Despite a 23% rise in first-quarter net income, Coach recently warned of a possible decline in North American holiday traffic.

The luxury leather goods and handbag retailer reported a net income of 41 cents a share, up from 34 cents a share a year earlier, beating analysts' earnings estimates of 40 cents a share. Sales also increased, jumping 28% to $677 million, topping the Street predictions of $659 million.

Be that as it may, Coach hasn't risen above the recent plagues of the retail sector. Like prominent retailers including Wal-Mart and J.C. Penny , the company recently issued profit warnings and a slower-than-usual holiday season. Coach predicts second-quarter earnings of 68 cents a share, coming in below analysts' expectations of 70 cents a share, and guesses fiscal-year earnings to top off at $2.06 a share, compared to the company's former estimate of at least $2.06 a share.

Shareholders today responded accordingly, as the stock dropped more than 13% during intraday trading. After falling below its 10-day and 20-day moving averages on October 8, Coach hasn't been able to recover. Shares are currently trading at $36.58, down 11.79%.