It’s been quite the day for the retail sector. Coach, Inc. (NYSE:$COH) shares were down 13.2% as of 1 p.m. EDT Tuesday. It all started after the New York City-based company disclosed mixed fiscal fourth quarter 2017 results, then followed with depressing full fiscal-year 2018 guidance.

For the fiscal fourth quarter Coach’s revenue dropped 1.7% year over year to $1.13 billion. In regards to the bottom line, adjusted net income increased to $142 million, or $0.50 per diluted share, which is up from $126 million, or $0.45 per diluted share in the 2016 period.

For comparison, analysts’ had forecast that Coach would report marginally lower adjusted earnings of $0.49 per share, but higher revenue around the $1.15 billion mark.

So What?

According to Victor Luis, the CEO of Coach, the fiscal fourth quarter was a “strong quarter” as the company drove mid-single digit comparable-store sales growth in North America and witnessed solid growth at its recently acquired brand Stuart Weitzman.

Additionally, Coach finalized its acquisition of Kate Spade back in July. This is significant as this move “will enhance our position in the attractive and growing $80 billion global premium handbag and accessories, footwear, and outerwear market.”

What Does the Future Hold?

For fiscal 2018, Coach forecasts that revenue will increase roughly 30% year over year, to a range of $5.8 billion to $5.9 billion. This figure is based on the assumption that there will be low-single-digit organic growth and more than $1.2 billion in sales from Kate Spade. If this were to happen, full year adjusted earnings per share should be within the range of $2.35 to $2.40.

However, the Street was expecting the luxury fashion company to report higher guidance. For instance, Wall Street was expecting Coach to guide for adjusted earnings of $2.49 per share on revenue of $6.04 billion.

All things considered, if you’re looking for retail stocks to buy, you might benefit from leaving this one out of your investment portfolio.

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