By Dhirendra Tripathi

Investing.com – Abercrombie & Fitch Company (NYSE:) stock slumped 14% Tuesday as its profitability declined in the three months ended October 30 and the retailer warned of production and delivery delays and elevated costs in the ongoing quarter.

Analysts had expected better prospects at the beginning of the holiday season, but the prospect of further reopenings and return to work also weighed on the mood for casual wear retailer.

Supply chain costs eroded the company’s gross profit rate in the third quarter by 30 basis points year-on-year to around 64%. It attributed this to increased freight costs and attempts to mitigate supply chain problems.

The company’s board approved a share repurchase of $500 million but that did little to slow the fall in the stock price.

Digital net sales increased 8% over the previous year. They contributed 46% to total third-quarter sales of $905million, an increase of 10%.

Fran Horowitz, Chief Executive Officer said that the Holiday Season has started promisingly and customers are coming out in early shopping to buy.

Profit per share beats estimates by 86c