic in its stores dropped off significantly in December.

The company now foresees fourth-quarter earnings between approximately 20 cents and 24 cents per share. Its prior guidance was for earnings in a range of about 36 cents to 41 cents per share.

Analysts surveyed by FactSet expect earnings of 40 cents per share.

Shares of Aeropostale dropped $1.42, or 10.6 percent, to $11.95 before the market open.

The chain expects to report its fourth-quarter and full-year financial results on March 14.

Aeropostale wasn't the only retailer reporting tepid holiday sales.

Tiffany & Co., the luxury retailer that had largely escaped the rough patch others had experienced during the economic downturn, saw shares slide 8 percent on weak holiday sales.