This story has been updated from 8:15 am EST with analyst quote and updated stock price.

NEW YORK (TheStreet) - Coach (COH) shares were plummeting roughly 7% after the handbag and accessories maker missed analysts' expectations on both its top and bottom lines for the December-ended quarter.

Coach reported net income of $297.4 million for its second fiscal quarter, down 15.6% from the year-earlier period. Earnings per share of $1.06 missed analysts' estimates of $1.11 a share, according to Thomson Reuters.

Total net sales, which include domestic and international business, fell 5.6% to $1.42 billion. Analysts expected sales of $1.483 billion. On a constant currency basis, sales declined 3% for the quarter, Coach said.

Shares were down 7.2% to $48.78 at last check.

Coach CEO Victor Luis blamed disappointing holiday sales in the U.S. for the miss.

Comparable-store sales for its U.S. stores were down 13.6% for the quarter. Coach's total North American sales declined 9% to $983 million, with direct sales down 8% for the quarter.

"During the holiday quarter, total sales fell slightly in constant currency as weakness in our North American women's bag and accessories business offset strong growth in Men's, footwear, and robust results in emerging Asian markets and Europe. We continued to be disappointed by our performance in North America, which was impacted by substantially lower traffic in our stores and by our decision to limit access to our e-factory flash sales site," Luis said in a statement.

It doesn't help that Michael Kors (KORS) , Coach's biggest competitor, continues to win share in the U.S. Michael Kors is expected to report earnings on Feb. 4. Analysts, according to Yahoo! Finance, expect the company to report earnings of 86 cents a share for the December-ended quarter, up 34% from last year.

Coach's international sales fared somewhat better, buoyed by sales in China. Total international sales rose 2% to $425 million over last year. On a constant currency basis, international sales rose about 11%, the company said.

Sales in China jumped 25% and the business is on track to meet annual guidance of $530 million, it said. However, sales in Japan declined 2% on a constant-currency basis, while dollar sales were 21% below the prior year, reflecting the weaker yen.

"We have taken the initial steps in Coach's transformation across all aspects of the consumer experience - product, stores and marketing," Luis added. "Notable was the success of the Borough bag - a prelude to a comprehensive re-platforming of our women's product assortment across bags, accessories and lifestyle categories coming this fall. We also introduced a new, dual gender lifestyle store concept in two key locations, which will serve to inform our continuing evolution of global store environments. And, in marketing, we expanded our initiatives, leveraging key style influencers in our ongoing campaign."

Wells Fargo Securities analyst Paul Lejuez, who rates Coach "market perform," noted that it looks as if the luxury retailer is going to struggle for a long time, giving the market little hope. "During this period of management transition and targeted brand transformation, remarkably weak results during the all-important holiday season highlight how difficult it will be for COH to reinvent itself and gives the market little hope that it can occur in the foreseeable future, in our view," Lejuez wrote in a note.

-- Written by Laurie Kulikowski in New York.

Follow @LKulikowski

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