Tapestry Inc blamed falling tourist spending and a slowing global economy for a cut in its forecast for full-year adjusted profit on Thursday, as it reported disappointing holiday numbers and a fall in sales at Kate Spade handbags.

Shares of the New York-based fashion house fell 12 percent to $34.53 in early trading after it said full-year adjusted earnings would now be in a range of $2.55-$2.60 per share, down from previous guidance of $2.75-$2.80 per share.

Sales at Coach, whose handbags and accessories contribute about 71 percent of the company’s business, rose about 2 percent in the quarter to $1.25 billion. However, sales at Kate Spade, which it bought in 2017, fell 1.6 percent to $428 million.

Excluding items, the company reported a profit of $1.07 per share in the second quarter ended December 29, missing analysts’ estimates of $1.11 per share.

“In light of our second quarter results and the uncertain global environment, we are updating our outlook for the balance of the fiscal year,” Tapestry Chief Executive Officer Victor Luis said.

The company said net income rose to $254.8 million, or 88 cents per share, from $63.2 million, or 22 cents per share, a year earlier.

Net sales rose from $1.79 billion to $1.80 billion, but missed the average analyst estimate of $1.86 billion, according to IBES data from Refinitiv.

TOURISTS CRIMP SPENDING

New York-based Tapestry called out “uncertain” macroeconomy and geopolitical tensions for a drop in tourism, especially with Chinese tourists, whose thirst for Coach and Kate Spade handbags had been a reliable revenue driver for the company.

Chinese customers are instead buying Tapestry products at their local stores in China.

The company said on a conference call that it would continue to invest in the world’s most populous country at a time when the Chinese government is pushing for higher domestic spending.