Coach warns its gross margin will be flat

Coach Inc. fell the most in more than two years after it said gross margin may not improve this year amid higher costs. Gross margin narrowed 1.5 percentage points to 71.8 percent in the fourth quarter because of pressures such as wage inflation in China, Coach said. Net income in the period ended July 2 rose 3.6 percent to $202.5 million, or 68 cents a share. The average estimate of 20 analysts was 65 cents.