Ralph Lauren Corp (NYSE:RL) shares ended down 2.4% at $94.06 on Tuesday, after investors saw new planned cost-cutting also hurting sales at the luxury apparel brand.
Part of the shake-up will see the company reduce merchandise sold to department stores and close some of its own retail locations.
RL warned on Tuesday that sales in the current fiscal year would fall around 12% after slipping 3% to $7.41bn in the 12 months ended April 2.
However, the shares did recover from an intraday 9% decline to $86.25.
The restructuring is the first significant step by new Chief Executive Stefan Larsson to fix problems that have weighed on the company's financial results.
RL said on Tuesday it expects to incur a charge of up to $400mln for its restructuring efforts, and take a $150mln charge to liquidate excess inventory.
On the flipside, the moves are expected to result in $180mln to $220mln in annual savings. This is in addition to $125mln that the company previously said it would save from realigning its management around global brands rather than by regions.