New York City-based luxury accessories retailer Michael Kors has announced that it expects lower profits for the current financial quarter than originally expected, given a recent drop in same-store sales across North America.
The company's shares went down 9 percent in early trading following its unfavorable report.
Nonetheless, Michael Kors officials assure investors and customers that the decline in same-store sales can be attributed to shifting consumer shopping habits, with more luxury accessory shoppers moving to e-commerce.
"We believe ... they are migrating their purchases to our e-commerce site at a greater rate than we had initially anticipated," Michael Kors Chief Executive John Idol said on a call, Reuters reports.
But Michael Kors is not the only luxury accessory company that has made headlines for the industry's rocky business.
Coach experienced a 20 percent drop in North American sales to $785 million during the retailer's latest quarter, The Motley Fool reports, mentioning that same-store sales in the region dropped 22 percent during the same period.
Although the company has made several attempts to rebrand itself and usher in new leadership, such as the appointment of industry guru Andrea Guerra to the Board of Directors, several investors have expressed their skepticism to investing in Coach.
The luxury accessories retailer has reported better-than-expected results for the fiscal second quarter, but its stock is still down more than 18 percent over the past year, The Motley Fool also reports.
