Coach (NYSE:TPR) failed to impress Wall Street this morning in reporting lower-than-expected results for its fiscal second quarter. The handbags and accessories retailer posted a profit of $297.4 million, or $1.06 per share, for the period ending Dec. 28, 2013. That compares to analyst expectations for earnings per share of $1.11.
Coach's second-quarter revenue of $1.42 billion marked a 6% decline from the $1.5 billion the retailer earned a year ago.
This was Coach's first earnings report since selecting Victor Luis as its new chief executive. Luis said in a press release that weak sales in North America offset much of the brand's success in Asian and European markets during the second quarter. Same-store-sales in North America fell 13.6% for that three-month period, which is especially worrisome because the region accounts for as much as 70% of Coach's annual revenue. International sales were up 11% when removing the impact of foreign currency exchange rates.
Shares of Coach were down nearly 6% in early trading on the news. Looking ahead, Coach will likely spend most of 2014 trying to catch up to high-flying rival Michael Kors. Ultimately, investors need to be patient with this turnaround story. Coach is in the midst of reinventing itself as a "lifestyle brand," which isn't something that happens overnight.
-- Material from The Associated Press was used in this report.