Coach's stock has fallen as a result of increased competition from Kors, Kate Spade, and other luxury fashion brands and retailers. Its latest quarter displayed this increased competition, as Coach's revenue declined by 7% to $1.1 billion from $1.19 billion in 2013's third quarter. The decline in revenue affected the bottom line significantly, with net income falling 20% to $191 million and earnings per share falling 19% year over year to $0.68. Coach's CEO, Victor Luis, also noted that the company realized muted traffic in its stores in the recent quarter.
Some good news
The news was not all bad for Coach, as Luis also noted that the company grew sales in its men's division and increased sales in Asia and Europe. Sales in China alone grew more than 25% in the quarter. Moreover, international sales rose 14% to $441 million from $385 million in the year-ago quarter. Coach's financial results for the recent quarter were mostly a result of its declining business in North America, with North American sales falling 18% to $648 million from $792 million in 2013's third quarter.
Additionally, the sales declines over the first nine months of fiscal 2014, which include the recent third quarter, are not as extreme as 2014's third quarter alone. For the first three quarters in fiscal 2014, sales declined at a less drastic margin of 5% to $3.67 billion from $3.85 billion during the same period in 2013. The bottom line was also less affected, as net income declined 13% to $706 million from $813 million and EPS fell 12% to $2.51 versus $2.84 in the first nine months of 2013.