Image source: Coach.

It's been a rough couple of years for Coach (TPR -1.63%) investors, but they got a break last week after a better-than-expected quarterly report sent the stock 14% higher. The luxury handbag maker came through with its first period of year-over-year growth in more than two years, and that was enough to get some Wall Street pros (and a lot of investors) interested in Coach again. 

It's not exactly a fair comparison. Net sales climbed 4% to $1.27 billion during the holiday quarter since the prior year's fiscal second quarter, up 7% on a constant-currency basis. Coach had posted nine consecutive quarters of year-over-year declines before last week's turnaround, according to S&P Capital IQ data.

Unfortunately for Coach, the growth doesn't hold up on an apples-to-apples basis. Net sales for the Coach brand -- accounting for 93% of the company's business --  actually declined by 3%. Net sales took an even bigger hit closer to home, with North American brand sales for Coach falling 7% on a reported basis. 

The reason for the disparity -- the growth in overall sales and the decline in Coach -- is that the company recently acquired high-end shoe designer Stuart Weitzman. Those sales didn't exist on Coach's books a year ago. Wall Street's celebrating the bounce, but the cold and ugly truth is that this is the 10th quarter in a row of year-over-year declines for the Coach brand. 

It's not the only thing that isn't going Coach's way. Gross margins haven't been this low in more than a decade. Coach's operating profit is also slipping, sliced in half since peaking nearly three years ago. 

It's not just Coach that's in a funk. Michael Kors (CPRI -3.60%) initially bucked the weakness at Coach, and many argued that it was a beneficiary of fashion trends shifting away from Coach. However, the once-heady growth at Michael Kors has decelerated sharply. It's coming off of back-to-back quarters of year-over-year percentage growth in the single digits, and analysts see that growth continuing to decelerate when Michael Kors reports financial results for the holiday quarter tomorrow morning. 

Combine the slight projected growth at Michael Kors and the slight decline in Coach brand sale and we're looking at flat holiday sales relative to the prior year for the two leading luxury handbag makers. This isn't where either company wants to be, but the market still rallied behind Coach last week.

Coach products may not be very popular these days, and the same can be said about the stock despite last week's bounce. We're seeing Coach now fetch a forward earnings multiple in the high teens. That may not seem cheap given its recent slump, but with a 3.6% yield rate keeping income investors patient and close, it could be the right price if the flagship brand's unfortunate streak of net sales declines comes to an end in the coming quarters.