Coach shares tumbled by more than 7% in pre-market trading on Tuesday after the company reported a miss on sales and closures of North American stores.
In the third quarter, the New York-based luxury fashion company reported adjusted earnings per share of $US0.36, beating the estimate of $US0.35, according to Bloomberg.
In the quarter, Coach posted sales of $US929.3 million, below the estimate of $US950.6 million.
The real ugly news came from the company’s North America segment, where sales fell 24% to $US493 million, from $US648 million last year. Comparable store sales in the region fell 23%.
CEO Victor Luis said in the earnings statement: “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. As was the case in our second quarter, we drove sequential improvement in our North America bricks and mortar business while further reducing our eOutlet events.
The company said it incurred costs of $US23 million under its “multi-year transformation plan” that includes renovations, and lease terminations related to store closures.
“During the last quarter, we also took significant action towards fleet optimization, closing a total of 43 retail stores and 12 outlet stores in North America, taking us to 56 and 13 closures, respectively for these channels year-to-date,” Luis said.