Coach Plunges 16% on 4Q Miss, Trouble in North America

Wall Street slammed Coach (NYSE:COH) on Wednesday, sending the handbag maker’s stock plunging 16% after it disclosed a weaker-than-expected 1.5% rise in fourth-quarter profits amid slowing North American sales.

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Coach said it earned $352.8 million, or $1.23 a share, last quarter, compared with a profit of $347.5 million, or $1.18 a share, a year earlier. Analysts had been calling for $1.28 a share.

Revenue rose 3.8% to $1.5 billion, but that missed the Street’s view of $1.6 billion. Gross margins were unchanged at 72.2%.

“We were disappointed by our performance in North America, where the holiday season proved challenging,” CEO Lew Frankfort said in a statement. “Most broadly, the consumer was impacted by a muted macroeconomic environment, while in the women’s handbag category competition intensified and promotional activity increased.”

Coach said its total North American sales ticked up just 1% to $1.08 billion as same-store sales dropped 2%. Direct sales on the continent were up 2% and Coach said shipments in department stores dropped.

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