(Reuters) -American Eagle Outfitters ( AEO ) cut its target for annual comparable sales growth on Wednesday, in signs that apparel demand could be erratic during the holiday shopping season, sending its shares down 13% in extended trade.

Competition has heated up in the apparel space as companies vie for shoppers who are being cautious about their non-essential spending, with a focus on fresh styles and nifty marketing.

While some apparel companies, including Gap and Abercrombie & Fitch, have benefited from demand for their popular casual wear styles, a holiday shopping season marked by discerning shoppers and high promotions has forced most retailers to be cautious about their expectations in the key sales period.

"Key selling periods have seen a positive customer response, yet we remain cognizant of potential choppiness during non-peak periods," said CEO Jay Schottenstein.

The Aerie parent now expects annual comparable sales growth of about 3%, compared with prior expectations for a roughly 4% rise.

Unusually warmer weather in the U.S. also hit apparel sales during the third quarter, while higher discounts also weighed on margins for the company.

American Eagle reported quarterly revenue of $1.29 billion, compared with estimates of $1.30 billion, as per data compiled by LSEG.

The company also recorded an $18 million impairment and restructuring charge as it looks to cut costs, and said it had changed its Hong Kong retail operation from company-owned to a licensed model.

Excluding items, the company earned a profit of 48 cents per share, ahead of the 46 cents expected by analysts.