The angst continues at teen retailer

American Eagle Outfitters

(AEOS)

, which reported a huge drop in October same-store sales after the bell Tuesday and warned that third-quarter earnings would be below analysts' expectations.

The manufacturer of clothing for 20-somethings said consolidated same-store sales tumbled 18.1% in October. Sales at its American Eagle stores dropped 18.7%, while total sales fell 8.3% to $96.1 million.

"Clearly, October was very disappointing and our sales results were significantly below plan," a company spokeswoman said on a recorded call. "Our business was negatively affected by less promotional activity as well as lighter inventory levels in certain categories compared to last year."

The retailer also said that unseasonably warm weather had negative impact on an outerwear sale.

American Eagle said it now expects to earn between 22 cents and 24 cents a share in the third quarter, before a goodwill charge of 11 cents a share for its struggling Canadian subsidiary, Bluenotes. Analysts were expecting 28 cents a share, according to Thomson First Call.

The company's shares

got a brief lift on Tuesday after Prudential upgraded them to overweight from neutral, saying that the teen marketer had the potential to be "less bad" going forward, and that management departures could be forthcoming.

On Tuesday, the company named Jim O'Donnell sole chief executive. He had shared the position with Roger Markfield, who will become head of merchandising, design, production, and marketing. American Eagle said it was "strengthening our organization and redirecting our best talent to the appropriate business functions," but some analysts require more convincing.

"The stated intention is to better focus the company's management talent to functions where it is best suited," said Dawn Stoner, an analyst at Pacific Growth Equities, in a note. "But we seek greater clarity as to the new management structure at American Eagle to better assess how the company's execution might be improved as a result of these changes." (Pacific Growth does not do banking with American Eagle.)

Stoner expects AEOS' November same-store sales to be under continued pressure. "Our estimate calls for same-store sales to decline 10% on a consolidated basis, assuming a low double-digit decrease at American Eagle stores and a high single-digit decline at Bluenotes," she said.

After tumbling earlier, the shares were lately down 32 cents, or 2%, to $15.25. They are down 32% from a 52-week high.