Despite a touch-and-go holiday season for some retailers, Coach's (NYSE:COH) earnings suggest that it's kept up its luxury appeal. Investors certainly liked the numbers, bidding up the stock's share price by nearly 10% in recent trading.

Coach's second-quarter earnings increased 37% to $174.2 million, or $0.45 per share. That trumped analysts' consensus estimate of $0.44 per share. Coach's sales also rose an impressive 22% to $650.3 million. The company's continued success in the Japanese market is especially notable; Coach considers Japan a potential source of future growth. The report also mentioned strong full-priced sales of the company's leather goods, and those sales' subsequent positive benefit on margins.

It's hard to argue with Coach's strategy these days. Analysts and the media keep coming up with possible pitfalls, from consumers tightening their budgets to the danger of cheaper Coach merchandise at outlets. Yet Coach just keeps on tempting buyers throughout the financial spectrum, usually flying in the face of current conventional wisdom. (For example, high-priced gas didn't seem to dampen enthusiasm for Coach's high-priced bags.)

Coach has plenty of competitors among upscale designer handbags -- Louis Vuitton, Burberry (LSE:BRBY.L), Fendi, and more -- but they don't seem to detract from its incredible momentum. It's possible that Coach may be mainstreaming its brand, which could one day be a mistake, but in the meantime, it's drawn a lot more women into its fold by convincing them that they, too, can afford the luxury.

It's also worth nothing that Coach pretty much nailed every target set forth in yesterday's Foolish forecast for the company. In fact, it went one better by increasing its earnings guidance for 2006 to $1.23 per share, excluding options expensing costs.

However, the stock's big gain today seems a little bit overly enthusiastic on investors' part. Coach shares were already as expensive as the company's pricey handbags. Although Coach's growth rate is definitely impressive, it seems that investors may likely find a better deal if they wait for this stock to go on sale.

For more on Coach, see the following Foolish content:

Alyce Lomax does not own shares of any of the companies mentioned.