Walking into a Coach (NYSE:COH) store or through certain sections of department stores leads me to one thought: "Man, leather smells good!" Coach emits quality and craftsmanship with every product it produces. In the "you get what you pay for" category, I'd rather spend a few more bucks for a Coach or Tiffany (NYSE:TIF) product (especially for a special occasion) than settle for Samsonite or Wilson Leather (NASDAQ:WLSN) goods.

I bought a Coach wallet five years ago, and it still looks fairly new. Admittedly, the wallet cost me more than I was thinking of spending, but it probably would have cost me more in the long run replacing an inferior product every year. Coach products are similar to the car-buying experience; if I want a car that looks good and will be durable, I will probably have to pay a premium.

Coach not only produces high quality products but also is a very well-run company; the company's fourth-quarter results bear witness to that observation. Coach's earnings of $0.34 per share exceeded the consensus estimate of $0.31 a share and widely beat last year's $0.16 per share number. The company is seeing strong sales growth in all of its channels and is seeing especially high demand in Japan. With sales up 39% for the quarter, the company also leveraged its strong cost controls to produce a staggering operating margin improvement (32.9% vs. 21.9% last year).

Although luxury item spending has been curtailed somewhat in the U.S. and Japan, Coach products give consumers an opportunity to buy quality, status-type items at reachable price points. The company not only produced great results for the fourth quarter, it also raised its guidance for 2005 to at least $1.68 per share (from $1.64) and predicted that sales will rise above $1.6 billion. Coach saw its July sales remain strong, which should be a positive indicator for fiscal 2005 first-quarter results.

Coach shares, which are trading at 24 times next year's earnings estimate of $1.68 per share, are attractive when compared with next year's growth rate that will probably approach 25%. With continued strong sales growth and margin improvement from the company, the shares should remain as appealing as its products.

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Fool contributor Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.