Execs with Coach (COH -7.1%) were on the hot seat during an earnings conference call after the retailer put in a dismal holiday season sales performance in North America.
They defended the power of the brand and the focus on factory stores, while still conceding rivals such as Michael Kors have taken market share.
The jump in the company's inventory was partially planned and not a direct result of the sales disappointment.
The view on 2014 EBIT margin is lowered to 26%-27% from 28%.
The company says it will have new designer products out later this year to re-ignite interest in the brand and will increase its retail footprint by close to 9%.