(Reuters) - Coach handbag maker Tapestry posted third-quarter revenue below Wall Street expectations on Thursday as demand for its handbags and accessories continued to falter in the face of high inflation.

Tapestry's net sales came in at $1.48 billion in the quarter ended March 30, compared to analysts' average estimate of $1.50 billion, according to LSEG data.

The company's proposed $8.5 billion buyout of Michael Kors owner Capri is facing hurdles as the U.S. Federal Trade Commission has sued to block it on grounds that the deal would eliminate "direct head-to-head competition" between the flagship brands of the two luxury handbag makers.

(Reporting by Savyata Mishra in Bengaluru; Editing by Arun Koyyur)