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Takeaway: Either they're being conservative (not) or there's a bigger problem at hand (likely).

Editor's note: This is an excerpt from Hedgeye Retail Analyst Brian McGough's morning research. To learn more about our range of subscriber services click here.

Tough Game Coach! $COH - coach

Coach has been one of our top shorts, and we knew numbers had to come down. But admittedly, we did not pinpoint this EPS print as the event.

There were so many callouts in this quarter we almost don't know where to begin. a) sales down 3%, b) inventories up 12%, c) gross margins down 300bp, d) EPS miss by 5%, e) take down margin guidance -- finally -- to 26-27%. It still needs to come down, e) take down sales guidance as well -- which is interesting in that it's logical to think that they need to pick either margin, or top line.

Tough Game Coach! $COH - bri1 

Either they're being conservative (not) or there's a bigger problem at hand (likely). The lack of leadership is still concerning. But not as concerning as its trajectory in the SIGMA chart above. 

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