Coach's Stock Drops After Sales Fall More Than Expected

Coach Inc. shares dropped 5.5% in premarket trade Tuesday, after the luxury apparel seller topped fiscal third-quarter profit expectations, but missed on sales. Earnings for the quarter ended March fell to $88.1 million, or 32 cents a share, from $190.7 million, or 68 cents a share, in the same period a year ago. Excluding non-recurring items, such as restructuring-related charges, adjusted earnings per share were 36 cents, beating the FactSet consensus of 35 cents. Sales fell 15% to $929.3 million, missing the FactSet consensus of $950 million, with unfavorable currency movements reducing sales by 3%. U.S. sales declined 24%, and same-store sales dropped 23%, more than the FactSet consensus for a decline of 22%. "We are pleased with our third-quarter performance which was consistent with our plan and annual guidance despite the increased negative impact of foreign exchange on our top-line results," said Chief Executive Victor Luis. The stock has climbed 13% year to date, while the S&P 500 has gained 2.4%.