Kate Spade & Co. is suffering short-term growing pains — and Wall Street isn’t happy about it.

The company saw its shares fall 18.2 percent Wednesday to close at $16.47 on the New York Stock Exchange after it sharply lowered guidance for the year and its second-quarter earnings missed Wall Street’s earnings per share estimates. The punishment didn’t stop at Kate Spade, either, with shares of Michael Kors Holdings Ltd. down 2.6 percent to $49.02 on the Big Board, while Vera Bradley slipped 0.8 percent to $13.74 in Nasdaq trading.

In contrast, Coach Inc. inched up 0.2 percent to $41.75, suggesting that some investors believe it might be taking market share from Kate Spade. In after-market trading, investor sentiment shifted slightly for Kate Spade and Coach: shares of Kate inched up 0.2 percent to $16.50, while shares of Coach slipped 0.6 percent to $41.52. Shares of Kors and Vera remained unchanged.

Despite the Street’s reaction, Kate Spade chief executive officer Craig Leavitt indicated the company remains focused on its long-term strategy to grow annual volume to $4 billion at retail.

Hurt by a confluence of macroeconomic factors, and a miss on its June novelty product offerings, the company on Wednesday posted second-quarter results that missed Wall Street’s EPS estimate by 3 cents and had the firm lowering 2016 guidance. Investors weren’t happy about the reduced guidance, and sent shares of Kate Spade down 18.2 percent to close at $16.47 in trading on the exchange.

The strategy entails a focus on the full-price customer, and data from the second quarter indicate the company is on the right track, he said. “Our focus is on the quality-of-sale effort, and we are winning with our full-price customer even [against the backdrop] of the challenging quarter,” Leavitt told WWD, adding that it was a “very important quarter” in measuring how well the initiatives have resonated with that consumer.

“We are agnostic about where she is shopping. When we tell our brand story in all key international markets, we want to capture her around the globe wherever she is shopping. We have a holistic view focused on engaging her with the brand and driving her desire to buy at full price,” the ceo said.

For the three months ended July 2, net income was up more than threefold to $26.8 million, or 21 cents a diluted share, from net income of $8.5 million, or 7 cents a year ago. On an adjusted basis, diluted EPS from continuing operations was 11 cents. Net sales rose 13.7 percent to $319.7 million from $281.1 million.

Wall Street’s consensus estimate was EPS of 14 cents on revenues of $318.6 million.

For the six months, the company swung back to the black, with net income at $38.4 million, or 30 cents a diluted share, against a net loss of $46.7 million, or 37 cents, a year ago. Net sales rose 10.8 percent to $594.1 million from $536.4 million.

By segment, net sales for Kate Spade North America rose 15.1 percent to $271 million, or 17.1 percent on an adjusted basis, which excludes sales for wind-down operations. Net sales for Kate Spade International were up 6.6 percent to $43 million, while the Adelington Design Group saw an increase of 4.8 percent in net sales to $5 million. By geography, North American sales rose 15.1 percent, while international sales rose 6.6 percent.

For 2016, the company expects diluted EPS in the range of 63 cents to 70 cents, on a net sales range of $1.37 billion to $1.4 billion. Prior guidance in May when the company posted first-quarter results forecast diluted EPS of 70 cents to 80 cents on revenue expectations of $1.39 billion to $1.41 billion.

One data point in the quarter that likely concerned investors was the direct-to-consumer comparable-sales growth. Wall Street was expecting a comps gain of 13 percent, but they rose by less than a quarter of that amount — 4 percent — and dropped to only 1 percent when e-commerce sales are excluded.

Leavitt said the quarter was hurt primarily by the “continuing headwinds of the foreign tourist, both in terms of traffic and average transaction spend.” In particular, the firm’s outlet stores are located in A-plus and A-rated centers, and those are “overindexed with foreign tourists,” making the brand reliant on the conducted tours the centers push to get traffic to the site, he said.

Further, he said while the brand is gaining in its efforts to get the full-price consumer to buy more, the challenge was the sale-oriented customer, who is driven to spend primarily by price. He said that in a heavily promoted environment, the competition was particularly “intense,” which made capturing “her dollars more challenging.”

The ceo also said the company didn’t expect its new Cameron Street handbag assortment to resonate as quickly with consumers, and therefore didn’t have enough in inventory to meet demand. The company is transitioning to this handbag group for the third and fourth quarters. Further, the brand’s splurge customer is responding positively to the $350-plus price point, and the company is growing its assortment in the higher average price points for the back half of the year.

In moving to increase the nimbleness of the organization, Kate Spade is using its stores as laboratory sites to test product, with select store clusters testing different products as needed. The firm is also shortening the turnaround time to bring new products to market as well as meet replenishment demand, and it is doing that by buying select raw materials in bulk to have on hand so — after learnings from tests and checking on consumer demand and feedback — it can put products into production and speed the process by “more than two-thirds faster than the normal cycle of development. That’s a significant reduction [in time],” Leavitt said.

Another issue in the quarter was that novelty assortments in June didn’t do as well as they did a year ago. “It’s a very important part of our brand, storytelling that is critical to our brand success. It drives traffic to our stores and to our site. We’ve had win after win after win in our novelty, but June was the first time our set of novelty products didn’t resonate as well with our customers. That impacted our business, particularly on our conversion rate on our e-commerce site,” Leavitt said.

Gabriella Santaniello, founder of independent research firm A-Line Partners, said she wasn’t surprised by the issue with the novelty assortment. “Novelty brings customers coming in to buy because they have to have it. Novelty can be such a whimsical statement. A handbag with a bunch of bananas is an identifiable handbag. There was skittishness from customers because they’re not necessarily going to commit dollars to that. But last year’s little coin purses with mouse ears and cat ears were really cute and did very well. To be able to comp [those sales] is very hard to repeat,” she said.

Leavitt said the July trends are better, with strong results so “we are confident with the product in our novelty delivery.” Now, to trend better in a difficult retail environment, Kate Spade aims to bring back some of the “tried-and-true themes” that did well in novelty, Leavitt said.

The company brings in new novelty items each month. A quick check on its web site shows that the cats are back, with 31 items ranging from feline images on handbags replete with whiskers and pink ears to cat-themed jewelry, charms, a cat pouf key chain and a variety of cat-imaged iPhone cases.