shares were down sharply after the company said earnings will fall short of analysts' expectations in the second half amid declining sales.
Shares of the Secaucus, N.J.-based company were down $5.10, or 31.6%, at $11.04 in premarket trading.
The children's apparel retailer expects break-even third-quarter results. Earnings in the fourth quarter will be "only slightly positive" if third-quarter trends continue, the company said. Analysts on average had expected earnings of 57 cents a share in the third quarter and 72 cents in the fourth quarter, according to Thomson/First Call.
Sales at stores open at least a year have fallen 30% for the month to date, and 22% so far in the quarter, the company said.
"While our latest fall line had initial positive customer response, sales fell off dramatically in September," Chief Executive Ezra Dabah said in a statement. Dabah cited overdesign of the merchandise, among other problems. Unseasonably warm weather, continued declines in mall traffic and the sluggish economy also hurt sales, the CEO said.