The Abercrombie brand has seen higher demand this year after struggling for the past five years, as the company revamped stores, launched sophisticated designs and scrapped its famously risqué advertisements.

"We've done a couple of things, including rolling out our loyalty programs and investing in (Abercrombie) stores to improve conversion, and we have seen benefits there," Chief Financial Officer Scott Lipesky said on a conference call with analysts.

"However, they have not been able to offset the headwinds we're seeing in traffic," he said.

The remarks followed better-than-expected first-quarter results from the New Albany, Ohio-based retailer.

Both the Abercrombie and Hollister brands topped Wall Street expectations for same-store sales, while the company's overall sales rose 11 percent and its net loss was much smaller than expected.

"If you look at the fundamentals and you look at the financial results, they were better than expected and that's the bottom line," said BlueFin Research analyst Rebecca Duval.

Deutsche Bank analyst Tiffany Kanaga said results still fell well below the lofty expectations of some investors, triggering Friday's sell-off in Abercrombie's shares.

The stock, which has rallied some 37 percent this year, fell 8.3 percent to $21.86 (16.4 pounds) in afternoon trading.

Investors were looking for a high-single percentage digit increase in same-store sales, Kanaga said. Abercrombie's overall same-store sales rose 5 percent in the three months ended May 5.

The results also come a day after Abercrombie & Fitch Chief Executive Officer Fran Horowitz told Bloomberg in an interview that the threat of retaliatory tariffs on U.S. goods could be "one more thing to lose sleep on in this industry."

The Donald Trump administration on Friday imposed tariffs on steel and aluminium from Canada, Mexico and Europe on Thursday.

Abercrombie and fellow apparel company Levi Strauss were concerned ahead of threatened tit-for-tat tariffs from the EU, Canada and Mexico on U.S. goods such as jeans, Harley-Davidson motorcycles and bourbon, Bloomberg reported.

"It could be the tariff situation that is concerning the investors ... Obviously apparel retailers could be ultimately be affected because they import virtually everything," said Ken Perkins, founder of research firm Retail Metrics.

(Reporting by Uday Sampath and Aishwarya Venugopal in Bengaluru; Editing by Sai Sachin Ravikumar)

By Uday Sampath Kumar