"The customer clearly has an appetite for value pricing right now, and we have redoubled our efforts to provide and promote exceptional savings throughout the store," said Linda M. Farthing, president and ceo. "The negative impact on gross margin will be significant in the fourth quarter, but these actions are necessary in order to exit the year without the burden of prior season merchandise."

Meanwhile, The Wet Seal Inc. posted a loss of $3.3 million, or 4 cents a diluted share, which compares with a profit of $2.4 million, or 2 cents, in the year-ago period. Sales for the quarter rose 5 percent to $150.3 million from $143.3 million, while total same-store sales fell 3.4 percent.

One highlight of Thursday's earnings reports was Zumiez Inc., which concluded its third quarter with an earnings increase of 19.4 percent. The company reported quarterly earnings of $8.1 million, or 28 cents a diluted share, versus $6.8 million, or 24 cents. Sales increased to $104 million, up 26.5 percent, from $82.3 million during the third quarter last year. Same-store sales for the period increased 13.2 percent.