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.
Fool contributor Tamara Rutter has no position in any stocks mentioned. The Motley Fool recommends Coach. The Motley Fool owns shares of Coach. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.