Coach (COH) reported a disappointing decline in third-quarter sales on Tuesday as it continued to lose share of the North American handbag market.
Revenue for the three months ended March 29 declined 7% to $1.1 billion from $1.19 billion a year ago, missing the Street’s view of $1.13 billion.
Sales slid 21% in North America -- marking the fourth-straight quarter of declines -- as the luxury handbag maker suffered intensifying U.S. competition from rivals Kate Spade (KATE) and Michael Kors (KORS).
The New York-based designer reported net income of $191 million, or 68 cents a share, down from $239 million, or 84 cents, in the year-earlier period, though they topped average analyst estimates of 61 cents, according to a Thomson Reuters poll.
In a statement, Coach CEO Victor Luis blamed the results on weakness in its core North American women’s bag and accessories business, which he said was not offset by “strong growth” in men’s footwear and a 25% sales increase in China.
“Our business in North America remained challenging in the period, exacerbated by the weather and shift of the Easter holiday,” he said. “We experienced sharply lower traffic levels in our stores while our Internet results were impacted by our strategic decisions to eliminate third party events, as well as limit the access and invitations to our factory flash site.”
Shares of Coach fell 8.25% to $46.25 in early trade.
Luis tried to stem investor worries by saying the company remains confident in its “brand vision.”
The company in September will launch the first collection designed under new creative director, Stuart Vevers.