(Reuters) - American Eagle Outfitters Inc (N: AEO ) forecast holiday-quarter profit and comparable sales below market expectations on Wednesday, as the apparel retailer ramps up promotions to counter sluggish demand for its flagship AE brand. Shares of the Pittsburgh-based company fell about 7%, having lost about 22% so far this year. Stiff competition in the retail space has forced U.S. apparel makers, slower in offering latest fashion, to spend heavily on promotions to compete with fashion-forward brands from Target Corp (N: TGT ) and European players Zara (MC: ITX ) and H&M (ST: HMb ). Spain-based Zara said on Wednesday it expects like-for-like sales to rise 4% to 6% for the year, while Target last month posted a 10% growth in quarterly comparable sales in its apparel business.