Coach (COH) announced June quarter (the fiscal fourth quarter for the company) results Tuesday. Earnings of 86 cents a share were a penny above expectations, and grew by 27% from a year earlier. Revenue climbed 12% to $1.16 billion, short of the Wall Street consensus of $1.2 billion.

And the stock closed down 19%, falling to $49.33 from $60.58.

Unless this market has gone completely insane -- a possibility that I always consider these days -- there was something besides those headline numbers that investors really, really didn't like.

And the stinking fish in Coach's results? North American same-store sales, which increased by just 1.7% from the fiscal fourth quarter of 2011. That was a huge miss -- the company had guided Wall Street to expect 7% growth in the quarter. And Wall Street, skeptical for once, had estimated 6%. A year earlier, North American same-store sales grew by 10%.

Which, of course, has led to news stories and analyst snap reports asking if Coach has lost its cachet, or, even worse, if this portends the end of the company's strategy of growing by selling more in the expanding luxury markets of Asia.

I don't see any evidence that the problem this quarter was with that part of the company's strategy. Direct-to-consumer sales in China climbed by 60% in the quarter year to year. In Japan, direct-to-consumer sales grew by 16% in constant currency, or 18% in U.S. dollars. The company has, in fact, made important progress during fiscal 2012 in its strategy of growing Asian sales by buying out its retail partners in Singapore and Taiwan.

What I see instead is a really big mess in the North American factory outlet segment. That segment was responsible for essentially all of the North American miss.

The difficulty is in figuring out why that happened.

Possibility No. 1: The economy in North America has gotten so much weaker that consumers have stopped buying Coach products at the company's factory stores (although they remain willing to buy them at higher prices in its other retail outlets.)

Possibility No. 2: The company badly managed its factory store sales promotions in the quarter.

At this point, I'd say the evidence points to possibility No. 2.

First, the company eliminated in-store in favor of direct mail and e-mail promotions. The in-store coupons had offered 30% off while the email campaigns offered either 20% off or made a "best price" offer. My belief is that the company made this move because they thought the economy in general and their market in particular was strong enough to let them cut back --slightly -- on discounts. (And because Coach, like every other smart company in the world, wants to develop an Internet-based targeted marketing strategy.) Then, noticing that sales were weaker in the factory store segment than expected, the company went back to in-store couponing and higher discounts before the end of the quarter.

Confusion like that -- cut the discount, expand the discount, make it hard to find the best discount -- is never good for sales.

And I think much of the problem that Coach suffered this quarter was a result of this marketing mistake. That mistake is, of course, readily fixable.

Does that mean you should jump in with both feet and buy Coach shares now?

I’d advise waiting -- well, maybe take a nibble or two since the stock is now trading within shouting distance of last August's low at $45 -- but certainly don’t buy whatever a full position might be for your portfolio quite yet.

I think there are three reasons for caution.

First, even if my logic above is absolutely correct, the market isn't going to buy into it until the company's results put the "Coach has lost its edge" story to rest.

Second, the U.S. economy may indeed be weakening more than I think it is -- in which case Coach will take pain over North American same store sales again next quarter. And even if the economy isn't in worse shape than I expect, enough investors fear that it is to keep downward pressure on stocks during cycles of fear.

And, third, the company has said that fiscal 2013 -- the year that started in July -- is going to be a year of investment. Most of that will be in growing the business in Asia, where Coach has gained complete control of its retail operations in Taiwan, Singapore, Korea, and Malaysia and will now be looking to build out those franchises. That will cost money that will reduce earnings per share. That’s not a plus for 2013 -- but it is the right strategy for the long term. This isn’t, however, a market that rewards the long term.