Coach shares dived 7 per cent pre-market New York trading after the preppy retailer posted its third consecutive decline in sales in North America.
Revenue dropped 5.6 per cent to $1.42 billion in the second quarter, while net income fell to $297 million, or $1.06 per share, from $352 million, or $1.23 a share, compared with a year earlier.
Analysts were expecting earnings per share of $1.11 on revenue of $1.48 billion.
The New York-based retailer known for its Poppy handbags has been losing ground to affordable luxury rivals Michael Kors and Kate Spade in North America in recent years, which accounts for 70 per cent of its revenue.
North American sales fell 9 per cent to $983 million in the quarter ended 28 December.
Chief executive Victor Luis said: "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."
Coach is set to present a new collection at New York Fashion Week next month.
Mr Luis added: "We view this as an important milestone in our brand transformation, driving fashion credibility and relevance."
Shares fell 7.6 per cent to $48.55 in premarket trading in New York.