Coach (NYSE: COH) shares tumbled by more than 6 percent after the company reported Wednesday that North American same-store sales plunged 13.6 percent in the most recent quarter, the worst on record since 2000. The leather-goods company said tougher competition and declining store traffic were to blame for the dismal results.
North American sales fell 9 percent to $983 million in the second quarter ended Dec. 28. Overall revenue fell 5.6 percent to $1.42 billion, while net income fell to $297.4 million, or $1.06 per share, from $352.8 million, or $1.23 per share, a year earlier. Analysts on average had expected earnings of $1.11 per share on revenue of $1.48 billion.
North American same-store sales plunged 13.6% last quarter, compared with a 6.8% decline in the first quarter and marking the third-straight decelerating quarter. It was also the first double-digit decline since the economic collapse in December 2008.
"We continued to be disappointed by our performance in North America, which was impacted by substantially lower traffic in our stores and by our decision to limit access to our e-factory flash sales site," Chief Executive Victor Luis said in a statement on Wednesday.
Growing competition from rivals Michael Kors, Tory Burch and Kate Spade have eaten away at Coach's market share. Coach also has been in the midst of a major management transition, with Luis's succession to CEO and the departures of its North American group president and COO in July. The retailer also parted ways last year with its executive creative director, Reed Krakoff.
Coach predicted in October that same-store sales in North America would fall by "high single digits" in percentage terms through the end of its fiscal year ending June.
Shares of Coach dropped 7.61% to $48.55 in premarket trading on Wednesday.
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