Shares of Abercrombie & Fitch (ANF) dropped in morning trading after two analysts downgraded the retailer, voicing concerns about the company's ongoing turnaround efforts and the competitive landscape facing those marketing products to teens.

TURNAROUND EFFORTS SLOWER THAN EXPECTED: Jefferies analyst Randal Konik this morning downgraded Abercrombie & Fitch to Hold from Buy and lowered his price target for shares to $13 from $24. In a note to clients, Konik said internal turnaround efforts are progressing slower than expected and not showing in top-line results. Konik also commented that international headwinds have been "unrelenting" and he does not see these trends reversing in the near-term.

CONSENSUS ESTIMATES HAVE FURTHER DOWNSIDE: Oppenheimer analyst Anna Andreeva also downgraded Abercrombie & Fitch this morning, lowering her rating to Underperform from Perform. In a note to clients, Andreeva said consensus estimates have further downside as the brands "remain in transition amidst increasingly more competitive teen landscape." Additionally, the analyst noted that the company's international profitability continues to erode while balance sheet concerns continue to mount. In the competitive teen environment, Andreeva commented that while Abercrombie's overlap with Aeropostale (AROPQ) comes down slightly with the remaining 100 Aeropostale doors closing, peer American Eagle Outfitters (AEO) is expected to benefit "more." Andreeva also noted that her 2017 earnings per share estimate for Abercrombie is 8c versus the Street at 23c.

RECENT EARNINGS: In November, Abercrombie & Fitch posted its third consecutive quarter of declining same-store sales. At the time, Executive Chairman Arthur Martinez said the "challenges of the brand are deep and longstanding," adding that "all of this is complicated by a very challenging environment." Mall-based retailers like Abercrombie & Fitch have been hurt by the increasing popularity of fast-fashion retailers like Zara, Forever 21 and H&M, as well as an increase in online shopping. Abercrombie said in November that it expects fourth quarter SSS to be "challenging," but "modestly improved" from the third quarter.

PRICE ACTION: Abercrombie & Fitch is down fractionally in early trading at $11.95, off its low of $11.52 set near the opening bell.

OTHERS TO WATCH: Abercrombie & Fitch competitors, including Gap (GPS), American Eagle and Urban Outfitters (URBN), are trading higher this morning.