Women's apparel retailer Body Central Corp cut its second-quarter outlook, as the company resorted to heavy discounting to clear out piled-up inventory, sending its shares crashing nearly 40 percent.

Photo: Body Central

The mall-based retailer, which sells mostly to women in their late teens to early 20s, has been struggling to drive sales as it loses ground to rivals such as Forever 21, Charlotte Russe and Wet Seal Inc.

The company had warned of weak sales trends last month when it forecast bleak results for the quarter, sparking a sell-off that wiped out nearly half of its market value.

"Our second-quarter comparable sales remain soft and have not improved since April. We continue to diligently manage inventory and to take aggressive markdowns on slow moving items," CEO Allen Weinstein said in a statement on Monday.

Body Central cut its second-quarter earnings forecast to 19 to 21 cents per share from 26 to 28 cents per share.

The company now expects second-quarter net revenue of $77 million to $79 million. It previously expected $80 million to $82 million. Body Central expects same-store sales, or those at stores open at least a year, to fall 7 to 9 percent.

Shares of Body Central plunged to $9.68, their lowest ever level, in early trading on Monday on the Nasdaq.