Coach Gets Fired

"While we're well positioned for the holiday season, we are, however, concerned with recent traffic trends in our North American retail stores, reflecting the retail environment and the unusually difficult comparisons with last year," said Chairman and CEO Lew Frankfort. "Thus, we believe it's prudent to be more conservative in our comparable-store sales guidance for the balance of the fiscal year."

Coach sees holiday-quarter earnings of 68 cents a share and sales of $970 million -- below analysts' targets for EPS of 70 cents and sales of $984 million.

For the full fiscal year, Coach reiterated its forecast of earnings of $2.06 a share and sales of $3.17 billion. Wall Street anticipated earnings of $2.08 a share and sales of $3.19 billion.

Coach has been a fast-growing company that has benefited from a strong consumer appetite for upscale goods. While its bags and accessories appeal to high-end shoppers, Coach also has price points that make it attainable for less wealthy consumers seeking a luxury product.

But like most retailers, Coach has been plagued by worries that economic headwinds will slow down consumer spending and cut demand from middle-income shoppers. Even before Tuesday's stock drop, the company's shares had fallen 23% since hitting a 52-week high of $54 in April.

Coach's tepid outlook for the holiday season brought down shares of another luxury company -- Tiffany(TIF). The jeweler, like Coach, appeals to a luxury market while but also brings in middle-income buyers seeking "aspirational" products.

Shares of Tiffany recently were down $3.44, or 6.2%, to $52.35.

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