Frankfort's ability to beat estimates quarter after quarter through the recession and lackluster recovery was due in part to the fact that handbags are one of the luxuries women are still willing to buy. While consumers began spending less on jewelry this year, prompting New York-based Tiffany & Co. to cut its profit and sales forecasts in May, handbag sales marched on.

In recent years, women have switched their spending from clothes to handbags, which last longer, can be worn more often and don't have to fit. In 2011, Americans spent $8.5 billion on bags, according to Accessories magazine, an industry publication. Handbag sales have been growing about 10 percent a year, according to Coach. Compare that to the women's apparel market, which has been growing about 4 percent.

As a result, the fragmented fashion accessories category has attracted growth-hungry bag makers -- rivals Coach didn't need to worry about before.

Eoin Treacy's view The luxury goods market is not immune from slowing global economic growth and the commonality across the sector has been deteriorating for more than a year. (Also see Comment of the Day on July 11th).

Coach has been trending lower since its late March peak. It is now testing the October low and while somewhat oversold in the short-term, a clear upward dynamic will be required to begin question supply dominance.