NEW YORK, United States — Coach Inc., the largest U.S. luxury handbag maker, fell in early trading after posting third-quarter sales at its established North American stores that plunged 21 percent amid increased competition and bad weather.
The sales decline at stores open at least a year in the quarter ended March 29 was steeper than the 15 percent slide analysts projected and worse than the 14 percent drop during the holiday quarter.
U.S. retailers of all stripes have been hampered by repeated winter storms and weak store traffic, while Coach also faces stepped-up competition in the handbag segment from the likes of Michael Kors Holdings Ltd. Coach’s total third-quarter revenue fell 7.4 percent to $1.1 billion.
The shares tumbled as much as 5 percent to $47.90 in early trading in New York. Coach slid 10 percent this year through yesterday, compared with a 1.1 percent gain for the Standard & Poor’s 500 Index.
Third-quarter net income dropped 20 percent to $190.7 million, or 68 cents a share, from $238.9 million, or 84 cents, a year earlier, New York-based Coach said today in a statement. The average of 33 analysts’ estimates compiled by Bloomberg was 61 cents.
By Cotten Timberlake; Editors: Nick Turner, Kevin Orland, James Callan