Apparel retailer J Crew Group Inc has slashed its fourth quarter and full year earnings outlook on worse than expected sales and margins over the holiday period.

The company now expects to post a quarterly loss of $0.24 to $0.29 per share, down from its earlier guidance for earnings of $0.05 to $0.10 per share. This compares to $0.39 per share in the same period of the prior year.

The figures are based on same-store sales in the negative mid teen range and direct sales in the negative mid-to-high single digit range.

For fiscal 2008, J Crew forecasts diluted earnings per share in the range of $0.77 to $0.82, down from earlier guidance of $1.11 to $1.16 and fiscal 2007 earnings per share of $1.52.

The company, which operates 227 retail stores and 74 factory outlet stores, blames "aggressive inventory actions taken to clear autumn and holiday inventory during the fourth quarter."