Abercrombie & Fitch Co reported a quarterly loss as sliding sales, higher markdowns and increased costs weighed on the teen-apparel retailer.

The operator of the Abercrombie & Fitch, abercrombie for kids and the surf-inspired Hollister chains said, however, it remained on track with its international expansion plans.

Its shares were up $1.54, or 4.7 percent, at $34.50 in trading before the opening bell.

The retailer recorded a net loss of $26.7 million, or 30 cents a share, compared with a net profit of $77.8 million, or 87 cents a share, a year earlier.

As recently as a year ago, Abercrombie was the most popular clothing store in the mall among teens and college-age students, but as the downturn deepened, rivals with cheaper prices such as Aeropostale and Forever 21 cut into market share.

Revenue fell 23 percent to $648.5 million. Comparable-store sales fell 30 percent in the quarter, hurt by double-digit declines at all chains.

Abercrombie has been known for the higher prices on its clothing when compared with rivals like American Eagle Outfitters Inc .

But the company -- which long defended its higher-price cachet -- has slowly begun to discount or lower the starting ticket prices on some items to address the consumer aversion to high prices in the downturn.

In the quarter, gross profit came in at 66.5 percent, 3.60 percentage points lower than the year-ago period. Abercrombie blamed a higher markdown rate for the fall in gross profit.

Earlier this month, Abercrombie posted a 28 percent same-store sales decline for the month of July.

The company was also hurt by higher rent, depreciation and other occupancy costs as well as $23 million of net lease termination related costs associated with the winding down of its RUEHL chain.

Investor interest in the stock -- which has fallen about 39 percent in the past year -- has been negative, but the company's international expansion opportunity is often cited by analysts as a long-term growth driver.

Besides its U.S. stores in the United States, which number more than a thousand, the company operates a handful of stores in Canada and a flagship Abercrombie & Fitch store in London.

The company said it remained on track to open three international flagship stores in fiscal 2009, including two stores in Milan and one outlet in Tokyo.

Abercrombie also remains on track to open 10 mall-based stores in the period, including one Abercrombie store in Canada and seven Hollister stores in Britain. It also plans to open one Hollister mall-based store in Germany and one in Italy.

(Reporting by Dhanya Skariachan in Bangalore, additional reporting by Alexandria Sage; Editing by Derek Caney and Steve Orlofsky)