Coach is getting crushed after announcing a sales miss and store closures

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REUTERS/Fred Prouser

Coach shares tumbled by more than 7% in pre-market trading on Tuesday after the company reported a miss on sales and closures of North American stores.

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In the third quarter, the New York-based luxury fashion company reported adjusted earnings per share of $0.36, beating the estimate of $0.35, according to Bloomberg.

In the quarter, Coach posted sales of $929.3 million, below the estimate of $950.6 million.

The real ugly news came from the company's North America segment, where sales fell 24% to $493 million, from $648 million last year. Comparable store sales in the region fell 23%.

CEO Victor Luis said in the earnings statement: "We are pleased with our third quarter performance which was consistent with our plan and annual guidance despite the increased negative impact of foreign exchange on our top-line results. As was the case in our second quarter, we drove sequential improvement in our North America bricks and mortar business while further reducing our eOutlet events.

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The company said it incurred costs of $23 million under its "multi-year transformation plan" that includes renovations, and lease terminations related to store closures.

"During the last quarter, we also took significant action towards fleet optimization, closing a total of 43 retail stores and 12 outlet stores in North America, taking us to 56 and 13 closures, respectively for these channels year-to-date," Luis said.

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