The shares of Coach Inc (NYSE:COH) closed $34 per share, down by nearly 6% after reporting quarterly earnings that missed the consensus estimates of Wall Street analysts.
Coach Inc (NYSE:COH) reported that its net income was $119 million or $0.43 in earnings per share for the quarter that ended September 27. Its net income declined 44% from its $218 million net income of $0.77 in earnings per share in the same period a year ago.
During the period, Coach Inc (NYSE:COH) said its revenue declined 10% from $1.15 billion to $1.04 billion.
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Wall Street analysts expected the company to report $0.45 in earnings per share on $1 billion revenue.
Coach North American handbag business
According to Victor Luis, chief executive officer of Coach Inc (NYSE:COH), the company’s North American handbag business offset its continued international growth. He added that the company made progress on its transformation plan to address brand challenges and bring greater fashion relevance to Coach.
“While we recognize that our many initiatives will take time to be evidenced in our financial results, our performance to date has been on plan, and we are confident we have the creative direction, team and resources to execute our brand transformation,” said Luis.
Coach Inc (NYSE:COH) said the sales of its North American handbag business dropped 19% to $634 million during the quarter. Its international segment achieved a 4% sales increase to $381 million.
The company recorded $37 million in charges related to its multi-year transformation plan during the quarter. Coach Inc (NYSE:COH) said the charges organizational efficiency costs and accelerated depreciation related to store closures and upgrades closures.
Coach fashion credibility
Last month, Coach Inc (NYSE:COH) launched Stuart’s inaugural collection, which helps boost the company’s fashion credibility in combination with its Spring 2015 New York fashion Week presentation.
Luis said, “Our layered and targeted marketing campaigns are also creating buzz and excitement around the brand. We’re particularly pleased to be opening our first modern luxury retail stores in several key global locations starting with Tokyo, Beverly Hills and New York in the weeks to come.”
He added, “We remain confident in our plan to reinvigorate long-term sustainable growth and realize our vision for global, modern luxury.”