Purse and wallet seller Coach (COH) was plunging Tuesday as pressure from competitors such as Michael Kors (KORS) again weighed on its financials. More executive turnover only added to the unease around the New York retailer.
In recent trading, the stock, regularly a big mover post-earnings, was slumping 7.7% to $53.38. At about 90 minutes into trading, volume was already more than double an average full day.
Before items, Coach earned 89 cents a share in the fourth quarter, matching estimates. That was where the good news ended. Sales for the period, though up some 6% to $1.22 billion, were short of the $1.24 billion consensus forecast.
North American sales, covering Coach's biggest market by far, increased 6% to $825 million, but that was around $6 million shy of the Wall Street projection. International revenue of $386 million missed the expectation by about $10 million.
For fiscal year 2013, net sales rose 7% to $5.08 billion from $4.76 billion the prior year.
Coach, which is increasing its emphasis on men's goods, coats, shoes and accessories, was let down in the quarter by the product for which it's best known — women's bags. "While we maintained our outstanding profitability levels, we were not satisfied with our performance in the women's handbag and accessories category in North America," Lew Frankfort, chairman and CEO, said in a prepared statement.
Same-store sales fell 1.7%, far below the 0.8% projected gain carried on FactSet.
Meanwhile, changes anew came to the leadership, with two high-ranking executives leaving the company and marking the latest shift for Coach. Mike Tucci, president of the North American Group, and Jerry Stritzke, president and COO, are leaving the company at the end of next month. Earlier this year, long-time creative director Reed Krakoff set plans to depart when his contract ended, and Coach now says it has agreed to sell the business to a group Krakoff is leading. Frankfort also is exiting the CEO role next year and will be replaced by Victor Luis, president and chief commercial officer.
Stritzke joined Coach in March 2008, while Tucci had been with the company since January 2003.
Among other moves, Francine Della Badia, who oversees North America retail merchandising, planning and allocation, along with global men's and factory merchandising, will become president of North America retail.
In comments to Reuters, Frankfort downplayed the extent of the shake-up. "We agree there's a lot going on. We have a seasoned group of Coach veterans taking on these roles." Those remarks aside, taken together, the management retooling — both significant and in short order — clearly introduces uncertainty about the future strategy and market position at Coach. And investors know this.