Urban Outfitters Inc. shares slid after the owner of the Anthropologie and Free People brands posted quarterly sales growth that came in below Wall Street’s expectations.

The shares fell as much as 12% in premarket trading in New York after the company reported Wednesday that comparable sales in its retail segment rose 2%, below analysts’ average estimate of 2.94%. Comparable sales at its core Urban Outfitters brand also came in below expectations.

Executives said on a call with analysts Wednesday that the company may have to add promotions and markdowns given the sales slowdown, which they expect to reduce gross margin.

Bloomberg Intelligence analysts Mary Ross Gilbert and Poonam Goyal said that sluggish sales could extend into the second half and will require more promotions, as customers across all brands choose lower-priced products.

Telsey Advisory Group analyst Dana Telsey cut her recommendation on the stock to market perform from outperform.