Zacks Investment Research downgraded Coach, Inc. ( COH - Analyst Report ) to a Zacks Rank #5 (Strong Sell) on Jan 29, 2013.

Why the Downgrade?

Coach witnessed a sharp downward revision in estimates after posting lower-than-expected second-quarter fiscal 2013 results on Jan 23, 2013.

The quarterly earnings of $1.23 per share fell short of the Zacks Consensus Estimate of $1.29 but rose from $1.18 earned in the prior-year quarter.

Management cited that the challenging macroeconomic conditions and intense promotional strategies undertaken by competitors in the women’s handbag category muted the company’s performance in North America. However, international results remained a bright spot in the quarter.

Coach said that net sales for the quarter came in at $1,503.8 million, up 4% from the year-ago quarter but came below the Zacks Consensus Estimate of $1,605 million. We also remain concerned about erratic consumer behavior and soft economic recovery.

The Zacks Consensus Estimates for the third and fourth quarters of fiscal 2013 dropped 3.5% and 4.2%, to 83 cents and 92 cents per share, respectively, over the past 7 days. Moreover, for fiscal 2013 and 2014, the Zacks Consensus Estimates fell by 2.6% and 4.7% to $3.78 and $4.24 per share, respectively, over the same time frame.

Other Stocks to Consider

Not all textile, apparel store chains are performing as disappointingly as Coach. G-III Apparel Group, Ltd. ( GIII - Snapshot Report ) ) and Hanesbrands Inc. ( HBI - Analyst Report ) hold a Zacks Rank #1 (Strong Buy), and are expected to continue with their upbeat performances in the coming quarters. Another stock that should be merited is Gildan Activewear Inc. ( GIL - Snapshot Report ) , which holds a Zacks Rank #2 (Buy) and looks promising.