If you were hoping for a clearer outlook on luxury goods, you won't necessarily find it in Coach's (NYSE:COH) first-quarter results.

The maker of high-class leather goods posted a 3.4% drop in first-quarter net income, to $140.8 million, although earnings per share came in flat at $0.44 per share. In one heartening piece of news, Coach actually did manage to increase its sales, but just a smidge; revenue ticked up 1.2% to $761 million.

The results beat analysts' expectations for earnings of $0.39 per share, but Coach's costs and margins remain troublesome. Coach's gross margin dropped to 72.2% from 74.2% as the company unleashed promotional pricing and shook up its merchandise mix.

Still, Coach CEO Lew Frankfort said the company's new Poppy line of handbags, which is priced for leaner times, has been well-received. Poppy helped Coach ring up more handbag sales and greater customer traffic than in the previous quarter. The new, less expensive line is just one part of Coach's efforts to adjust to a world of more frugal consumers.

Among other strengths, Coach has a venerated brand and a strong management team. That helps to insulate the company for the long term, even when investors periodically get cold feet. Better yet, Coach has a strong cash position of $994.7 million, just $25.1 million of debt, and a CEO who's proved his willingness to evolve along with changing market conditions.

At 18 times trailing earnings, Coach is not as cheap as the beaten-down lows it reached in March. But compared with other high-end stocks, its P/E ratio still makes the company look like a steal. Tiffany is trading at nearly 34 times earnings, while Nordstrom sports a weighty P/E of 24.

The luxury-goods market remains a highly uncertain place. Even if Coach seems relatively healthy and thriving, investors shouldn't automatically expect pricey rivals Tiffany (NYSE:TIF) and Saks (NYSE:SKS), or even less obvious higher-end picks such as Williams-Sonoma (NYSE:WSM) and Nordstrom (NYSE:JWN), to share the same good fortune.

What do you think of Coach as a stock idea? Let us know in the comment boxes below.

Coach is a Motley Fool Stock Advisor pick.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.