Here's a riddle: What company grew both its top and bottom line by better than 30%, yet saw its stock price fall by 5%? If you answered Coach (NYSE:COH), you'd be right. And if you take this opportunity to invest in the company, you just might find yourself a little richer.

Coach's earnings jumped more than 35%, and revenue skyrocketed 30%. Same-store sales in North America were 20.2%, with an 11.6% rise at retail stores and a 31.2% surge at Coach's outlet stores.

With performance like that, what's the problem?

Some fretted over a slight 40-basis-point drop in gross margins, to 78.1%. This is still much higher than others in the space. Struggling Kenneth Cole's (NYSE:KCP) gross margins were 44.3% in its latest quarter. Liz Claiborne's (NYSE:LIZ) were 48.5%. Polo Ralph Lauren (NYSE: RL) doesn't report quarterly results until next week. However, its margins for its latest fiscal year were 57.6%.

This margin compression was largely expected (or should have been), since the company is selling more goods to its factory outlets. These are older goods that are sent from its stores to make room for newer items. The metric accounts for sales that would've been lost if it remained in its retail stores. Operating margins, benefiting from stronger sales, improved 330 basis points, to 37.6%.

These results demonstrate the demand for Coach's premium handbags and accessories. And to get even more out of its brand name, the company is launching three new products this fiscal year, including the re-launch of the successful Soho line.

Last month, I wondered whether Coach might be diluting its brand by offering items such as diaper bags for $398, and dog leashes and collars for $78 each. But these results show that its core business is strong. Management increased its guidance for this coming fiscal year; it now expects earnings to increase to at least $2.06, up about 22% from this year. The valuation has also become more favorable, at 28 times trailing earnings, from 30 last month. Although this is not a screaming bargain, sometimes you have to pay for quality. This may be an opportunity to grab the reins.

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Fool contributor Larry Rothman is happy to receive feedback, and promises to read it when not being wrestled by his three children. He doesn't have any positions in the companies mentioned. The Fool's disclosure policy is anything but spendy.