Coach on Tuesday again reported soft sales at its North American stores as it continued to face tough competition for handbag shoppers, and the leather goods maker announced the departures of two more executives.
Shares of New York-based Coach, which is known for its Poppy handbags fell. (Click here to track the company's shares.)
Overall revenue rose 5.8 percent to $1.22 billion in the fourth quarter ended June 29, helped by gains it its men's merchandise and in China.
Coach's decline stemmed from weak sales in its bread-and-butter business—women's handbags. This was the second drop in North American comparable sales in the last three quarters.
"They have lost some market share, no question about it, especially among young, fashion-conscious shoppers," Edward Jones analyst Brian Yarbrough told Reuters.
As Coach attempts to transition into a global lifestyle brand, Ike Boruchow, an analyst at Sterne Agee, said Coach's market share remains the biggest concern for investors as smaller competitors attempt to grab customers from the retailer. This transformation could be a 12 to 24-month process, he added.
"So that's really where the concerns are especially when you look at Coach's industry-leading margins," he said. "People are wondering, as competition heats up, what happens to those margins and if they have to come down over time."
Mike Tucci, the head of Coach's North America business is stepping down, as is Jerry Stritzke, its operations chief. Analysts had expected this, given that the two had been believed to be candidates to succeed longtime CEO Lew Frankfurt.
Victor Luis, who oversaw Coach's international expansion, takes the reins from Frankfurt in January.